ADB-Financed Western Regional Roads Development Project Phase II

ENVIRONMENTAL IMPACT ASSESSMENT REPORT

August 2010

The environmental impact assessment is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the "Terms of Use" section of this website.

CURRENCY EQUIVALENTS (as of June 2010)

Currency Unit = Mongolian Tugrug (Tg) 100 Tg = $0.072 $100 = 137,500 Tg

The exchange rate of the Tg is determined under a floating exchange rate system. In this report, the rate used is the rate prevailing at the above date.

ABBREVIATIONS

ADB — Asian Development Bank ADT — average daily traffic AMa — absolute maximum AMi — absolute minimum EIA — environmental impact assessment GOM — Government of Mongolia GRM — Grievance Redress Mechanism KUNNP — Khar-Us Nuur National Park MESC — Ministry of Education, Science, and Culture MLEIA — Mongolian Law on Environmental Impact Assessment MLEP — Mongolian Law on Environmental Protection MNET — Ministry of Nature, Environment and Tourism MOF — Ministry of Finance MRTUCD — Ministry of Road, Transport, Construction and Urban Development NAMHEM — National Agency of Meteorology Hydrology and Environmental Monitoring Agency NGO — Non-Governmental Organization NM — National Monuments NP — National Parks NR — Natural Reserves NSO — National Statistical Office PCC — Public Complaints Center PIU — Project Implementation Unit PRC — People’s Republic of China SE — supervising engineer

WEIGHTS AND MEASURES

о С — degrees of celsius cm — centimeter ha — hectare km — kilometer Km/h — kilometer per hour m — meter mg/m3 — Milligrams per cubic meter

NOTES

(i) The fiscal year of the Government and its agencies ends on 31 December. (ii) In this report, "$" refers to US dollars.

TABLE OF CONTENTS 1 EXECUTIVE SUMMARY 1 1.1 Introduction 1 1.2 Critical Facts 1 1.3 Significant Findings 11 1.4 Recommendations 20 2. INTRODUCTION 23 2.1 Background 23 2.2 EIA Preparation 24 2.3 Associated Project Components 25 2.4 Report Structure 26 3. POLICY LEGAL AND ADMINISTRATIVE FRAMEWORK 28 3.1 Environmental Policy 28 3.2 Environmental Law 30 3.3 Environmental Impact Assessment Requirements 33 3.4 Administrative Framework 36 4. DESCRIPTION OF THE PROJECT 41 4.1 Type of Project 41 4.2 Description of the Proposed Actions 41 4.3 Bill of Quantities (BOQ) for the Project 44 4.4 Need for the Project 45 4.5 Environmental Category of ADB 45 4.6 Project Location 46 4.7 Associated Project Components 48 4.8 Associated Facilities 49 4.9 Traffic Projections 51 4.10 Implementation Schedule 51 5. DESCRIPTION OF THE ENVIRONMENT 53 5.1 Environment of Mongolia 53 5.2 Assessment Process 53 5.3 Definition of the Project Area 53 5.4 Physical Resources 54 5.5 Ecological Resources 70 5.6 Economic Development 81 5.7 Social and Cultural Resources 85 6. ALTERNATIVES 101 6.1 Alternative Analysis 101 6.2 No-action alternative 101 6.3 Location Alternatives 101 6.4 Technological Alternatives 106 7 ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES 108 7.1 Screening of Potential Impacts 108 7.2 Anticipated Environmental Impacts 109 7.3 Topography and Soils 110 7.4 Permafrost Degradation 113 7.5 Natural Disasters 115

7.6 Climate and Air Quality 116 7.7 Surface and Groundwater Hydrology 118 7.8 Noise and Vibration 119 7.9 Solid Waste 120 7.10 Flora 121 7.11 Fauna 121 7.12 Protected Natural Area 124 7.13 Relocation 124 7.14 Non-transport Infrastructure 125 7.15 Transport Infrastructure 125 7.16 Historical and Cultural Heritage 126 7.17 Health Issues 126 7.18 Construction Camp Impacts and Management 126 7.19 Associated Section 127 7.20 Cumulative and Induced Impacts 128 7.21 Possible Change in Alignment 128 8. ECONOMIC ASSESSMENT 130 8.1 Environmental Protection Investments 130 8.2 Environmental Costs 131 8.3 Environmental Benefits 131 9 PUBLIC CONSULTATION AND INFORMATION DISCLOSURE 133 9.1 Stakeholder Workshops 133 9.2 First Round 133 9.3 Consultations with Government Officers and Experts 134 9.4 Other Public Consultations 136 9.5 Consultations within the Project Area 136 10 GRIEVANCE REDRESS MECHANISM 138 10.1 Introduction 138 10.2 Current Practice 138 10.3 Proposed Grievance Redress System 139 10.4 Responsibilities of PCC 140 11. ENVIRONMENTAL MANAGEMENT PLAN 142 11.1 Environmental Safeguards 142 11.2 Mitigation Measures 142 11.3 Implementation 147 11.4 Implementation Schedule 148 11.5 Environmental Cost Estimate 149 11.6 Institutional Arrangements 149 11.7 Capacity Building 151 11.8 Environmental Monitoring 151

12 CONCLUSION 153

Appendix I: Environmental Management Plan Appendix II A: Climate Variables Appendix II B: Water Quality Appendix II C: List of Flora and Fauna Appendix II D: Historical and Cultural Heritage Appendix II E: Project Alignment Maps

1 EXECUTIVE SUMMARY

1.1 Introduction

1. Purpose of the project. The Government of Mongolia, acting through its Ministry of Road, Transport, Construction and Urban Development (MRTCUD), has undertaken the upgrading of the Western Regional Road Corridor with various funding arrangements and the 147.9 km road section from Khovd to Buraatyn Davaa is an integral part of the said road corridor. The development of the road section from Khovd to Buraatyn Davaa (herein after referred to as the Project) has been identified for financial assistance from the Asian Development Bank (ADB).

2. Scope of work. The scope of work for the preparation of the EIA was as follows: collection of information related to the environmental conditions along the proposed road section, assessment of potential location specific environmental impacts, development of preventive/mitigation measures for significant impacts, evaluation of alternative alignment proposed and alternative technologies, economic assessment of environmental benefits and costs, preparing Environmental Management and Monitoring Plans (EMP, Appendix I), and limited public consultations.

1.2 Critical Facts

1.2.1 Legal and Administrative Framework

a. Legal Framework

3. Mongolia’s environment legal framework is similar to international practices and is structured as shown in Table 1 below.

Table 1: Key Environmental Legislation in Mongolia Name of the Law Year Adopted The Constitution of Mongolia 1992 Law on Environmental Protection 1995, revised in 2006 and 2008 Law of Land Jun 2002 Law on Land Cadastre and Mapping Dec 1999 Law on Land Fees Apr 1997 Law on Land Possession Jun 2002 Law on implementation of regulations related to Land Possession Law Jun 2002 Law on Geodesy and Cartography Oct 1997 Law on Special Protected Areas Nov 1994 Law on Buffer Zones Oct 1997 Law on Water Apr 2004 Law on Water and Mineral Water Resource Fee May 1995 Law on Forests Mar 1995 Law on Fees for Timber and Fuel wood Harvesting May 1995 Law on Prevention of Steppe and Forest Fires May 1996 Law on Reinvestment of Natural Resource Use Fees for Conservation Jan 2000 Law on Natural Plants Apr 1995 Law on Natural Plant Use Fees May 1995 Law on Protection of Plants Mar 1996 Law on Hunting 2000, 2003 Law on Fauna 2000 Law on regulation of export and import of endangered species of flora and Nov 2002 fauna Law on Hunting Reserve Use Payments and on Hunting and Trapping May 1995 Authorization Fees Law on Underground Resources Dec 1994 Law on Minerals 1997, revised in 2006 Petroleum Law 1991 2

Name of the Law Year Adopted Law on Air Mar 1995 Law on Hydrometeorology Nov 1997 Law on Protection from Toxic Chemicals Apr 1995 Law on Environmental Impact Assessment 1998, revised in 2002 Law on Tourism 1998 Law on Solid Waste Nov 2003 Law on prohibiting export and transportation of Hazardous Waste Nov 2000 Source: UNDP. 2008. Institutional Structures for Environmental Management in Mongolia. Ulaanbaatar.

b. EIA Requirements

4. The Project will be subject to the environmental requirements of both Mongolia and those of the ADB. These requirements are as follows.

5. EIA requirements of ADB. Projects are screened for their expected environmental impacts and assigned to one of the following four categories: (i) Category A: projects with potential for significant adverse environmental impacts—an environmental impact assessment (EIA) is required to address significant impacts, (ii) Category B: projects judged to have some adverse environmental impacts, but of lesser degree and/or significance than those for category A projects - an initial environmental examination (IEE) is required to determine whether or not significant environmental impacts warranting an EIA are likely, (iii) Category C: projects unlikely to have adverse environmental impacts—no EIA or IEE is required, although environmental implications are still reviewed, and (iv) Category FI: projects are classified as category FI if they involve a credit line through a financial intermediary or an equity investment in a financial intermediary—the financial intermediary must apply an environmental management system, unless all subprojects will result in insignificant impacts.

6. EIA Requirements of Mongolia. The EIA requirements of Mongolia are regulated by the Law on Environmental Impact Assessment. The type and size of the planned activity determine whether the responsibility lies with either the Ministry of Nature and Environment (MNE) or aimag government. There are two types of EIAs defined in the Law: General EIA and Detailed EIA.

7. Figure 1 provides a simplified diagram of the EIA procedure in Mongolia. 3

Figure 1: EIA Procedure in Mongolia

MNET or Local Government Prior to implementation, project appoints EIA expert to conduct a Implementer submits the project General EIA. The expert has 12 description, the technical and working days. General EIA may lead economic feasibility study, the work to 1 of 3 (possibly 4) conclusions: drawings and other related documents to MNET or local t

Rejection of the project The project may be The project may be A detailed on the ground of non- implemented without implemented pursuant environmental impact conformity with the conducting a detailed to specific conditions assessment is required relevant legislation, or environmental impact adverse impact of the assessment equipment and technology on the

Authorized company conducts Project implementer selects Detailed EIA according to authorized company to conduct schedule and scope determined Detailed EIA and negotiates by General EIA. costs

Detailed EIA report is submitted MNET issues decision whether to the expert who conducted the or not to implement the project General EIA for review. The based on the expert’s conclusion expert has 18 days to develop a conclusion and submit to the MNET for a decision.

8. To initiate a General EIA, the project implementer submits a brief description of the project to MNE, including the feasibility study, technical details, and drawings. The General EIA will 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 General EIA is free and usually takes up to 12 days.

9. The scope of the detailed EIA is defined by the General EIA. The detailed EIA must contain the following chapters: (i) environmental baseline data; (ii) project alternatives; (iii) recommendations for minimizing, mitigation and elimination of impacts; (iv) analysis of extent and distribution of adverse impacts and their consequences; (v) risk assessment, (vi) environmental protection plan; (vii) environmental monitoring program; and (viii) opinions of residents on whether the project should be implemented.

c. Administrative framework

10. Institutional Framework of the Ministry of Nature, Environment and Tourism. The Ministry of Nature, Environment and Tourism (MNET) is the agency primarily responsible for the implementation of environmental policy in Mongolia. The organization of the MNET is given below;

11. MNET operates through the following departments and agencies:

 Department of Sustainable Development and Strategic Planning; 4

 Department of State Administration and Management;  Department of Environment and Natural Resources;  Department of Specially Protected Areas Administration and Management;  Department of Tourism;  International Cooperation Division;  Division of Information, Monitoring and Assessment;  Finance and Investments Division;  Ecologically Clean Technologies and Science Division;  National Agency for Meteorology, Hydrology and Environmental Monitoring;  Water Authority; and  Forest Authority.

12. Aimag and soum governors are responsible for environmental management in their jurisdiction, with the exception of protected areas management. Aimag level inspectors report to the State Professional Inspectors Agency.

1.2.2 Description of the Project

13. Type of project. The proposed Project is a road upgrading and paving project. The Project activities will not include significant realignments or development of long sections of new alignments in previously undisturbed areas.

14. Description of the proposed actions. The entire road section between Khovd and Buraatyn Davaa will be developed as a 2-lane road. The following types of road improvement options have been proposed:

 New construction: road upgrading on the existing alignment;  Pavement and shoulders: asphalt concrete overlay with an asphalt concrete regulating course, providing selected fills and granular material in shoulders;  Blasting works (where required) in limited areas;  Road safety: road markings, road signs, and guide posts;  Six bridges and 32 box culverts have been identified for development

15. Total earthwork quantities for the Project are shown in Table 2, below.

Table 2: Estimated Quantities for the Project Item Total Quantity, m3 Material for Subbase and base 999,924 Rock fill for Embankment 5,100 Excavation spoil 202,769 Borrow material for embankment 4338,854 ROW material for Embankment 340,767 Source: DOR. 2009. Detailed Design. Ulaanbaatar.

16. Need for the project. The major goal of the Project is to contribute to the economic development and regional trade and cooperation in the Western Region of Mongolia by providing continuity to the Western Regional Road. 5

17. Environmental category of the project. The larger Western Regional Road Development Project of which the present Project is a component, has been classified by ADB environmental category A.

18. Project location. The proposed road is within the Western part of Mongolia between Khovd and Buraatyn Davaa (Figure 2).

Figure 2: Project Location

Source: TA Consultant’s Report. TA 7449-MON Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

19. Implementation schedule. The proposed implementation schedule developed by the Consultant1 is presented below in Table 3.

1 Consultant TA No. 7449-MON: Regional Transport Development Project Component-1 Preparing the Western Regional Road II Project.

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Table 3: Project Implementation Schedule

Source: TA Consultant’s Report. TA 7449-MON Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

1.2.3 Description of the Environment

20. Definition of the project area. The project area is entirely located within Altai Sayan Eco-Region that is included in World Wide Fund for Nature’s (WWF) “Global 200” list of virgin or little changed eco-regions in the world, where more than 90 % of the planet’s biodiversity is concentrated. The proposed road connects two aimags (provinces) – Khovd and Bayan-Olgii with a combined population of approximately 187,000 (2005). The soums within the Project Area include:

 Khovd Aimag: Erdeneburen, Khovd, Buyant  Bayan-Olgii Aimag: Tolbo, a. Physical Resources

21. Topography. The project alignment will primarily follow existing roads that pass through mountain areas, hills, canyons, valleys, and plains with elevations ranging from 1,400 m to 2,600 m above sea level.

22. Geology. The project area is situated in the Mongol Altai high mountainous area. According to the geo-morphological map of Mongolia, the terrain primarily includes excessive rolling ranges, medium rolling ranges and mountains, slight rolling ranges of sloped structure, mountainous ravines, semi-level surfaces of mountain skirts, glacial valleys, mountains with sharp ridged peaks, alluvial lake valleys, delluvial - prolluvial and mountain river valleys.2

23. Soils and permafrost. Soil characteristics vary substantially within the project area. High mountain steppe-raw humic soils are widespread for the high altitude sections between Khovd and Buraatyn Davaa. Spots of high mountain tundra occur largely between Khovd and Olgii. Govi brown soil dominates near Khovd. Both perennially and seasonally frozen soils occur in the Project area. Continuous permafrost persists between Khovd and Buraat Passes. Seasonally frozen soils occur near Khovd and Olgii.

2 Government of Mongolia. 2007. EIA. Ulaanbaatar. 7

24. Seismic characteristics. The project area resides in the Mongol Altai and Gobi Altai seismically active zones where earthquakes with the magnitude of about 8 were registered in the past (1931 and 1957).

25. Natural disasters. Flashfloods (mudflows) and drifting snow are distinctive features of the project area. Flashfloods are widespread in near Khashaat and Buraat Passes. Drifting snow is characteristic of Buraat Pass.

26. Climate and air quality. The annual amplitude of air temperature varies between 66 and 82 oC, depending on geographical location and natural zones. The monthly absolute maximum and minimum air temperatures observed at meteorological stations along the road show that July is the warmest month and January or February is the coldest month. During the last ten years, the absolute maximum air temperature reached 39 oC at Bulgan soum in Khovd Aimag in 2004 and the absolute minimum air temperature was -44 oC at Manhan soum in 2005.

27. Some 85.0–94.5% of annual precipitation falls between May and September. During the cold season snowstorms can occur, causing the road to be closed. The stable snow cover formation date varies from the middle of November to the beginning of December, with snow cover completely clearing up in March. The dominant wind direction is from the west and northwest, with maximum wind speed varying from 18 to 28 m/s. Air quality is good and does not exceed maximum allowable concentrations except local dust pollution caused by vehicles.

28. Hydrology and water resources. Water resources in the project area are represented by surface water (rivers, springs and lakes) and groundwater. The largest rivers include Khovd and Buyant. Spring floods in the rivers of the project Area generally begin in the middle of April, with peak flow occurring in late June and continuing for 110–150 days. The spring flood flow is 60–90% of total annual flow of Altai Mountain Rivers. The groundwater resource distribution is uneven. Moving from north to south, groundwater resources become more sporadic and mineralization increases. The water quality of all of the rivers and lakes of the project area was assessed as “very clean” and “clean”.

b. Ecological Resources

29. Flora. Dominant flora in the project area is associated with specific conditions of the area. The vegetation zones in the project area are High Mountain, Mountain Steppe, Dry Steppe, Desert Steppe, Stepped Desert, Grasses-Undershrub Desert, Undershruub and Shrub Desert and Hamad. The list of plants that are found in each of the zones are given in Appendix II. Rare plant species growing in Khovd and Bayan-Olgii aimags include Juniper, Sabina Juniper, Pseudosabina, Forked Stitchwort, Least Water Lily, Pink Peony, March Saxifrage, Roseroot, Mongolian Milk-Vetch, Mongolian Caryoperis, Saussurea involucrate, Wild onion, Tulipa uniflora, Shining water lily, Gueldenstaedtia monophylla, Prickly Milk-Vetch, Fragile-leaved Milk-Vetch, Red goyo, Halodendron salt tree, Tsengel’s Hedysarum, Squamarina pamirica, Ferula ferulacoides

30. Fauna. The Mongolian Altai region is characterized by its rich fauna diversity. There are 360 species of vertebrates, including 90 species of mammals, more than 250 species of birds, 11 species of reptiles, 123 species of insects, 10 species of fishes, and 1 species of amphibian. Some of the rare and endangered mammals that occur in Bayan-Olgii and Khovd aimags are Asiatic Wild Dog, Snow Leopard, and Saiga. Some migrant birds that are rare and endangered and commonly seen in these areas are Damatian Pelican, Great White Egret, White Tailed Eagle and Swan Goose. Detailed lists of the rare and endangered mammals and birds are 8

presented in Appendix II.

31. Special protected areas (SPA). The Mongolian Law on Special Protected Areas (1994) distinguishes four types of specially protected areas: Strictly Protected, National Conservation Parks, Nature Reserves, and Monuments. The location of SPAs in the Project Area is as follows:

 Tsambagarav National Park—The road passes about 11 km from the south side of the park.  IBA Tolbo—Tolbo Lake is located in an associated road section, about 20 km north from the ending point of project road section.

32. National parks. Tsambagarav National Park was established in 2000 to protect the natural environment of the area that has historical, cultural, scientific, educational and ecological importance, and to develop tourism. The total area of the park is 111,500 hectares. The park is inhabited with rare and endangered species of flora such as roseroot, wild onion, and fauna such as wild mountain sheep, ibex, snow leopard, and Altai snowcock.

33. Important bird areas (IBAs). The Tolbo Lake IBA, though not within the project area is located very close to the associate project component of Buraatyn Davaa to Olgii road section. The birds reported from this IBA ara, Bar-headed Goose (Anser indicus), Whooper Swan (Cygnus cygnus), Ruddy Shelduck (Tadorna ferruginea), Great Cormorant (Phalacrocorax carbo), Pallas's Fish-eagle (Haliaeetus leucoryphus), Northern Lapwing (Vanellus vanellus); and Khar Us - Swan Goose (Anser cygnoides), Greylag Goose (Anser anser), Bar-headed Goose (Anser indicus), Whooper Swan (Cygnus cygnus), Ruddy Shelduck (Tadorna ferruginea), Common Shelduck (Tadorna tadorna), Gadwall (Anas strepera), Eurasian Wigeon (Anas penelope) and many others.

c. Economic Development

34. Gross domestic product (GDP) of Khovd Aimag amounted to 44,033.6 million Tugrug (476,500 Tugrug per capita) in 2005. The most important sectors were agriculture, hunting and forestry (76.0%), transport and communication (5.1%), and education (5.1%). The GDP of Bayan-Olgii Aimag amounted to 36,000 million Tugrug (375,000 Tugrug per capita) in 2005. The most important sectors were agriculture, hunting and forestry (71.7%), education (6.5%), financial intermediation (5.8%), and trade (4.5%).

35. Agriculture. Animal breeding is the main economic sector in both Khovd and Bayan- Olgii aimags. The contribution of the sector amounts to 76.0% of aimag GDP (33.4 billion Tugrug) in Khovd Aimag, and 68.3% of GDP (24.6 billion Tugrug) in Bayan-Olgii Aimag. The number of livestock in both aimags is constantly increasing. Crop production is of less importance in the agricultural sector of both aimags; in this case Khovd produces vastly more crops than Bayan-Olgii.

36. Mining. Mining activity in Western Mongolia is associated with a number of mines operating and other sites that are being planned for coal, gold, and silver extraction.

37. Water supply systems. The water supply system in Khovd provides centralized drinking water distribution to office buildings and urban residential area. Daily water supply is 4,600 m3 water from 9 groundwater wells. Traditional dwellings (ger) in Khovd are supplied with water from 8 water distribution stations, 4 deep well and 3 hand water pumps. The water consumption is 388,300 m3 water per day. Some 2,133 wells are used for water supply in rural areas. Surface 9

water is the main source of water for livestock.

38. Electric distribution systems. Khovd aimag is largely served with electricity from Russia, because energy capacity at the local level is limited. A 110 kV transmission line links Russia and Olgii town of Bayan-Olgii Aimag and Miyangad soum of Khovd Aimag. Altantsugts, Sagsai, Tsengel, Ulaankhus and Buyant soums of Bayan-Olgii Aimag, as well as Khovd town, Duut and Erdeneburen soums of Khovd Aimag are connected to this line with a 35 kV transmission line.

39. Land use. Agriculture has been the dominant land use across both aimags, occupying more than 77 percent of the total land in each aimag. The land used for “transportation and network” occupies 0.2 percent, and 0.31 percent of the total territory in Bayan-Olgii and Khovd aimags respectively. The proposed road would follow the existing earthen tracks, thereby slightly reducing the land use for “transportation and network.”

Table 4: Land Area by Classification Bayan-Olgii Aimag Khovd Aimag Area Percent of total Area Percent of total Land classification (,000 ha) (%) (,000 ha) (%) Agricultural lands 3,520,000 77.1 5,885,0 77 Cities, villages and other 15,405 0.34 28,405 0.3 settlements Transportation and 14,059 0.31 21,128 0.2 network land Forest resource land 22,568 0.49 464,851 6.1 Water resource land 46700 1.02 43,117 0.5 State special use land 947,844 20.74 1,163642 15.2 Total area 4,566,576 100 7,606,038 100 Source: 2005. Land management report of Khovd and Bayan-Olgii Aimags Ulaanbaatar.

40. Tourism. Ecotourism dominates in the region. There are 19 tourist camp sites, visited by a total of 8,247 international and domestic tourists in Khovd Aimag in 2006. A recreational center, spa-resort, and children’s camp are attractions for several hundred tourists per year along with biological resources.

41. Health services. Khovd Aimag: Some 14 medical clinics, 2 intersoum medical clinics, and 6 hospitals for families provide basic service to local residents and herders. A hospital in Khovd city plays a major role as a regional hospital to serve patients from the western region. In total, there are 569 hospital beds. Additionally, there are 16 private hospitals and 6 pharmacies. Some 128 physicians, 11 pharmacists, 235 nurses, and 115 medical assistants work in medical services of the aimag. On the whole, there are 14 physicians, 12 medical assistants, 38 mid- level medical personnel, and 61 beds per 10,000 persons. Bayan-Olgii Aimag: There are 30 medical clinics with 561 beds. Some 141 physicians, 5 pharmacists, and 392 mid-level medical personnel work in medical services of the aimag.

42. Noise and vibration. The road corridor runs largely through a remote area with almost no settlements and there are no sensitive receptors. It will traverse Olgii town, however no sensitive receptors were noted near the corresponding alignment. Tolbo Lake IBA, however may be affected by high noise levels during construction.

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d. Social and Cultural Resources

43. Social resources. The population of Bayan-Olgii Aimag is 95,758 and the aimag center 28,248; the population of Khovd Aimag is 91,687, and the aimag center 32,351. Bayan-Olgii Aimag population density is 2.09 per km2 while in Khovd, it is 1.09. Mongols dominate the population in Khovd (82 percent), while Kazakh are the majority of the population (about 90 percent) in Bayan-Olgii aimag.

44. Historical and cultural heritage. Human settlement can be traced back in the project Area as early as the Paleolithic and Neolithic eras as evidenced by the following sites: Petroglyphs in Tsambagarav and near Khovd Town, “San” Wall, as well as Deer Stones and Khirigsuurs (stone-mound).

1.2.4 Alternatives

45. No-action alternative. Failure to develop the project road section (No Action Alternative) would result in continued impediments to travel and transport of people, goods and a substantial constraint to future improvements in the economy of local communities. Using multi-track earth roads will continue to affect pasture lands and habitats, flora and deteriorate air quality with dust. Accordingly, it has been determined that the “No Action Alternative” is not a reasonable option.

46. Location alternatives. Potential location alternatives have included: detour of Khovd town, and detour of lake area. The environmental assessment of the alternatives is as follows:

 Detour of Khovd town. Three locational alternatives as well as the design alignment were considered for the Khovd area. Subsequent to analysis of the alternatives, the design alternative appears as the option with the least environmental, economic and engineering cost.  Detour of Olon-Nuuruud Lake area. The design alternative passes through interspersed lakes in the area 95 km to 100 km from Olgii along the alignment. This area’s alternatives were considered because the Governor and Local Government Officials of Olgii Aimag stated that the design alignment would have an adverse impact on the lakes, which were said to be habitats for endemic fish species. In public consultations at Hongor Ulun bagh (located in close proximity to the lakes) the community and the Governor of the bagh were in agreement that the design alignment should be changed, as it would affect the lakes adversely.

47. Technical alternatives. Given the projected traffic flow, sub-grade strength, and extreme climate conditions, two road surfacing alternatives are possible: double bituminous surface treatment (DBST) or asphalt concrete (AC).

48. AC pavement has the advantage of strength and durability, with a longer design life of about 20 years with appropriate routine and periodic maintenance. DBST pavement is less strong and durable and its application generally has a design life of up to 15 years with appropriate maintenance. DBST pavement is vulnerable to the progressive loss of cover aggregate and the deepening and expansion of potholes. Accordingly, the maintenance costs for DBST is higher than AC pavement. The decision on pavement selection will be made considering costs (capital and recurrent) and in consultation with a cold climate pavement specialist. 11

1.3 Significant Findings

1.3.1 Anticipated Environmental Impacts

a. Physical Environment

49. Topographic characteristics and soils. Impacts: Impacts of the Project on land will be positive due to reduced land degradation by diversion of traffic from earth tracks to a hard surface road. Provided erosion prevention measures in the construction and operational phases are taken, no substantial adverse impacts to soils are foreseen. No contamination of soil is foreseen during construction. Significant environmental impacts to soils are not anticipated during the operation of the road.

50. Mitigation No mitigation actions related to potential loss of agricultural soil and contamination of soil are warranted.

51. Impact Degradation of ice-rich permafrost due to natural causes (global warming) or anthropogenic activities (road construction) can trigger a process called thermokarst. Activities such as construction of roads and removal/disturbance of vegetation cover in permafrost areas can severely affect the topography leading to subsidence and disruption of engineering structures and modification of drainage patterns.

52. Mitigation. Contracts will contain provisions to avoid adverse impacts due to altered road embankments, borrow pits and provisions for quarry operations. Adequate anti-erosion measures such as minimizing the area of soil clearance, selection of less erodible material and good compaction, placement of gabions and riprap will be taken, as described below in Table 5. A preventive approach will be followed to avoid permafrost degradation where possible. It implies detour of areas with poor cryogenic and hydrogeological conditions and engineering design measures.

Table 5: Erosion Control Procedures Potential Erosion Problem Mitigation Measures Use of spoil and borrow pits All available spoil will be used for structural fill for access roads, stations, and embankments before before borrow pits are excavated. Locating borrow pits Borrow pits will be centrally located to serve more than one site. Location of spoil and borrow pits Spoil and borrow pits will be sited far from industrial, agricultural, residential, historic, and ecological sites. Topsoil from borrow pits Topsoil from borrow pits will be removed and set aside. When the Project is completed, the areas will be regarded, the topsoil replaced, and the area reseeded. Intercepting ditches will be constructed on the high side of the restored pit to minimize erosion. Spoil disposal Spoil will be spread on the lowest yielding, least productive land available. Soil disposal When soil is spread on slopes for permanent disposal, it will be buttressed at the toe by a retaining wall. The surface of the slope will be stabilized with shotcrete, riprap, or laid rubble, as necessary, prior to seeding. Steep cuts All steep cuts will be flattened and benched. Natural Watercourses Watercourses will not be locked, and temporary soil and rock stockpiles will be designed so that runoff will not induce sedimentation Source: MRTCUD. 2007. Project Preparatory Technical Assistance Report. Manila.

53. Climate and air quality. Impacts: Potential moderate, temporary air quality impacts during the construction stage of the Project can be anticipated due to fugitive dust generation. Minor increases in the level of nitrogen oxides (NOx) and sulphur oxides (SOx) from construction 12

plant and machinery are expected. No significant environmental impacts on air quality are anticipated during operation of the road. Moreover, the improved road would reduce dust emissions caused by driving on the earth tracks. No significant air quality impacts warranting mitigating actions in the operational phase are anticipated.

54. Mitigation: Contracts will contain provisions to avoid adverse impacts on air quality. Trucks carrying earth, sand or stone will be covered with tarps to avoid spilling, operators will be required to install emission controls. Routine air quality monitoring will also be required in areas of high potential impact (asphalt plants, construction camps) during the life of the Project.

55. Surface and groundwater hydrology. Impacts: No impacts on water quality or the availability of water for domestic or agricultural use are anticipated. As groundwater in the project area is relatively deep (> 5 m), no impacts on groundwater resources are anticipated in either the construction or operation phases. No wells are located in the area of potential impact. There will be no net loss of water access points. However, fuel and chemical substances used for road construction could contaminate groundwater and surface water if they are not properly stored and disposed.

56. Mitigation: The Contractor will develop and implement contingency plans for control of oil and other dangerous substance spills (Spill Management Plan). Fuel storage, maintenance shop and vehicle cleaning areas will be stationed at least 300 m away from the nearest water body. Stormwater drainage and retention basins will be constructed and a silt trap (where a river/stream is nearby) will be installed prior to commencement of construction to control runoff water and sediment and prevent entry of contaminants into a water body. Oil and grease are likely to be discharged in the construction vehicle parking area, vehicle repair area, and workshops. All wastewater will be directed into an oil interceptor prior to discharge. Mitigation measures for minimizing construction impact will be considered for implementation during road maintenance, especially during major road maintenance.

57. Noise. Impacts: Noise is not a significant problem along the route, since it intersects only 1 main town (Olgii) or fixed settlement along its entire 748.4 km length. However, there will be some increases in the noise level during the construction phase. Mitigation: Noise impacts during the construction phase will be mitigated through the use of source controls, site controls, and time and activity constraints.

b. Biological Resources

58. Flora. Impacts: No threatened or endangered flora species are located within the right- of-way (ROW). No adverse impacts to such species are likely to occur due to construction activities. Plant species present within the ROW are native species, which are highly tolerant of grazing, compaction, and other physical disturbances. Moreover, construction of the paved road will have moderate positive impact on flora by excluding the use of multiple earth tracks that affect flora.

59. Fauna. Impacts: Impacts were assessed in regard to the following issues:

 Habitat Loss and Wildlife Migration Patterns. No significant habitat loss is anticipated; moreover, habitat gain is anticipated as a result of construction of an asphalt road instead of multiple earthen tracks running in parallel throughout the width of the alignment. Potential wildlife crossing zones were identified by experts of the Specially Protected Area 13

Administration Department in Bayan-Olgii, WCS and WWF Mongolia Programme Office as shown in Figure 3 below. Discussions with experts of the Specially Protected Area Administration Department in Ulaanbaatar and Bayan-Olgii, WCS and WWF, and observations during field trips provide evidence that the magnitude of adverse impacts to wildlife patterns will likely be insignificant because:  The road corridor under development is an existing one that has been used for many years. Although the traffic volume is presently low, the existing alignment is multiple earthen tracks with widths up to 500 m which causes disturbance to a larger area than the paved road will;  The projected volume of traffic is quite low: less than 700 vehicles per day by year 2013 and a bit more than 2000 by year 2022. Such traffic intensity will have only minor effects on fauna and migration patterns.  Construction activity will be short-term and mitigation measures will be implemented, there will not be any substantial negative impacts.  Poaching. Poaching presents a threat to wildlife in the project area along with natural factors, such as unfavorable weather conditions (severe winters and drought summers). The WWF representative in Mongolia noted that the network of poachers and illegal wildlife traders in the project area has since been terminated. The activity of this network was weakened by a new WWF project aimed at conservation of the Saiga Antelope. Currently WWF supports 8 rangers equipped with radio- communication responsible for Saiga conservation. The rangers work in close contact with two anti-poaching brigades also supported by WWF, whose duties include control of poaching. Nevertheless, high demand (the assessment is between 6,000 and 10,000 kg of horn per year) and ever-increasing prices for Saiga horn in China, high poverty in regions where Saiga occur, and limited resources in combating poaching and smuggling, when combined with enhanced road accessibility to Saiga populations create potential for adverse impacts. The Customs officials at the Mongolian/Chinese and Mongolian/Russian border reported no illegal trade cases over many years.  Aquatic Fauna. No substantial impacts on aquatic fauna are anticipated.

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Figure 3: Migration Patterns of Wildlife in the Project Area

Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

60. Fauna. Site specific impacts:

 Tsambagarav National Park. The park is located at a distance of 11 km from the road corridor. The road will have no direct impacts on the national park. However, the road can potentially cross wildlife migratory routes, among these are Khashaatyn Davaa and Buraatyn Davaa passes. Nevertheless, no significant impacts to fauna are anticipated during construction and operation phases provided planned mitigation measures are taken.  Tolbo Lake. Tolbo Lake is located in an associated road section, about 20 km north from the ending point of project road section. It is an Important Bird Area of international significance. There is a gravel road near the lake. The government is planning to pave the section to connect to the project road. The pavement construction can affect bird populations that inhabit the south-east part of the lake, especially during the breeding period. Impacts during the road construction phase of this associated project component, while short-term, will potentially pose a higher risk of physical disturbance and poaching, due to high concentration of construction equipment and machinery, and also workers. Conversely, it is anticipated that long-term impacts during road operation will not be significant because of low traffic volume.

61. Fauna. Mitigation: Mitigation measures are as follows:

 Habitat Fragmentation and Wildlife Migration Patterns. A number of prevention and mitigation strategies have been considered to reduce habitat fragmentation and avoid wildlife migration patterns.  Overpasses, underpasses and at-grade crossings were assessed as expensive or potentially ineffective structures for the Project, at least in the initial stage of operation. The projected volume of traffic will be low 15

enough not to recommend these measures. For example, Recommendations on Environment Protection Measures for Highways and Bridges of the Russian Federation (1995) suggests installation of wildlife fencing and corridors in cases where traffic volume exceeds 2,000 vehicles per day, a traffic volume that will be reached on the project road after 2020. However, sufficient information about wildlife corridor locations and behavior of animals is currently not available. Therefore, the proposed structure of mitigation measures will include:  Using warning signs and wildlife reflectors in the initial stage of the project operation phase;  Capacity building of the Administrations of Specially Protected Areas in Khovd and Bayan-Olgii aimags. They will be responsible for collection of additional information on wildlife migration routes and behavior of animals to provide recommendations on feasible mitigation measures when the traffic increases in close cooperation with WWF and WCS; and  As traffic volumes increase, the database should be sufficient to provide a framework to assess whether additional mitigation measures (e.g., overpasses, underpasses, at-grade crossings) are warranted.  Anti-Poaching. Local environmental protection authorities and international organizations are making a major effort to control poaching in the project area. However, their capacity is still limited. Improved accessibility as a result of road construction will require additional measures to be taken. The mitigation measures will include two major options:  Strengthening anti-poaching units. This task is currently addressed by WWF with assistance of other NGO’s.  Preventing illegal trade. The capacity of Customs at the Russian/Mongolian border and especially the Mongolian/China border should be strengthened to not allow poachers and illegal traders to smuggle Saiga horns, skins of rare animals, and similar articles.  Protected Natural Areas. Impacts: Tsambagarav National Park although 11 km away from the road the park may be indirectly affected by the proposed Project. Similarly Tolbo Lake IBA may be affected as the alignment of an associated project passes within 400 m of the lake. Mitigation. There will be no direct impacts to Tsambagarav National Park. The magnitude of impacts during the operational phase has been assessed to be negligible due to the low intensity of traffic. Construction impacts will be short-term and will be mitigated as discussed above. Indirect impacts as effect on wildlife migratory routes can be mitigated by above stated mitigation. In the Tolbo Lake area, the road alignment of the Associated Project Component is located between 400 m–1 km from the shoreline. The center of the IBA is located in northeast portion of the lake; therefore direct impacts on birds such as noise and physical disturbance are possible during construction and operational phases. The magnitude of impacts during the operational phase has been assessed to be negligible due to the low intensity of traffic. Construction impacts will be short-term and will be mitigated by construction scheduling to avoid 16

sensitive period for the bird breeding. Poaching and illegal fishing are other impacts that should be taken into consideration. c. Socio-Economic impacts

62. Relocation. No permanent structures including houses have been reported from the ROW or close to the ROW. Stone structures that can be disassembled and rebuilt could be located close to the ROW in the interim period between this report and construction. However, the impermanent nature of these structures facilitate these being relocated further back from the alignment without any significant impact.

63. Non-transport infrastructure. Potential impacts to non-transport infrastructure include:

 Water Supply Systems. The Project will have no direct impact on area water supply systems.  Sewerage Systems. The Project will have no direct impact on sewerage systems.  Energy Systems. The Project will have no direct impact on area energy systems. The coordination with local authorities will be required where construction works can affect power lines close to town areas.  Waste Disposal. Potential waste disposal impacts could occur due to the improper disposal of construction waste, waste oil and solvents, and human waste from construction camps.

64. Mitigation. Mitigation related to potential non-transport infrastructure has been assessed as follows:

 Water Supply Systems. Civil works contract documents will contain provisions requiring pre-construction monitoring of existing water quality to provide a baseline for the measurement of impacts during the construction period. Routine water quality monitoring will also be required in areas of high potential impact (river crossing sites, construction camps, and other areas with potential to contaminate runoff) during the life of the Project.  Sewerage Systems. None required other than coordination with local officials.  Energy Systems. None required other than coordination with concerned officials.  Waste Disposal. Civil works contract documents will include enforceable provisions for the proper disposal of waste.

65. Site-specific considerations. No site-specific measures with regard to infrastructure beyond those recommended for incorporation in the Project and detailed above are required.

66. Potential impacts on transport infrastructure. There will be some impact on road transport during the construction period due to detours and traffic inconveniences. After construction, the primary transport impact of the Project will be improving the performance of the transport sector and greatly facilitating the flow of traffic, goods, and travelers. 17

67. Mitigation. Contracts will specify that careful attention must be taken during the construction period to ensure that traffic disruptions are minimized. No mitigation actions related to transport, other than those actions already incorporated in the Project, are required.

68. Potential impacts on historical and cultural heritage. Some impacts on archaeological and cultural heritage locations could be encountered during the construction period, especially if new sites are encountered during construction.

69. Mitigation. The Contractors will prepare a Cultural Heritage Management Plan to manage any sites that may be encountered during construction. If a historical, cultural, or archaeological relic is encountered, all construction activities will halt and the established action plan will be implemented (notification of soum/district governor, Institute of Archaeology, and local police). Work will recommence only after appropriate measures have been taken as requested by the appropriate authorities and confirmation is received that work may resume.

70. Health impacts. Human health risks associated with the Project during construction or operation phases can include:

 Facilitation of the transmission of diseases. During construction, there will be an increased risk of work crews spreading socially transmitted diseases such as HIV/AIDS. Improvement of the road section and the resultant increase in traffic densities would supply improved conduits for the transmission of such diseases.  Contamination of local water supplies. Potential impacts to local water supplies include the possibility of contamination by the water supply and wastewater disposal systems associated with the labour camps during the construction period. Contract provisions to ensure that these facilities are properly sited should be incorporated in all civil works bidding documents.  Air quality decline. No significant impacts on air quality and consequently public health are anticipated from the Project. The construction of the paved road will contribute to decreasing dust concentrations in ambient air.  Noise Pollution. No significant impacts on sensitive receptors with health consequences are anticipated.  Safety. Improved road will result in increased traffic speeds. Engineering efforts has been undertaken to reduce the likelihood of accidents and users will be educated about the risks of high speed. Traffic laws will be enforced.

71. Construction camp impacts and management. Potential effects of construction camps are competition for local sources of water, sewerage facilities, energy systems; solid and liquid waste generation, poaching and illegal trade, spilling of lubricants, hazardous materials. Before the construction activities will commence, the Contractor will prepare and submit a Construction Camp Management Plan that will propose preventive/mitigation measures for environmental impacts of the construction camp, construction yard including fuel storage, filling station and vehicle washing sites.

72. Cumulative impacts. Cumulative and induced impacts identified are associated with the development of the mining industry and tourism. Synergetic impacts of global warming and anthropogenic effects to permafrost areas such (road construction activities) can pose risks of accelerated permafrost thawing and development of thermokarst processes. 18

1.3.2 Economic Assessment

a. Benefits

73. Environmental benefits associated with the rroject area related mostly with regaining pastureland, decreasing the occurrence of erosion processes, reducing dust and noise, decreasing the number of vehicle breakdowns, decreasing pollution of rivers due to avoidance of direct crossings of watercourses, and reducing vehicle fuel use and emissions.

74. Pastureland regained. Table 6 provides an assessment of the amount of pasture land regained as a result of the elimination of earth tracks. The assessment is prepared for multi track areas of the road section.

Table 6: Assessment of Land Regained with Elimination of Multitrack

LENGTH OF ESTIMATED AVERAGE WIDTH LAND ESTIMATE OF SECTION MULTI-TRACK AVERAGE NUMBER OF ALL TRACKS REGAINED TOTAL LAND (KM) OF TRACKS (M) (HA/KM) REGAINED, (HA)

KHOVD - 90 20 100 10 900 OLGII

Note: With the assumption that the width of track is 5 m. Source: Government of Mongolia. 2007. Feasibility Study EIA. Ulaanbaatar.

75. Reduction in erosion. As mentioned above, the presence of earthen multi-track leads to erosion of pastureland and thermal erosion processes especially in areas with rolling topography or permafrost. Olonuur (an area of many lakes between Khovd and Olgii) is one of the identified areas where the elimination of multi track can stop triggering erosion processes3.

76. Dust and noise reduction. A great quantity of dust in is generated by vehicles traveling on the earth roads. Although, it is difficult to quantify the amount of dust generated by existing traffic, it is anticipated that the paved road will significantly contribute to the reduction of dust generation. It is anticipated also that there will also be some decrease in noise pollution per individual vehicle due to improvement of physical characteristics of road surface and road geometry.

77. Vehicle breakdowns. It is anticipated that the number of vehicle breakdowns occurring along the project road will decrease as a result of improved road conditions. A smoother road will reduce vehicle operating costs and the availability of rest areas will avoid accidents due to fatigue.

78. Vehicle emission and fuel consumption reduction. Decrease in vehicle emissions and fuel consumption per vehicle are expected as a result of improving the physical characteristics of road surface and road geometry. Travel times between locations will decrease, thereby lowering the overall amount of vehicle emissions and fuel consumed.

b. Environmental Costs

79. The environmental costs of the Project have been estimated as US$ 296,100. The costs include mitigation measures, monitoring, collection of detailed information and capacity

3 Government of Mongolia. 2007. EIA. Ulaanbaatar. 19

building. The cost benefit comparison is summarized below in Table 7.

Table 7: Environmental Cost-Benefit Analysis No. Environmental factors Impact, mitigation measures and investment Benefits 1 Ambient air and acoustic Noise and air pollution decrease along the road section +1 environment 2 Water quality Negative impact on water quality during construction but positive impact +1 during operation 3 Population Health No significant adverse effects and convenient travel conditions providing +1 better access. 4 The people's living standards Providing job opportunities and improving the local people's living +1 standards 5 Plants and animals Negative impacts of Poaching and safety risks at wild life crossings -2 6 Nature Reserve Area No significant adverse effects 0 7 Historical/Cultural and Scenic No significant adverse effects but convenient travel conditions contributing +1 sites to improved tourism 8 Urban planning No significant adverse effects but conditions contributing to the +1 development of cities and towns, and society 9 Beautifying of landscaping No significant adverse effects; increasing investment in environmental 0 protection and improving the environmental quality along the highway. 10 Land value Convenient traffic conditions are conducive to drive the value increment of +1 the real estate, commercial and industrial land along the highway. 12 Direct social benefits Mileage shortening, travel time saving, transportation cost reduction, fuel +1 consumption reduction, safety improvement, etc 13 Indirect social benefits Improving the investment environment, promoting the economic +1 development and enhancing environmental awareness. 14 Environmental protection Increasing the investment in the project and reducing adverse effects. 0 measures Positive benefits:(+9)；negative benefits:(-2)； Total positive benefit / negative benefit =4.5 Notes: Score 1 and 2 points respectively based on the impact significance. “+”represents positive benefits and “-” represents negative benefits. Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

1.3.3 Public Consultation and Disclosure

80. Two rounds of public consultations have been held for the entire road corridor of the Western Regional Roads Project during the preparation of the EIA in 2007.4 These consultations were conducted for the full 748.4 km length Western Regional Road corridor. They were held mainly in Khovd and Oligii and included people from the project affected area of the present project from Khovd to Buraatyn Davaa. Further consultations are planned after detailed design, before commencement of construction.

81. During the preparation of this EIA the consultants conducted public consultations and discussions with the PIU and local government authorities. Public meetings were conducted in Khovd and Olgii aimags while officials from both aimags, and soums and baghs in Olgii were also consulted.

82. During the discussion with aimag Government Department representatives the representatives were of the view that apart from contributing to social and economic development, other development would follow the road development and therefore rehabilitating the road would be very significant. They also expected the developed road to play an important role not only in domestic but also foreign relations and cooperation in regard to exports as well as tourism.

4 Government of Mongolia. 2007. EIA. Ulaanbaatar. 20

83. The community in Hongor Ulun Bagh and the Governors of Hongor Ulun bagh, and Tolbo soum were consulted along with State Environmental Inspector of Tolbo soum (20 June 2010) in regard to alternative alignments in the lake area. The community members and the officials were provided with details of the alignment traversing the lake area. All community members who participated in the meeting were in agreement/understanding that there was a preference for changing the alignment in the lake area and were of the opinion that the design alignment could negatively affect the lakes.

1.4 Recommendations

1.4.1 Environmental Management Plan

84. The main objective in formulating the Environmental Management Plan (EMP) is to recommend a set of environmental safeguard measures to address the adverse environmental and social impacts of the project. In addition to establishing mitigation measures and implementation responsibility, the EMP will also include monitoring mechanisms to ensure compliance with EMP requirements and environmental regulations of the country. The detailed EMP is included in Appendix I.

85. Institutional arrangements. Key players involved in environmental management of the project are as follows:

 The Ministry of Roads, Transportation, Construction and Urban Development (MRTCUD) will be the Executing Agency for the Project and through its Department of Roads (DOR) ensure that environment management is implemented as required and report to the Steering Committee and ADB;  The Steering Committee will include representatives of different Ministries and Agencies such as Ministry of Finance, Ministry of Health, MNET, and MRTCUD. The Chairperson of the Steering Committee is the State Secretary of MRTCUD;  The Project Implementation Unit (PIU) will reside within the DOR with on-site offices. The PIU through the supervising engineer (SE) will be responsible for overall contract administration and day-to-day project supervision including environmental management of the Project.  The Supervising Engineer will perform the following duties: o supervise site environmental management system of the contractors, and provide corrective instructions; o review the EMP implementation by the contractors; o report EMP implementation status to the PIU/DOR on environmental inspection and monitoring results;  The Contractor. In the technical specification for the civil works contract, activities to protect environment will be described. During construction, contractors will strictly implement the Contractor’s EMP and undertake self-check activities and fully cooperate with the external environmental inspectors.

86. Figure 4 presents the implementing and reporting structure.

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Figure 4: Organizational Chart for Implementing the EMP

87. Capacity building. It was found that the capacity of PIU to undertake responsibilities for carrying environmental management and monitoring is limited. There is little experience in the implementation and management of EMPs and skilled technical staffs are not available at either the national or aimag levels. Thus, it will be necessary to embody a program of institutional strengthening and training through the provision of technical assistance and procurement of laboratory equipment and supplies. This will be considered in combination with a proposal on a new organizational structure.

88. Environmental monitoring. The monitoring framework for the Project is summarized in Appendix I. Monitoring activities include site supervision, verification of permits, monitoring environmental impacts such as noise, air and water pollution as well as wildlife migration routes.

89. Civil works contracts include that instrumental monitoring of air quality, water quality and noise levels should be carried out prior to commencement of construction to establish a baseline against which impacts can be measured. The locations for baseline monitoring may be determined in consultation with SE and MNET and local government environmental inspectors. Contingency provisions should be included for additional air and water quality, as well as noise monitoring at the request of the SE/MNET if warranted by events.

1.4.2 Grievance Redress Mechanism

90. A Grievance Redress Mechanism (GRM) has been proposed for the Project to increase the efficiency of resolving problems which could arise due to construction activities. The GRM will be developed as follows:

91. In consultation with the MRTCUD (EA) the PIU of the DOR (IA) will, together with the local government body/bodies in the project area, establish a Public Complaints Center (PCC) in each site office. The local government bodies at the bagh, soum and aimag level will nominate an officer to act as a focal point.

92. When a problem due to project activities occurs the AP will make a complaint to the PCC. In case the AP is unable to direct the complaint to the PCC, AP will lodge the complaint at the bagh, soum or aimag administration office where the nominated officer will accept and immediately direct the complaint to the PCC. At the PCC a complaints register/database will be maintained. 22

93. Upon receipt of the complaint the PCC will coordinate with the Supervising Engineer and the Contractor to resolve the problem. The supervising engineer will have the required authority to instruct the contractor on action that should be taken for redress. The PCC will update the complaints database with action taken and provide feedback to the complainant.

94. Any complaint that cannot be solved at the PCC/Supervising Engineer/Contractor level will be directed to the MRTCUD for action at the ministry level. Complaints thus directed and their outcome also will be recorded in the database. PIU director will monitor the Public Complaints register and prepare a monthly report to the Director of the DOR.

1.4.3 Conclusion

95. The Project will have some negative and positive, direct and indirect environmental impacts on physical, ecological and socio-economic environment during the road construction and operation phases. However, as the project road section is not located in an environmentally sensitive area, no serious negative environmental impacts are anticipated. Most of the alignment traverse on or along existing tracks and it is on these tracks that the road construction will be carried out. Further, the adverse impacts during construction are temporary and could be minimized by proper planning, good construction practices and implementation of the proposed mitigation measures and monitoring programs. Thus, these impacts are not expected to pose any threat to the environment.

96. Considering the nature of the adverse and beneficial effects and their significance on the environment it can be safely determined that the development of the road section from Khovd to Buraatyn Davaa is environmentally viable.

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2. INTRODUCTION

2.1 Background

97. Mongolia’s landlocked location between the People’s Republic of China (PRC) and the Russian Federation and its remoteness from developed international and domestic markets are major constraints to international development. The Government of Mongolia has identified increasing investment in road construction and rehabilitation as a means to reduce Mongolia’s isolation from the world market and improve the accessibility of isolated communities within the country. This emphasis on road rehabilitation and construction has been included as one of the main issues to be addressed in the Economic Growth Support and Poverty Reduction Strategy.1 The improvement of the Western Regional Road Corridor will be a large step forward in reducing geographical isolation within the region.

98. The improvement of the Western Regional Road Corridor will assist the Government to meet the objectives identified within its Comprehensive National Development Strategy for Mongolia that is based on Millennium Development Goals. Among these objectives are: (i) expanding and developing the auto road network and connecting aimag and regional centers and the capital city by paved roads; (ii) improving the care and maintenance of the national and local roads; and (iii) reducing the negative impacts of automobiles on the surrounding environment, population, and traffic movements.2 These goals and strategies are also in line with the transportation sector strategy for Mongolia developed with the assistance of the ADB.3

99. The Government of Mongolia, with the objective of improving its internal transport network and increasing trade and transit links between Mongolia and its neighboring countries, the PRC and the Russian Federation, has undertaken the upgrading of the Western Regional Road Corridor through its Ministry of Road, Transport Construction and Urban Development (MRTCUD). The project road is located in the two westernmost aimags of Mongolia (Khovd and Bayan-Olgii), which have a population of approximately 190,000. The poverty incidence in this region was 51 percent in 2003, higher than the national average of 36 percent. The 784.4 km project road connecting Yarant at the Mongolia/China border and Ulaanbaishint at the Mongolia/PRC border (Figure 1) is strategically important for the socioeconomic and regional development of Mongolia, as well as improving relationships with neighboring countries.

100. The outcome of the proposed project will be an efficient and safe regional transport route that is developed in the Western Region of Mongolia, linking Xinjiang Autonomous Region in the PRC and the Siberia region of the Russian Federation by way of Khovd and Bayan-Olgii aimags of Mongolia. The Project road represents a portion of Asian Highway 4 (AH4), an internationally designated road by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP).

101. The MRTCUD will be the Executing Agency and responsible for overall implementation of the Project while the Department of Roads (DOR) through the Project Implementation Unit (PIU) will be the Implementing Agency for the Project. The project proponent is also MRTCUD.

1 Government of Mongolia.2004. Economic Growth Support Poverty Reduction Strategy. Ulaanbaatar. 2 Government of Mongolia. 2007. Millennium Development Goals (MDGs)-based Comprehensive National Development Strategy of Mongolia. (Draft) Ulaanbaatar. 3 ADB 2007. National Transport Strategy for Mongolia. Manila.

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102. The total road length of 784.4 km has been divided into 9 sections for financing arrangements, as shown in Figure 2. The section under consideration for ADB funding and examined in this environmental assessment consists 147.9 km from Khovd to Buraatyn Davaa. Other sections are to be funded by the Mongolian Government, Peoples Republic of China and ADB/ Government of Mongolia co financing.

Figure 5: Location Map

Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

2.2 EIA Preparation

103. This Environmental Impact Assessment (EIA) has been prepared for the proposed road section of 147.9 km from Khovd to Buraatyn Davaa. The EIA describes the baseline environmental conditions, including physical, ecological and socio-economic resources along the road, assesses the environmental impacts of the intended road development, and provides 25 remedial/mitigation measures. The EIA has been prepared in accordance with ADB’s Safeguard Policy Statement (2009) and Guidelines for EIA, as well as Mongolian environmental impact assessment legislation.

2.3 Associated Project Components

104. The total 784.4 km length of the road corridor alignment has been divided to 9 sections and these are at different stages of development as presented in Figure 6. All these sections together with the ADB proposed project consists the Western Regional Road Development Project and were considered in the Environmental Impact Assessment (EIA: 2007) prepared in 2007 and approved by the Government of Mongolia.

Figure 6: Road Sections of the Western Regional Road Corridor

Source: TA Consultant’s Report. TA 7449-MON Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

105. Table 8 below presents the road section lengths and funding arrangements for the other sections which are associated with the present Project identified for ADB funding.

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Table 8: Other Road Sections and Funding Sources

next two Next Yarant sections up 76km section to to Manhan Manhan section of 30 Bulgan to Khovd after km Next 40 Road next 110.8+103.3 Buratiin (north km Last 25.8 km to Sections 264 km 64 km km 85.3 km Davaa of Olgii) section Ulaanbaishint

Funded GOM GOM ADB & GOM PRC PRC GOM GOM No funding by source identified yet

ADB = Asian Development Bank GOM = Government of Mongolia PRC = Peoples Republic of China.

2.4 Report Structure

106. This Environmental Impact Assessment Report has been prepared by the Consultant4 on behalf of the Government of Mongolia. It is based on the Environmental Impact Assessment5 of the project for Preparing the Western Regional Road in Mongolia. This project EIA also includes work results of the Consultant6 and Detailed Design7 for the Olgii to Khovd sections of Western Regional Road Corridor development Project.

107. The EIA Report has been prepared following the Safeguard Requirement 1 (Environment) in the ADB Safeguard Policy Statement (2009) and the ADB’s Environmental Guidelines, and it also complies with the Government of Mongolia requirements. In addition, the first chapter - Introduction, has been included to provide background information and location of the proposed project section in relation to the total road alignment of 784.4 km, and to establish its importance in association with the development of the other sections of the alignment Accordingly, the report is organized as follows:

 Executive Summary  Introduction. Section 2 establishes the location of the Project, the Project Proponent, and an explanation of the purpose of the EIA. It also presents the organization of the EIA, additional background information and an explanation of the extent of the EIA study.  Environmental Legal and Administrative Framework. Section 3 provides information on the current environmental legislation of Mongolia specifically EIA requirements and provides a brief description of the environmental administrative framework.  Description of the Project. In accordance with the ADB Guidelines Section 4 provides the detailed description of the Project, need for the Project, Project location, magnitude of operation, environmental category of the Project, and implementation schedule.

4 Consultant TA 7449-MON, Regional Transport Development Project (Component 1). 5 Government of Mongolia/ADB. 2007. Feasibility Study EIA Ulaanbaatar. 6 Op cit. Consultant TA 7449-MON. 7 MCPC. 2008. Detailed Engineering Design for Olgii-Khashaat Pass Section and Khashaat Pass to Hovd Section. Ulaanbaatar. 27

 Description of the Potentially Affected Environment. Section 4 provides a description of the environment within the area potentially affected by the Project. The description is based on reviews of available documentation, statistical data, meetings with experts in the field and field surveys, and investigations. As required by the ADB environmental assessments guidelines, the following four aspects of the environment have been addressed in detail:

. Physical Resources – topography, soils, geological characteristics, air quality; . Ecological Resources – flora, fauna, nature reserves and unique habitats; . Economic Development – industrial and agricultural development, land use local transportation network, non- transport infrastructure within the potentially affected environment; and . Social and Cultural Resources – issues of health, public safety, recreational resources, cultural resources and aesthetics.

 Alternatives. Different Project alternatives are considered and compared in Section 6.

 Potential Impacts and Mitigation. Section 7 provides an assessment of potential impacts of the proposed road development in light of the existing conditions, together with recommended actions to prevent and/or otherwise mitigate unavoidable impacts expected to be incorporated as integral parts of the Project.

 Economic Assessment is presented in Section 8.

 Public Consultation and Disclosure. Information on public participatory workshops and consultations with experts and local administration is presented in Section 9.

 Grievance Redress Mechanism describing the process of recording and resolving public grievances is presented in Section 10.

 Environmental Management Plan is presented in Section 11 along with an Environmental Monitoring Plan.

 Conclusion. Conclusions drawn by the MRTCUD as the Project Proponent and the Consultant in this regard are stated in Section 12.

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3. POLICY LEGAL AND ADMINISTRATIVE FRAMEWORK

3.1 Environmental Policy

108. Mongolia has enacted a comprehensive policy and legal framework for environmental assessment and management. It has policies, legislation and strategies in place to manage the protected estate, 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 five layers ranging from the Constitution to international treaties, and to environment and resources protection laws.1

109. The main policy documents are the National Environmental Action Plan of 1996, the State Environmental Policy of 1997, the National Plan of Action to Combat Desertification, the Biodiversity Conservation Action Plan, and the National Plan of Action for Protected Areas, all developed under the Ministry of Nature Environment and Tourism (MNET) auspices, as well as the Mongolian Action Program for the 21st Century with subordinated aimag development plans developed by the National Council for Sustainable Development.2 The National Environmental Action Plan was updated in 2000 and the National Action Plan for Climate Change was added in the same year. Several program documents (e.g. National Water Program, National Forestry Program, Program of Protection of Air, Environmental Education, Special Protected Areas, and Protection of Ozone Layer) were also completed at the turn of the decade. State policy on Environmental Impact Assessment was in place in 1998. 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.3 Other documents, such as the annual Human Development Reports have increasingly incorporated environmental aspects.

110. 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, water and soil pollution will be controlled. In April 1996, Mongolia’s National Council for Sustainable Development was established to manage and organize activities related to sustainable development in the country. The country’s strategy is designed for environmentally friendly, economically stable and socially wealthy development, which emphasizes people as the determining factor for long-term sustainable development.

111. The health of Mongolia's natural ecosystems and populations of wild species is of both national and global importance. The country forms an important part of the global ecosystem in the ecological transition zone in Central Asia, where the great Siberian taiga, the Central Asian steppe, the high Altai Mountains, and the Gobi desert converge. In recognition of its global responsibilities, Mongolia has acceded to a number of international environmental conventions and the key ones are tabulated below (Table 9).

112. Each of these conventions places obligations on signatory governments ranging from the provision of a legislative basis for implementation, to adherence to the requirements and conditions of each convention, to monitoring implementation performance on a regular basis, to reporting on a regular basis and to the conference of parties.

1 UNDP. 2008. Institutional Structures for Environmental Management in Mongolia. Ulaanbaatar and Wellington. 2 Ibid. p15. 3 Ibid. p15.

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Table 9: International Environmental Conventions Signed by Mongolia Convention Year of Accession Convention on Biological Diversity (CBD) 1993 UN Framework Convention on Climate Change (UNFCCC) 1994 Kyoto Protocol 1999 UN Convention on Combating Desertification (UNCCD) 1996 Convention on the Protection of Wetlands of International 1998 Importance (Ramsar) Vienna Convention for the Protection of the Ozone Layer 1996 Montreal Protocol (regulating substances that deplete the 1996 ozone layer) Convention on International Trade in Endangered Species of 1996 Fauna and Flora (CITES) Convention on the Transboundary Movement of Hazardous 1997 Waste (Basel) Rotterdam Convention on the Prior Informed Consent 2000 Procedure for Certain Hazardous Chemicals and Pesticides in International Trade

Stockholm Convention on Persistent Organic Pollutants 2004 (POPs) World Heritage Convention 1990

113. The Government of Mongolia undertook a major environmental law reform in 1990 including the law of the land, protected areas, water, forest, wildlife, and native flora resources. The legislation base is extensive as evidenced by the following table of key environmental legislation.

Table 10: Key Environmental Legislation in Mongolia Name of the Law Year Adopted The Constitution of Mongolia 1992 Law on Environmental Protection 1995, revised in 2006 and 2008 Law of Land Jun 2002 Law on Land Cadastre and Mapping Dec 1999 Law on Land Fees Apr 1997 Law on Land Possession Jun 2002 Law on implementation of regulations related Jun 2002 to Land Possession Law Law on Geodesy and Cartography Oct 1997 Law on Special Protected Areas Nov 1994 Law on Buffer Zones Oct 1997 Law on Water Apr 2004 Law on Water and Mineral Water Resource May 1995 Fee Law on Forests Mar 1995 Law on Fees for Timber and Fuel wood May 1995 Harvesting Law on Prevention of Steppe and Forest Fires May 1996 Law on Reinvestment of Natural Resource Jan 2000 Use Fees for Conservation

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Name of the Law Year Adopted Law on Natural Plants Apr 1995 Law on Natural Plant Use Fees May 1995 Law on Protection of Plants Mar 1996 Law on Hunting 2000, 2003 Law on Fauna 2000 Law on regulation of export and import of Nov 2002 endangered species of flora and fauna Law on Hunting Reserve Use Payments and May 1995 on Hunting and Trapping Authorization Fees Law on Underground Resources Dec 1994 Law on Minerals 1997, revised in 2006 Petroleum Law 1991 Law on Air Mar 1995 Law on Hydrometeorology Nov 1997 Law on Protection from Toxic Chemicals Apr 1995 Law on Environmental Impact Assessment 1998, revised in 2002 Law on Tourism 1998 Law on Solid Waste Nov 2003 Law on prohibiting export and transportation of Nov 2000 Hazardous Waste

3.2 Environmental Law

114. Law on Environmental Protection. The Mongolian Law on environmental protection is the umbrella law for all environmental and natural resource legislation in Mongolia. It governs the land and subsoil, mineral 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 for sustainable development, citizens’ rights and obligations, the maximum level of natural resources, training and education for environmental protection, the environmental impact assessment principles, and environmental research financing. National policy to protect ecologically significant aspects of the environment and to restore natural resources is prepared under the Law on Environmental Protection.

115. Law on Air. The purpose of this law is to regulate actions in order to protect air quality, particularly with regard to issues related to the health of the country’s population and minimizing greenhouse gas emissions. The following administrative bodies are primarily responsible for the Law on Air:

 The Central Administrative Body responsible for Nature and the Environment develops an air protection national action plan; submits it to the Cabinet of Ministers for approval; organizes air quality and monitoring measurements; and develops standards and norms related to air protection and submits them to the appropriate institutions for approval.

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 The Central Administrative Body responsible for Health Care develops the national standards on permissible levels of air pollutants and has these standards approved by the appropriate agency.

116. Law on Water. The main purpose of this law is to prevent water pollution by prohibiting littering and contamination through toxic components near estuaries of water bodies, riverbanks and protection zones.

117. The Law on Water and Mineral Water Use Fees is designed to regulate fees for the use of water and mineral water and incorporate these fees into the state budget.

118. Mongolian citizens, foreign citizens, persons with no citizenship, economic entities and organizations that use water, mineral water and/or riparian zones in Mongolia for any purposes, are required to pay the fees. Fee rates for water use shall be determined by the Cabinet of Ministers, based on the limits set out in Clause 1 of Article 6 of the law or determined by aimag or Capital City Citizens Representative Khural based on Clause 2 of Article 6 of this law.

119. Law on Specially Protected Areas. The purpose of this law is to regulate the use and procurement of land for state protection, to foster scientific research, and to preserve and conserve the land’s original condition in order to protect specific characteristics, unique formations, rare and endangered plants and animals, historic and cultural monuments, and natural beauty. The law establishes four protected area categories, each managing land for a different purpose under a separate management directive. These include Strictly Protected Areas (SPA), National Parks (NP), Nature Reserves (NR) and National Monuments (NM).

120. Strictly Protected Area is the most restrictive category of the protected areas in Mongolia. Strictly Protected Areas (SPAs) are classified further into three zones: Pristine Zone, Conservation Zone and Limited Use Zone. Only conservational activities and research studies, such as observation, are allowed in Pristine Zones. Activities such as digging, the use of explosives, extracting sand and stone, harvesting wood or constructing a road are prohibited in Conservation Zones. According to Article 12.1 of the Law on SPA, it is not prohibited to construct a road in Limited Use Zones.

121. National Park is the second level of protected areas and has a more user-oriented designation. National Parks (NPs) are classified into Special Zones, Travel and Tourism Zones and Limited Use Zones. According to this law, NPs consist of areas that have “relatively preserved” natural features, historical, cultural, educational and ecological importance. Only conservation activities, research studies undertaken by means that do not negatively impact nature, rehabilitation of soil, creation of conditions to reproduce plants and animals, and an elimination of damage from natural disasters are allowed in Special Zones. Activities such as road construction are prohibited in Special Zones and Tourism Zones. According to Article 17 of the Law on SPA, it is not prohibited to construct a road in a Limited Use Zone.

122. Nature Reserve is the area taken under state special protection for the conservation, preservation, and restoration of natural features, natural resources and wealth. Natural Reserves (NRs) are classified into Ecological Reserves, Biological Reserves, Paleontological Reserves and Geological Reserves. In any NR, it is prohibited to undertake activities for industrial purposes that change the natural original condition or activities which are likely to have a negative impact on the environment such as construction of buildings, excavation of land, the use of explosives, or exploration and mining for any resources.

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123. National Monuments consist of land taken under state special protection for the purpose of preserving the heritage of natural unique formation as well as historical and cultural traces in their natural state. Natural Monuments are classified into Natural, Historical and Cultural Monuments. It is prohibited to construct buildings, plow or dig land, use explosives, or mine natural resources within 0.1 km to 3.0 km of Natural, Cultural and Historical Monuments.

124. Law on Buffer Zones. The purpose of this law is to regulate determination of Specially Protected Area Buffer Zones and activities therein.

125. Law on Fauna. The purpose of the Law on Fauna is to regulate the protection and breeding of fauna, which permanently or temporarily reside in soil, water or on land within Mongolia. Article 7 (Protection of Very Rare and Rare Fauna) lists the very rare fauna as “Asiatic Wild Dog (Cuon alpinus), Snow Leopard (Uncia uncial), Eurasian Otter (Lutra Lutra), Gobi Bear (Uros Arctos gobiensis), Przewalski horse (Equus przevalski), Wild Bactrian Camel (Camelus Bactrianus ferus), Musk deer (Moschus moschiferus), Reindeer (Rangifer tarandus valentinae), Moose (Alces alces pfizenmayeri), Saiga Antelope (Saiga tatarica tatarica), Mongolian Saiga (Saiga tatarica mongolica), Central Asian Beaver ( Castor fiber birulai), Whooper Swan (Cygnus cygnus), Ring-necked Pheasant (Phasianus colchius), Hooded Crane (Crus monacha), White- naped Crane (Crus vipio), Siberian Crane (Crus leucogeranus), Houbara Bustard (Chlamydotis undulate), Dalmatin Pelican (Pelicanus crispus), Relict Gull (Larus relictus), Baikal Sturgeon (Acipenser baeri baicalensis), Amur sturgeon (Acipenser schrenki), Tench (Tinca tinca), Amur Sculpin (Mescottus haitej), and Emperor Moth (Etudia pavonia).4

126. A list of rare and endangered fauna species is provided in the Mongolia National Red Book. The Aimag Citizen Representative Khural shall approve measures for protection of very rare and rare fauna within their territory and exercise control over the implementation.

127. Law on Flora. The Law on Flora coordinates activities related to protection, sustainable use and rehabilitation of plants, excluding cultivated plants and forest. As part of this law, the Mongolian Government has created a list of rare and endangered flora species.

128. Article 8 of this law mandates that the use of plants for industrial use within 2 km of an estuary of river, natural springs or riverbank or in the area where vegetation cover is degrading is strictly prohibited.

129. Law on Forest. The Law on Forest regulates actions related to the protection and sustainable use of forest resources. The forest area is classified according to its ecological and economic values as follows:

 Special Forest Zone (alpine forest, pristine and conservation zones of SPA and special zone of national park). Protection and use of this zone is controlled under the law of Specially Protected Areas.  Protected Forest Zone (other forest areas of SPA, green belt area, saxsaul forest and forest that growing 30 degree slope).  Forest Use Zone. Any forest area that is not included in the above zones.

130. Law on Protection of Cultural Heritage. The purpose of this law is to coordinate all activities related to research of cultural heritage, and registration, study and classification,

4 Government of Mongolia. 2007. EIA. Ulaanbaatar.

33 valuing, preservation and protection, advertisement and renovation, and issues related to ownership and use of cultural heritage.

131. The law identifies a number of heritage relics, places and sites according to their scientific, historical and cultural importance. Some ancient tombs/burial sites and calligraphy are also recognized as heritage items.

132. Article 17 of Chapter 6 of this law states that if subsoil exploration activity discovers any historical and cultural heritage items, operations should stop and the governor and police of the aimag or soum, along with relevant research institutes shall be informed. It is prohibited to move any historical and cultural items without the permission of the Ministry of Education, Culture and Science.

133. The investigation of cultural heritage shall be implemented by the Professional Inspection Agency, state inspectors, or governors of aimag and soum. The State Professional Inspection Agency shall carry out this investigation in accordance with various laws on protection of cultural heritage, norms, regulation and standards.

134. The Ministry of Education, Science and Culture (MESC) is responsible for determining the status of historical, architectural and memorial sites of archeological significance.

135. Law on Land. The purpose of this law is to regulate the possession and use of land by citizens, economic entities and organizations of Mongolia. The law contains a number of provisions which set substantive and procedural land conservation requirements that prohibit activities that are harmful to human health, environmental protection or environmental balance. The law allows local governments to use an “appropriate part” of land fee revenues for land conservation activities.

136. Law on Hunting. The purpose of this law is to regulate the hunting and trapping of game animals and the proper use of hunting reserves. Hunting requires a special permit and can take place during prescribed seasons. Contact permits and special permits for the hunting and trapping of game animals shall be issued by the State Administrative Central Organization. Article 13 describes these issues. Article 14 lists the prohibited hunting and trapping methods such as the use of chemical substances and explosives, digging pits, placing triggered guns and arrows or other traps on animal paths.

3.3 Environmental Impact Assessment Requirements

137. The Project will be subject to the environmental requirements of both Mongolia and those of the ADB. These requirements are as follows.

138. Environmental Impact Assessment Requirements of ADB. All projects considered for loans and investments by ADB are subject to classification for the purposes of determining environmental assessment requirements. The determination of the environment category is to be based on the most environmentally sensitive component of the project. Within this system, projects are screened for their expected environmental impacts and assigned to one of the following four categories:

 Category A: Projects with potential for significant adverse environmental impacts. An environmental impact assessment (EIA) is required to address significant impacts.

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 Category B: Projects judged to have some adverse environmental impacts, but of a lesser degree and/or significance than those of category A projects. An initial environmental examination (IEE) is required to determine whether or not significant environmental impacts warranting an EIA are likely. If an EIA is not needed, the IEE is regarded as the final environmental assessment report.  Category C: Projects unlikely to have adverse environmental impacts. No EIA or IEE is required, although environmental implications are still reviewed.  Category FI: Projects are classified as category FI if they involve a credit line through a financial intermediary or an equity investment in a financial intermediary. The financial intermediary must apply an environmental management system, unless all subprojects will result in insignificant impacts.

139. Environmental Impact Assessment Requirements of Mongolia stipulates the EIA requirements of Mongolia. The purpose of this 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.

140. 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. Type and size of the planned activity define responsibility which may be either MNET or aimag government (Local Government).

141. There are two types of EIAs defined in the Law: General EIA and Detailed EIA. To initiate a General EIA, the project implementer submits a brief description of the project including the feasibility study, technical details, drawings, and other information to MNET (or aimag government). 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) cancellation of the project. The General EIA is free and usually takes up to 12 days.

142. The scope of the Detailed EIA is defined by the General EIA. The Detailed EIA report must be produced by an authorized Mongolian company which is approved by the MNET by means of a special procedure. The developer of the Detailed EIA should submit it to the MNET (or aimag government). An expert of the organizations who was involved in conducting the General EIA should make a review of the Detailed EIA within 18 days and present it to MNET (or aimag government). Based on the conclusion of the expert the MNET (or aimag government) takes a decision about approval or disapproval of the project.

143. The cost for the Detailed EIA is covered by the project implementer and can amount to $50,000 in the case of large projects. As the development of the detailed EIA is the most likely conclusion of the General EIA then this EIA report can be used as a substantial basis for the Detailed EIA.

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144. The Detailed EIA must contain the following chapters:

 Environmental baseline data;  Project alternatives;  Recommendations for minimizing, mitigation and elimination of impacts;  Analysis of extent and distribution of adverse impacts and their consequences;  Risk assessment;  Environmental Protection Plan;  Environmental Monitoring Program; and  Opinions of residents on whether the project should be implemented.

145. Figure 7 below presents a simplified diagram of the EIA procedure in Mongolia.

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Figure 7: Simplified Diagram of the EIA Procedure in Mongolia

MNET or Local Government appoints Prior to implementation, project EIA expert to conduct a General EIA. Implementer submits the project The expert has 12 working days. description, the technical and economic General EIA may lead to 1 of 3 feasibility study, the work drawings and (possibly 4) conclusions: other related documents to MNET or local government

Rejection of the project on The project may be The project may be A Detailed EIA is required the ground of non- implemented without implemented pursuant to conformity with the conducting a Detailed RIA specific conditions relevant legislation, or

adverse impact of the equipment and technology on the environment

Authorized company conducts Project implementer selects Detailed EIA according to schedule authorized company to conduct and scope determined by General Detailed EIA and negotiates costs EIA.

Detailed EIA report is submitted to MNET issues decision whether or the expert who conducted the not to implement the project based General EIA for review. The expert on the expert’s conclusion has 18 days to develop a conclusion and submit to the MNET for a decision.

Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

3.4 Administrative Framework

3.4.1 Institutional Framework for the Ministry of Nature, Environment and Tourism

146. National Level. The Ministry of Nature, Environment and Tourism (MNET) is the agency primarily responsible for the implementation of environmental policy in Mongolia. The organization chart of the MNET is shown in Figure 8. Under MNET, there are several government agencies involved in the protection of the environment in Mongolia, as outlined below.

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Figure 8: Organization Chart of the Ministry of Nature, Environment and Tourism

Council of MINISTER Ministers

Vice-Minister

State Secretary

Dept. of Dept. of Dept. of Dept. of Dept. of Dept. of Sustainable State Environme Special Information Tourism Developme Administrat nt and Protected Monitoring nt and ion and Natural Areas and Strategic Manageme Resources Administration Evaluation Planning nt and Management

Internatio Finance Ecologically nal and Clean Cooperati Investmen Technologie on ts Division s and Division Science Division

AGENCIES

The National Agency for Meteorology, Water Authority Forest Authority Hydrology ,and Environmental (Implementing (Implementing Monitoring (Implementing Agency of the Agency of the Agency of the Government) Government) Government )

Source: Ministry of Nature, Environment and Tourism.

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147. Department of Sustainable Development and Strategic Planning is responsible for the elaboration of strategic and sustainable development policies, plans, programs and projects in areas within the mandate of the Minister of Nature, Environment and Tourism. The department’s functions include developing 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.

148. Department of State Administration and Management is responsible for administration and leadership in the Ministry. Its functions include addressing human resource management and development issues, providing legal advice, introducing best practices for administration in the Ministry, developing systems of reporting and accountability, resolving appeals and complaints, and improving organizational management. The department focuses on ensuring the continuity and stability of Ministry operations by way of professional and disciplined departments staffed with capable public servants, and on developing human resource policies and improving the effectiveness of their implementation.

149. Department of Environment and Natural Resources is responsible for the planning and 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:

 Organizing 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;  Assuming responsibility for the export of cultivated plants, the gathering of wild plants, and the import of vegetable matter; Coordinating the implementation of policies on flora, forest and water resource management;  Coordinating household and industrial waste management policy; and  Managing air pollution.

150. 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

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assuring 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.

151. Department of Tourism the Department of Tourism provides basic direction and policy to the tourism sector of the country by giving priority to the activities of the National Tourism Center. Implementing the complex objectives of millennium development is the main task of the National Tourism Center established under the Ministry in May 2009.

152. International Cooperation Division The functions of the division include implementing and coordinating policies for international cooperation in the environmental sector; developing, obtaining funding for and ensuring the implementation of international projects; and implementing and improving the outcomes of environmental-sector conventions and international agreements to which Mongolia is a party.

153. Division of Information, Monitoring and Assessment is delegated the authority for monitoring and assessing the implementation of laws, government policies and programs. Its functions include monitoring and evaluating the implementation of government programs and resolutions concerning the environmental sector, promoting the use of information technologies in this sector, compiling an environmental information databank and providing data to end users, and establishing a system of reporting and accountability.

154. Finance and Investments Division is responsible for Administration and Finance and the Accounting functions in the environmental sector; planning, allocating and disbursing budgetary funds provided by the Parliament of Mongolia to the Minister of Nature and Environment; preparing financial reports and organizing performance audits; consolidating fees and payments for the use of natural resources; disbursing funds for environmental conservation and natural resource restoration, as well as for the protection of Specially Protected Areas, natural resources and game wildlife; and creating, administering and reporting on the "Environmental Protection Fund" of the Ministry of Nature and Environment.

155. 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.

156. 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.

157. 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 Ministry of Nature and Environment, 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 the conservation and restoration of water resources.

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158. Forest Authority is responsible for the implementation of the National Forests Policy and the "Green Wall" Program, as well as policies concerning forest conservation, reforestation, appropriate forest resource use, the mitigation of insect and disease infestations and the prevention of forest and steppe fires. Its functions include developing and improving forestry policy coordination.

159. This unit's activities focus on assuring an 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.

160. Aimag and Soum Level. Aimag and soum governors are responsible for all environmental management at the local level with the exception of protected areas management. They are also responsible for issuing local permits and licenses and for natural resource management.

161. Enforcement. Enforcement of regulations is the responsibility of environmental inspectors at the aimag level and rangers at the soum level. Aimag level inspectors function with guidance from the State Professional Inspectors of the General Agency for Specialized Inspection under the Deputy Premier of Mongolia. Rangers continue to report to the soum government while aimags have their own environmental protection agency with about 3 to 5 staff members.

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4. Description of the Project

4.1 Type of Project

162. The proposed Project, for which this EIA is addressed, is a road upgrading and paving project. As currently proposed, the major activities under Component 1: Preparing the Western Regional Road II, will be:

 Feasibility study and other Project document review;  Complete road design review and due diligence;  Prepare Pavement Maintenance Plan;  Project estimate review;  Prepare procurement documents;  Update economic and financial analysis;  Update transport and trade facilitation study;  Undertake stakeholder consultations and update social development assessment; and  Update and prepare project specific EIA.

163. The EIA preparation will draw from all the above reviewing and updating activities.

4.2 Description of the Proposed Actions

164. The road section between Khovd and Buraatyn Davaa has been designed as a two lane road. The improvements proposed for the project road section are identified as follows:

 The road pavement edge shall be designed 0.6 m above the expected level of snow cover as required for Category III roads;  Widening the formation in existing earth road sections, retaining the existing alignment and profile wherever possible;  New earth formations along the currently unformed sections, with geometric characteristics that conform to Mongolian Road Design Standards;  Rehabilitating or maintaining existing bridges and culverts that are suitable to be retained; reconstructing structures that are unfit to be retained and constructing new bridges and culverts where necessary; and  Providing drains and slope stability measures.

165. The Western Regional Road is designed as a part of the Asian Highway No.4 (AH4). The Project has been designed according to Mongolian Road Design Standards, at the recommendation of the Mongolian government. According to Mongolian standards, the Western Regional Road is classified as a Category III Road, as seen in Table 11.

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Table 11: Road Category by Mongolian Standards Road Road No. of lanes Functional AADT Equivalent Divided or type category classification Passenger cars per day or Undivided Level of service Freeways Multi Lane Arterial B divided Expressways Highway Arterial, regional B Divided I C Divided/undivided II C Undivided III Two-lane Arterial, regional & local C Undivided roads roads IV Regional & local roads 400-2000 Undivided highways Conventional Low volume roads 1-2 lane Local roads <200 Mixed traffic Undivided * Level of Service: A – Highest; B – High; C – Average; D – Low; E – Very Low Source: Road Design Standard CNR 21-01-00.

166. Figures 9, 10 and 11 show the proposed typical cross sections for the road.

Figure 9: Proposed typical cross sections

Source: Department of Roads. 2008. Detailed Design for Road section from Khovd to Olgii. Ulaanbaatar. 43

Figure 10: Proposed typical cross sections

Source: Department of Roads. 2008. Detailed Design for Road Section from Khovd to Olgii. Ulaanbaatar.

Figure 11: Proposed typical cross sections

Source: Department of Roads. 2008. Detailed Design for Road Section from Khovd to Olgii. Ulaanbaatar.

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167. Under the Project, the following types of road improvement have been proposed:

168. Near Khovd, 11 km of the road is currently asphalt concrete. For this section, the improvement will be:

 Pavement and shoulders: Rehabilitation of the old asphalt pavement by removing the existing pavement and reusing the material as part of the embankment.  Road safety: road markings, road signs, and guide posts are required to be installed.

169. For the segments of road that are gravel (11.5 km in the Khovd-Khashaat Pass and 8.7 km in Khashaat Pass-Olgii section), the improvement will be:

 New construction: construction on the existing embankment in order to implement the proposed pavement composition;  Road safety: road markings, road signs, and guide posts are required to be installed.

170. In all of the other sections (improved earth and earth road), the improvements will be:

 New construction: road embankment cuts and fills in order to implement the proposed pavement composition and alignment; and  Road safety: road markings, road signs, and guide posts are to be installed.

171. Bridges and Culverts. Along the project road section, a total of 161 bridges and culverts were identified from the detailed design.1 Of the culverts, 123 are pipe culverts and 32 are box culverts. There are 18 single box culverts, 9 twin box culverts and 5 triple box culverts. Four of the bridges are located between Khovd and Khashaat pass while the other two are in the section Khashaat Pass to Buraatyn Davaa. The 6 bridges are planned to cross more than 20 m width water courses. The type of bridges is pre-stressed concrete simple beam concrete bridge. All bridges are less than 50 m long.

172. Road Maintenance Centers. The current road maintenance capability in the Project area is inadequate to cover the requirements for proper servicing of the new road. To remedy this, road maintenance centers will be established along the proposed road in Khovd and Olgii. The major duties of the maintenance centers are the following:

 Routine maintenance including pothole repair, crack patching etc.;  Removal of litter from roadside stopping areas and other locations; and  Emergency response activities such as accidents, snow removal, etc.

4.3 Bill of Quantities (BOQ) for the Project

173. The detailed BOQ for the project is being prepared and the current estimated quantities for the Project are listed in Table 12.

1 Department of Roads. 2008. Detailed Design for Road section from Khovd to Olgii. 45

Table 12: Estimated Quantities for the Project Item Total Quantity, m3 Material for sub-base and base 999,924 Rock fill for embankment 5,100 Excavation spoil 202,769 Borrow material for embankment 4338,854 Right of Way (ROW) material for 340,767 Embankment Source: DOR. 2009. Detailed Design. Ulaanbaatar.

4.4 Need for the Project

174. The major goal emanating from the construction of the Western Regional Road Corridor is to promote the regional transport of freight and passengers via the Western Road Corridor and increase economic development and regional trade. The expected outcome of the Project is an efficient and safe regional transport route that is developed in the Western Region of Mongolia linking the Xinjiang Autonomous Region of the PRC and Siberia in the Russian Republic through Khovd and Bayan-Olgii aimags of Mongolia. Therefore, the proposed development of the 147.9 km Project section is of utmost importance.

4.5 Environmental Category of ADB

175. The pre-feasibility2 study for the Western Regional Road Corridor Project from Yarant to Ulaanbaishint had classified this project as Category A.

176. Likely adverse environmental impacts on local flora and fauna, including potential impact on endangered mammal species e.g. Mongolian Saiga Antelope (Saiga tatarica mongolica) in Manhan Area, Wild Mountain Sheep (Ovis ammon), and Ibex (Capra siberica) in Bodonch area.

 Extraction of mineral resources (e.g. sand and stone aggregates from riverbeds and quarries).  Potential impact on Khar-Us Nuur National Park if the proposed alignment is not utilized.  Potential impact on wildlife and wildlife habitats at Bodonch where blasting is to be undertaken.  Potential risk to safety of herders and their livestock crossing the road.  Potential trans-boundary drug/human trafficking, HIV/AIDS/socially transmitted infections (STIs) and communicable diseases.  Potential poaching or hunting of wildlife.

177. Potential adverse impacts of the Project under consideration are:

 Extraction of mineral resources (e.g. sand and stone aggregates);  Risk to safety of herders and their livestock crossing the road; and  Poaching or hunting of wildlife.

2 ADB TA 4643 Pre-Feasibility Study of the Western Regional Road Corridor, Preliminary Environmental Impact Assessment, Draft Final Report. Vol. 3.

46

178. The above impacts can be mitigated by adopting preventative measures, best engineering and construction and safety practices, and capacity building of the Special Protected Area Administration.

4.6 Project Location

179. The project road section is located in the western part of Mongolia between Khovd and Olgii aimags. The proposed road will stretch approximately 147.9 km between Khovd to Buraatn Davaa as shown in Figure 12. Appendix I includes 1:100,000 maps for the project alignment.

Figure 12: Location Map

Source: TA Consultant’s Report. TA 7449-MON, Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

180. From Khovd to Buraatyn Davaa (Figure 13), the existing road passes through hilly and mountainous areas. This section includes two mountain passes (Khashaat and Buraat) and two rivers (Shurag and Hongio). At Buraat Pass, the alignment is serpentine for a length of 538 m. In the areas of Khashaat Pass and Buraatyn Davaa, vertical gradients of the alignment reach approximately 5.8 percent. The serpentine route on the Buraat pass should be reconstructed according to design standards. Perennially frozen areas with elements of thermocarst topography are located at higher altitudes between Khashaat and Burat Passes.3

3 Feasibility. Study 2007.Environmental Impact Assessment, Preparing the Western Regional Road. Ulaanbaatar. 47 Figure 13: Road Alignment

Source: TA Consultant’s Report. TA 7449-MON, Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

48

4.7 Associated Project Components

181. As described in Section 2 (Introduction) there are other road sections which are part of the road from Yarant at the Chinese border to Ulaanbaishint at the Russian border. For the road section from Khovd to Buraatyn Davaa, to generate the expected benefits, these other road sections must also be developed. All these sections have funding arrangements (Figure 14) and several of them are in various stages of development.

Figure 14: Associated Project Components

25.8 km Financing Yet to be Arranged

Source: TA Consultant’s Report. TA 7449-MON, Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar. 49

4.8 Associated Facilities

182. Quarries and Borrow Pits. One of the main issues associated with road construction is exploration of land and extraction of construction material. The locations of quarries and borrow pits and quality and quantities of mineral resources to be extracted (gravel, sand, spoil) are important factors to the project cost and the environment. Quarrying and restoration of quarries is also closely related to natural resource and the environmental protection. A total of 11 quarries and borrow pits were identified.

183. The location of quarries and borrow pits in the Project area are shown in Table 13 and in Figure 15.

Table 13: Location of Borrow Pit and Quarries in the Project Area Location of Distance borrow Kilometers from road Location Material of quarries pit/quarry alignment Near Khovd BQ-1 417.3km 0.1km Modon ovoo pass Sand city Near the Fine sand with coarse BQ-2 470.25km 3km Har Usuur hill Shurag bridge graded gravel Near the Hongio (food and petrol) Fine sand with coarse BQ-3 499.85 0.1km Hongoi bridge service point graded gravel Near the beginning of BQ-4 Barzgar pass 513.15km 0.3km Sandy gravel soil Hashaat narrow valley Huh bugshiin Near the beginning of BQ-5 am narrow 513.85km 0.15km Sandy gravel soil Hashaat narrow valley valley Near the top of Hashaat Khashaat pass 0.15km east pass (0.7 km from here BQ-6 529.15 Sandy gravel soil area side to the top Hashaat pass) Holvoo lake’s BQ-7 537.65 0.03km At the Holvoo lake Silty sand area Buraat pass to west side Near the top of Buraat BQ-8 554.0 Gravelly fine sand area 0.4km pass Near the Shar 0.1km to BQ-9 590.35km Sand-gravel mixture lake east side Near the Shar 1km to east BQ-10 600.25km Sand-gravel mixture lake side Near the Shar 0.25km to BQ-11 605.75km Shar lake Sand lake east Note: BQ is abbreviation for Borrow Pits & Quarries. Source: TA Consultant’s Report. TA 7449-MON, Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

50

Figure 15: Location of Borrow Pits and Quarries in the Project area

Source: Government of Mongolia. 2007. Feasibility Study EIA. Ulaanbaatar. 51

4.9 Traffic Projections

184. Table 14 presents Feasibility Study forecasts of traffic, measured in vehicles per day, in the “with road plus border improvement” case for the whole length of the road corridor. Traffic studies will be conducted in the course of the present review to update these traffic projections.

Table 14: Summary of Average Daily Traffic (ADT) Projections

Light Medium Heavy Medium/ Year Car Jeep Minibus Tractor Motorcycle Truck Truck Truck Heavy Bus

Khovd – Olgii 2006 27 44 30 5 5 25 1 0 30 2013 60 98 58 10 109 56 2 2 67 2017 103 168 91 15 156 96 4 3 115 2022 198 322 158 26 243 183 7 5 220 2027 358 583 266 44 372 331 13 9 398 2032 621 1,012 428 71 555 575 23 14 690 Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

4.10 Implementation Schedule

185. The implementation schedule for the project is being prepared under the present study. The implementation schedule will be based on the amount of Project work with due consideration to the following aspects:

 The project will secure the necessary funding subsequent to the completion of the review of the detailed design;  Asphalt pavement work is limited to 5 months of the year (May to September) and earthwork is limited to 6 months of the year (May to October) because of cold weather;  Stockpiling of aggregates, pre-cast concrete structures and other preparatory works are conducted throughout the year; 186. An implementation schedule prepared by the Design Review Consultant is presented below.

52

Table 16: Project Implementation Schedule

Source: TA Consultant’s Report. TA 7449-MON, Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

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5. DESCRIPTION OF THE ENVIRONMENT

5.1 Environment of Mongolia

187. Mongolia is a land-locked country situated between latitude 420 Nand 52oN latitude and longitude 880 Eand 120oE longitude and covers an area of just over 1.5 million km2 in North East Asia. The Mongolian environment is harsh. It experiences temperature extremes, the soils are poor, there is a short growing season and rainfall is low. Its ecosystems are extremely fragile.

5.2 Assessment Process

188. The description of the potentially affected environment is organized under four major headings, as provided in the ADB Environmental Assessment Guidelines (2003), as follows:

 Physical Resources – climate and air quality, topography and soils, geology and seismic characteristics, noise and vibration, surface and ground water;  Biological Resources – flora (plants), fauna (wildlife), nature reserves and unique habitats;  Economical Development – industries, infrastructure facilities, land use, agricultural development, mineral development, and tourism facilities;  Social and Cultural Resources – population and communities, health facilities, education facilities, socio-economic conditions, and physical or cultural heritage.

5.3 Definition of the Project Area

189 The potentially affected environment associated with the current Project (generally referred to as the project area) is defined principally in regard to two factors:

 The nature and scale of the proposed action;  The sensitivity and circumstances of the environment in which the proposed action will occur or issues of special concern

190. The nature of the actions proposed within the context of the current Project ranges from road rehabilitation to new road construction, which includes road construction on the existing alignment including road embankment cuts and fills. Although the physical and biological environment in which these actions will occur will be limited largely to the Project road section and immediately adjacent areas, socio-economic impacts may occur over a wide area and not merely along the road itself. In addition, indirect and cumulative impacts could take place over an appreciably larger area and the conceptual limits of the project area must be expanded in accordance with the circumstances of the particular environmental attribute under consideration.

191. Administratively, Mongolia is divided into 21 aimags (provinces) and the capital city Ulaanbaatar. Aimags are divided into soums which are further divides into bags. Ulaanbaatar and big cities are sub-divided into districts that are further divided into khooros. The proposed road section traverses through two aimags – Khovd and Bayan-Olgii – with a combined population of approximately 190,400 (2009). The soums within the project area include: 54

 Khovd Aimag: Erdeneburen, Khovd, Buyant;  Bayan-Olgii Aimag: Tolbo;

5.4 Physical Resources

192. Geo-physical environment. The Mongolian geo-physical environment is very varied and can be divided into six zones – desert, mountain, mountain taiga, mountain forest steppe, arid steppe and taiga. The northern part of the country is covered by forest and mountain ranges and the southern part by desert, desert steppe, and steppe areas with low mountains. The western part is dominated by the high snow-capped mountain belt of the Mongol Altai and Khangai mountainous regions, with their perpetual snow and glaciers and the eastern part by vast plains and wild heaths. About 81% of the country is higher than 1,000 metres above sea level and the average elevation is 1,580 m. The highest mountain isTavan Bogd in Bayan-Olgii Aimag at 4,374 m and the lowest point is Khukh Nuur in the east at 560m.

5.4.1 Topography

193. Overview. The project area is located within the Altai Sayan Eco-Region that covers the territory of Mongolia, China, Russia and Kazakhstan. Located in the far west of Mongolia along the Altai Mountains, which stretch approximately 1,500 km, the average altitude of Khovd province is 2,230 m above sea level. The lowest point is 1,350 m in Bayannuur soum, while the highest point is 4,650 m, at the peak of the Altai Tavan Bogd Mountain.

194. The proposed project alignment will primarily follow existing roads that pass through mountain areas, hills, canyons, valleys, and plains with elevations ranging from 1,400 m to 2,600 m above sea level as seen in Figure 16.

Figure 16: Longitudinal Profile for the Project Road Section

Source: Government of Mongolia. 2007. Feasibility Study EIA. Ulaanbaatar. 55

195. Multi track. A characteristic feature of the plain and hilly stretches of the road corridor is earth multi tracks. Due to lack of a paved road, drivers have optimized their traffic routes within road corridors throughout virgin lands for decades. After a new track is established by increasing numbers of drivers, it begins to erode as a result of rainfall, snowfall, wind and other natural factors. Therefore, the tracks are constantly degrading and drivers finding it difficult use these, create new tracks. At slopes, erosion processes triggered in this way contribute further to rilling and gullying. In permafrost areas multi track contributes to thermal erosion (thermokarst) of the terrain. The number of tracks may reach 10 and more and can be spread across the width of the plain as seen in Figure 17. This leads to degradation of land, damage to flora, triggers erosion and generates substantial amounts of dust.

Figure 17: Multi-Track Earth Road (Khovd –Kashaatyn davaa)

196. The project area. Topographic features vary substantially within the project section of the road. From Khovd to Buraatyn Davaar, the road passes largely through dry steppe and steppe with vertical zonality, as well as high mountain areas running in north-west direction. The landscape near Khovd is interzonal, namely meadow landscape on saline soils with sedges of river valley bottom. The road ascends through mountain dry steppe with petrophytic forbs grasses and forbs–feather grasses steppe.1 Further, it crosses two mountain passes (Khashaat and Buraat) in mountain meadow landscape with alpine-vegetation and descends to forbs– feather grass steppe near Tolbo Lake. After the project road section, the road passes along Tolbo Lake for approximately 23 km at a distance of approximately 300–400 m in the south and several kilometers in the north. Numerous alternative dirt paths (tracks) were observed from Khovd to Khashaat Pass and between Khashaat and Buraat Passes. The altitudes within the section vary from about 1,400 m in Khovd to 2,600 m at passes and again 2,200 m just before Tolbo (Figure 16).

1 Govt of Mongolia 2007. EIA. Ulaanbaatar. 56

5.4.2 Geology

197. The project area is situated in the Mongol Altai high mountainous area. The geological setting of this territory began to form in the Cambrian Period, when the rocks were folded and faulted as the Mongolian and Siberian cratons collided in the Paleozoic and Mesozoic eras. Granite rocks dominate the high peaks.

198. The Altai Mountains were formed mostly by Paleozoic rocks of intrusive complex, comprised of granite-granodiorite, granite. In Khovd Aimag, gabbro, granite, diorite, granodiorite rock deposits were found, along with a metamorphic massif underlying the Bodonch Canyon Mountains.

199. According to the geo-morphological map of Mongolia, the terrain primarily includes excessive rolling ranges, medium rolling ranges and mountains, slight rolling ranges of sloped structure, mountainous ravines, semi-level surfaces of mountain skirts, glacial valleys, mountains with sharp ridged peaks, alluvial lake valleys, delluvial - prolluvial and mountain river valleys.2

200. Quarries and Borrow Pits. As one of the main issues associated with road construction is exploration of land and extraction of construction material the locations of quarries and borrow pits, quantities of mineral resources to be extracted (gravel, sand, spoil) and their qualities are important factors to the environment. Quarrying and restoration of quarries is also closely related to natural resource and environmental protection.

5.4.3 Soils

201. The following soil types have been identified in Western Region of Mongolia where the Project is located:

 Mountain tundra ochro, peaty-gleye, and cryoturabated (destructed) soil is mainly spread out in the area of Altai Mountain above 3,000-3,200 m. Sand, gravel and bare rocks mostly cover the soil surface. In areas with sparse vegetation, the soil is dense and is formed by sediment of moraine sand, gravel and cobble stone. The soil is very stony and the concentration of clastic rock increases up to 80% at deeper depths.  Mountain meadow and meadow steppe soils are distributed in the humid area of the northern portion of the Mongolian–Altai Mountain and in depths in the Altai Mountains.  Soil forming sediment is eluvial-diluvial gravel sediment and moraine rocky sediment. Thus, the soil content is clastic rocky and plant roots are able to get into the soil between rocks. Because it has moraine sediment, there is heavy loamy soil with huge cobblestones; below 70 cm depth these huge cobblestones are mostly found.  Mountain steppe soils extend in the Altai Mountains area with an altitude between 2,400 m to 2,500 m and 2,900 m to 3,000 m. The soil surface is gravel floored with scattered vegetation cover. From soil surface to a depth of 40-50 cm, the soil is sandy, gravelly, pebbly, and stony.

2 Government of Mongolia. 2007. EIA. Ulaanbaatar. 57

 Mountain desert steppe and desert soils are spread in the southern border of the Altai Mountains with altitudes between 1,500 m to 1,600 m and 2,400 m to 2,500 m. The soils are semi-desert brown soil and desert gray brown soil.

202. The rivers in the project area originate from the Altai Mountains. Thus, the upstream and midstream areas are narrow valleys and canyons; flood plains are not formed in this area, but are clearly formed downstream. Alluvial meadow gleyey soil is formed under the humid conditions of the main floodplain and one of the water sources is permafrost thawing. Groundwater is primarily located at soil depths of 90–160 cm, with soil having 100% vegetation cover. As a result the mull-humic dominates in the soil.

203. Soil characteristics vary substantially within the project road section and the following presents the general types of soils:

 High mountain steppe-raw humic soils are widespread for high altitudes sections between Khovd and Oilgii and spots of high mountain tundra occur largely between Khod and Buraatyn Davaa.  Govi brown soil dominates near Khovd and Olgii.

5.4.4 Permafrost

204. Permafrost is a part of upper layer of the Earth crust that is characterized by negative temperatures of soils/rocks and occurence or possible of occurrence of underground ice. There are two layers in the permafrost: an active layer with seasonal thawing/freezing and a perennially frozen ground or cryolite zone. Global warming and anthropogenic impacts intensify permafrost warming and thawing. Permafrost degradation can cause substantial change in water hydrology, damage infrastructure and affect ecosystems. Thermokarst is an uneven/hummocky terrain created by thawing permafrost.

205. Bayan-Olgii and Khovd aimags are located in the Altai Mountain region, where permafrost is divided into five zones that depend on altitude: (i) continuous, (ii) discontinuous, (iii) widespread island, (iv) rare spread island, and (v) sporadic:

 Continuous permafrost lies predominantly in mountain areas with altitude of more than 3,000 m above sea level. The temperature of the permafrost ranges between -1.5о С and -2.5о С and its thickness is between 80 and 150 m. The minimum temperature of the permafrost drops to -4о С, and in some locations, permafrost thickness reaches 200-500 m.  Discontinuous permafrost is widespread in the Western part of the Mongol- Altai Range and in some upper reaches of the Khovd River. The temperature of the permafrost ranges between -0.8о С and -1.5о С, with a thickness between 40 and 80 m. The maximum thickness of permafrost is 200 m.  Widespread island permafrost is located in areas with elevations between 2,500 and 2,800 m above sea level. The temperature of the permafrost is between -0.2о С and -0.8о С, with a thickness ranging from 15 to 40 m. The maximum thickness of the permafrost is 100 m. 58

 Rare spread island permafrost occurs throughout valleys of rivers and lakes with elevations of 2,000-2,500 m above sea level. The temperature of the permafrost is between -0.1оС and -0.2оС, and the thickness between 5 and 15 m.  Sporadic permafrost occurs in the muddy soil of springs. The average temperature of the permafrost is between -0.0оС and -0.1оС, with an average thickness between 0.5m and 5.0 m.

206. Minimum temperature of soil surface. The minimum temperature of soil surface should be considered as well, as it is one of the major parameters that will influence road construction. The absolute maximum of soil surface temperature ranged between 160C and 32о С and absolute minimum value between -40 and -47о С. The monthly absolute minimum value of soil surface minimum temperature is highest (around 0о С) in June or August and the lowest is in February.3

207. Various types of permafrost occur within the project area. Rare spread island permafrost is widespread around Olgii, but not common close to Khovd town and the lower reaches of the Khovd River. From Khovd city to Buraatyn Davaa continuous, discontinuous, widespread island, and rare spread permafrost have been reported.

208. More specifically, permafrost characteristics (active layer for perennially frozen ground means depth of thawing, while for seasonally frozen ground – depth of freezing) in the project area (as shown in Figure 18) are described described below.

 High altitude parts of Mongolian Altai between Khovd and Buraatyn Davaa contains perennially frozen soil with the annual temperatures of soil of 0- -5C and active layer of 1.0-4.5 m.

 In Olonuur area between Khovd and Olgii, areas with degraded permafrost were noticed with permanent change of landscape and location of thermocarst lakes. Thermokarst terrain can be observed in Olonuur area.

3 Government of Mongolia 2007. EIA. Ulaanbaatar. 59

Figure 18: Map of Permafrost in the Project Area

Source: Administration of Land Affairs. 2004. Geodesy and Cartography. Geographic Atlas of Mongolia. Ulaanbaatar. 60

5.4.5 Seismic Characteristics

209. Mongolia is divided into 6 active earthquake zones, based on information on earthquakes that occurred between 1900 and 1972. The area of the proposed project road falls within the Mongol Altai zone.

210. Mongol Altai Zone. This zone includes the Mongol Altai mountain range. The largest earthquake in this zone occurred near the Munhhairhan Mountain in August 1931. Its magnitude exceeded 8.0. Since then, no quake with a Magnitude of 7.0 or greater has been recorded in this zone.

211. Earthquakes in Mongolia have occurred primarily along mountain ranges situated in the west, southwest and northwest of the territory. Figure 19 shows the locations of earthquake epicenters around the project area.

Figure 19: Seismic Activity in the Project Area (1900-2000)

Source: Administration of Land Affairs. 2004. Geodesy and Cartography. Geographic Atlas of Mongolia. Ulaanbaatar.

5.4.6 Natural Disasters

212. The topography and geology of the area, climatic conditions, and hydrologic regime of rivers define the character of natural hazards such as rock falls, flashfloods and winter storms in the project area. Flashfloods (mudflows) are a distinctive feature of the flood regime of the Mongolian mountain streams and rivers. Rockfalls are widespread in canyons at high altitude 61 sections of the road. However, there is no evidence for occurrence of avalanches or landslides in the project area.4 Table 16 and Figure 20 below provide an overview of the natural disaster areas within the Project alignment.

Table 16: Location and Length of Road Sections Prone to Natural Disasters

Type of natural hazard Location/Chainage Length Mitigation measure

Blowing and drifting snow Buraat and Khashaat passes 500m earthen fence Flash floods Khovd-Shurga bagh 2x2m box culvert Shurga bridge-entrance of Hongio 2.5x2m box culvert canyon Shurga bridge-entrance of Hongio 2x2m box culvert canyon Shurga bridge-entrance of Hongio 3x3m box culvert canyon Shurga bridge-entrance of Hongio 2x2m box culvert canyon Khashaat pass 2.5x2m box culvert Buraat pass 2x2m box culvert Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

Figure 20: Location of Natural Disasters in the Project Area

Source: Government of Mongolia. 2007. Feasibility Study EIA. Ulaanbaatar.

4 Government of Mongolia. 2007. EIA. Ulaanbaatar. 62

213. Among the other natural disasters that Mongolia is susceptible to, is the zud which is primarily the result of weather phenomena and one of the most devastating. Under zud conditions, livestock cannot graze and reach fodder and they die of starvation, often in their millions. The condition can be caused by a layer of ice formed after a warm thaw in winter, through a lack of snow in the waterless regions, through too much snow, or by the trampling and pugging of pasture in areas where there is too high a stock density.5

5.4.7 Climate and Air Quality

a. Climate

214. Mongolia has a severe climate with a low annual precipitation averaging 200–220 mm and ranging from 38.4 mm per year in the extreme south (Gobi desert region) to 389 mm per year in some areas in the north. Most precipitation occurs between June and August, and the driest months are usually from November to March. Droughts in spring and summer occur on average once in every five years in the Gobi region and once in every ten years over most other parts of the country. Mongolia has an average of 3,000 hours of sunshine annually, which is well above the amount received by other countries in the same latitude.

215. In establishing climatic conditions along the project road section, meteorological data from the nearest meteorological stations from 1995 to 2005 have been analysed. Data from meteorological stations in Olgii of Bayan-Olgii Aimag, and in Khovd, Munkhkhairkhan, Manhan, Must, and Bulgan of Khovd Aimag were used in this analysis.

216. Climate change. Since 1940, the average annual air temperature in Mongolia has increased by 1.9о С. Locally, the warming trend is slightly higher in the mountainous areas (2.0– 3.7оС) and lower in the Gobi desert and steppe areas (0.7–2.0оС).6

217. Due to this warming, surface evaporation has increased by 10% in last 40 years (10– 12% in forest-steppe and steppe areas and 7–9% in mountainous and desert areas), the duration of ice cover on rivers and lakes has shortened by 2 weeks, the thickness of ice on rivers and lakes has decreased, the number of days with stable snow cover has decreased, the stable snow cover has started to melt earlier than usual, and glaciers and permafrost have melted. The lengths of cold waves have shortened, while heat wave lengths have increased by 10–12 days in region of Mongol Altai Mountains. The date of soil melting in the spring has moved forward 3–6 days and the date of soil freezing has been delayed by 4–8 days.7

218. In 2003, a census of water bodies was taken. According to the census, there were a total of 5,097 rivers, 9,582 springs and 372 rivers of which 1,158 springs had dried up since the last count.

219. Air Temperature. The annual mean air temperature for the last 10 years ranges from 0.2oC to 1.3oC in this region (see Appendix II). Monthly absolute maximum and minimum temperature of air, observed at the meteorological stations along the road are shown in Appendix II. These figures show that July is the warmest month and January or February is the coldest month. During the last 10 years, the absolute maximum air temperature reached 39оС at

5 UNDP. 2008. Institutional Structures for Environmental Management in Mongolia. Ulaanbaatar and Wellington. 6 WWF. 2004. In Mongolia, Freshwater System of the Great Lakes Basin, Mongolia: Opportunities and Challenges in the Face of Climate Change. Ulaanbaatar. 63

Bulgan soum of Khovd Aimag in 2004 and the absolute minimum air temperature was -44оС at Manhan soum in 2005 (see Table 17).

Table 17: Meteorological Data along the Proposed Road Corridor Minimum Air maximum Air minimum temperature of soil temperature,оС temperature,оС о Province Soum surface, С

AMa AMi AMa AMi AMa AMi Bayan-Olgii Olgii 17 -43 36 -30 19 -38 Khovd 25 -44 38 -32 22 -43 Khovd Manhan 22 -47 38 -40 24 -44

Precipitation Average Maximum Maximum Average amount, mm number depth of wind number Province Soum of days snow speed, of days with Min Max cover, mm m/s with rain snow

Bayan-Olgii Olgii 55.6 196.6 10 24 18 61 Khovd 80 229.2 11 26 15 34 Khovd Manhan 60.8 169.2 16 22 11 28 Note: AMa-absolute maximum, AMi-absolute minimum, Min-minimum, Max-maximum. Source: Government of Mongolia. 2007. Feasibility Study EIA. Ulaanbaatar.

220. Precipitation and snow cover. As a consequence of the warming, occurrences of convective phenomena such as thunderstorms, flash floods, and heavy rains have been increasing. The annual distribution of precipitation is shown in Appendix II. The monthly maximum precipitation is commonly observed in August. The majority (85.0–94.5%) of annual precipitation falls between May and September. During the cold season, especially in the spring and fall, snowfalls of 5.0 mm per day or snowstorms can occur which may cause the roads to be closed.

221. The stable snow cover formation date varies from the middle of November to the beginning of December, with snow cover completely clearing up in March. Snow cover that forms during the rest of the year is short-lived and disappears due to late autumn warming and wind. The maximum snow cover depth at the observation sites was between 5 and 21 cm in the last ten years.

222. Table 19 shows that the number of days with snow is 9–18 and the number of days with rain is 21–64, meaning that that per month, 1–3 days have snow, while 4–12 days have rain.

223. Wind. The dominant wind direction is from the west and northwest, with maximum wind speed reaches up to 28 m/s in the project area (see Table 19). When wind speed reaches more than 12 m/s, dust storms, snowstorms, or other severe weather phenomena are generally observed. The number of days with strong wind (wind speed greater than 16 m/s) and dust/snow storms (wind speed greater than 12 m/s and visibility less than 1,000m) is seen from in Table 18. Such phenomena mainly occur during the transitional season, but during summer, dust storms occur prior to the convective phenomena listed above. 64

Table 18: Number of Days with Strong Wind and Snow, Dust Storms, 1995–2005

Aimag Soum Phenomena 1995 -2001 2002 2003 2004 2005 Total

st. wind 4 2 4 4 3 17 Khovd city s.& d. storm 3 2 1 1 7 Khovd st. wind 1 1 2 Manhan s.& d. storm 2 1 1 1 5 st. wind 4 5 13 15 11 48 Olgii city s.& d. storm 4 2 11 6 4 27 Bayan-Olgii st. wind 1 1 5 7 Tolbo s.& d. storm 2 1 1 4 Note: st. wind-strong wind, s. & d. storm – snow and dust storm. Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

224. Air pollution. The air quality and SO2 and NO2 concentrations are monitored at stations in each Aimag center. The monitoring data from 2003 to 2005 (Table 19) indicate that the air quality has met the national air quality standards (Table 20).

Table 19: Annual Mean of SO and NO , mg/M3 (2003-2005) 2 2 Bayan-Olgii Khovd Year Sulfur dioxide Nitrogen dioxide Sulfur dioxide Nitrogen dioxide SO2 NO2 SO2 NO2 2003 0.002 0.006 0.002 0.020 2004 0.001 0.006 0.002 0.028 2005 0.000 0.002 0.004 0.034 Source: Ministry of Nature Environment and Tourism, State of Environment 2003, 2005.

Table 20: National Air Quality Standards Concentration, mg/ m3 Category Dust SO2 CO NO2 24 hour mean 0.15 0.05 3.0 0.04 Maximum value 0.5 0.5 5.0 0.085 Source: Ministry of Nature, Environment and Tourism, State of Environment 2003, 2005.

225. The air quality at locations away from the towns is expected to be even better, but is affected by large quantities of dust generated by vehicles driving on earth tracks. The large increase in nitrogen dioxide levels from 2004 to 2005 may be due to increased numbers of vehicles in Khovd town.

5.4.8 Hydrology and Water Resources

226. The hydrological environment in Mongolia does not appear unfavourable overall. Mongolia is well endowed with surface and ground water resources. There are some 3,000 rivers in total with a combined length of 67,000 km. There are also over 3,000 large and small lakes, 6,900 springs, 190 glaciers and 250 mineral water springs.

227. The Great Lakes Depression is a large semi-arid depression in the West and Northwest of Mongolia bounded by the Altai, Khangai, and Tannu-Ola Mountains. It has an area over 100,000 km2 and the elevation is from 750 to 2,000 m. It contains six major Mongolian lakes Uvs Nuur, Khar-Us Nuur, Khyargas Nuur, Khar Nuur, Airag Nuur, and Dörgön Nuur, as well as a number of smaller ones. The major rivers are Khovd, Selenge, Kherlen, Zavkhan, and Tesiin. The Great Lakes Depression is also a major freshwater basin of Mongolia and contains some of the important wetlands of Central Asia comprising a system of interconnected shallow lakes with 65 wide reed belts within a generally desert steppe.

228. As Mongolia is considered a country with relatively poor water resources, water resources are one of its most valuable assets and they require protection and management. . According to estimates, the aggregate water resources in Mongolia amount to 599 km³ of which 500 km3 of water is contained in lakes, 62.9 km3 – in glaciers, and 34.6 km3 – in rivers and their underground basins.7

229. Water resources of the western part of Mongolia are represented by surface water (rivers, springs and lakes) and groundwater. The project area belongs to the Central Asian Non- Outflow River Basin. The most recent census of water bodies was conducted in 2003. Table 21 summarizes water resources for Khovd and Bayan-Olgii aimags.

Table 21: Number of Rivers, Springs, and Lakes in Khovd and Bayan-Olgii Aimags Name of Rivers Springs Mineral water Lakes Province Total Dried Total Dried Total Dried Total Dried Bayan-Olgii 293 17 736 42 13 1180 217 Khovd 214 7 468 10 9 201 4 Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

230. Water bodies located in the project area and surface water monitoring points are shown in Table 22 and Figure 21.

Table 22: Summary of Water Resources in the Project Area Khovd Bayan-Olgii Buraatin gol Tolbo nuur Shuragiin gol Khovd gol Hongio gol Buraat gol Shar nuur Khovd gol Buyant gol Note: “nuur” - lake, “gol” - river, “bulag” – spring. Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

231. The the first part of the proposed road alignment of the associated road section from Buraatyn Davaa to Olgii traverses along the Tolbo lake. Tolbo Lake is one of the largest freshwater lakes of Bayan-Olgii aimag. At an elevation of 2,049 m above sea level, it covers an area of 84.0 km². It is 21 km long, 7 km wide and 12.6 m deep. The coast is primarily ringed with hills. Its major tributaries are the Tolbo and Buraat rivers, which originate from Mongol-Altai Mountain and its only outlet is the Umnu River. The lake is generally frozen from the end of October to the beginning of May. It has fish and is a habitat of migratory birds.

5.4.9 Rivers

232. The description of the major rivers in the project area is given below:

 Khovd River. The length of the river is 516 km and its general width is 100–120 m. The river originates at south-east glacier of the Tavan Bogd, the highest peak of Mongol-Altai mountain, and the dominant source of river flow is melted ice and snow. Within the Khovd watershed area of 58,000 km2, the tributary rivers are the Tsagaan, Sogoot, Sagsai, and further downstream the Buyant River. The main

7 Government of Mongolia. 2007. EIA. Ulaanbaatar. 66

lakes, which discharge their excess water into Khovd River are the Tolbo, Dayan, and Achit. The waters of the Khovd River finally flow through lakes Khar-Us and Dalai and the connecting Chonokharaikh River into the Khar Lake. The annual mean discharge of the river is 60.1 m3/s in its upper reach (at Olgii), 63m3/s in the middle reach (at Bayannuur), and 90m3/s at its inflow into the Khar-Us Lake (at Miyangad). The absolute maximum discharge was 284 m3/s on 5 May 2002 and absolute minimum discharge -14.2 m3/s on 25 May 1983 (at Olgii). The water level reached 6 m in 1993 at Bayannuur post.

 Buyant River. The length of the river is 171 km. Originating in the Mongol-Altai Mountains and Huh Serkhiyn Mountain, this body of water runs through the northern part of the Khovd town. It is a tributary of the Khovd River, which flows into the Khar Us Lake. If the discharge of the river is less than 6 m3/s, the river’s waters will not reach Khovd River. The annual mean discharge of the river is 5.9m3/s in its down stream (at Khovd town).

Figure 21: Surface Hydrology of the Project Area and Monitoring Stations

Source: Government of Mongolia. 2007. EIA. Ulaanbaatar. 67

233. Seasonal flooding. The rivers in the project area flow from the Mongol Altai Mountains. Spring floods in these rivers generally start in the middle of April, with peak flow occurring in late June and continuing for 110–150 days. The spring flood flow is 60–90 precent of total annual flow of Altai Mountain Rivers. The summer becomes an overfull period because rainfall runoff combines with the spring flood of Mongol Altai Mountain Rivers. Regardless, the main source of water remains water from melting snow and glaciers. Table 23 presents the maximum/minimum and average flow rates for major rivers in the project area.

Table 23: Flow rates of Rivers in Project Area 2001 2002 2003 2004 2005

Avg Max Min Avg Max Min Avg Max Min Avg Max Min Avg Max Min

Khovd- 66.4 260 7.1 56.4 284 5 49.9 204 5 43.5 143 5.1 53.2 249 3.4 Olgii

Buyant- 6.56 25.2 1.9 5.1 19.7 0 6.27 18.4 0 5.1 17.5 0 6.69 2.7 0 Olgii Avg – Average; Max – Maximum; Min – Minimum Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

5.4.10 Groundwater

234. The groundwater of the region accumulates in rocks with different ages, and can be classified as granular and fissure. Granular groundwater accumulates in the non-cemented sedimentary rocks and fissure groundwater accumulates in sedimentary, igneous and metamorphic rocks with different ages.

235. Granular groundwater in the Neocene and Paleocene rocks is mainly confined and hydraulic pressure is relatively high, but fissure groundwater is mainly phreatic and is caused by the clastic rocks with different age.

236. The groundwater resource distribution is uneven. Moving from north to south, groundwater resources become more sporadic and mineralization increases. This is primarily due to the climactic changes, including the reduction of precipitation, and increase in air temperature and evaporation in the south. Precipitation, condensation, and tectonic faults all play very important roles in recharging groundwater in the region.

5.4.11 Water Quality Monitoring

237. The water quality of all the rivers and lakes of the project area was assessed as “very clean” and “clean” as reported by the Environmental Laboratory, NAMHEM in 20058. Table 18 shows water quality in the project area. An expert from the Environmental Laboratory said that water quality in this region is very stable and does not change much. The sole exception was one year when the concentration of ammonium in the Buyant River at the monitoring post in Khovd temporarily exceeded the maximum acceptable concentration.

238. In Khovd and Bayan-Olgii aimags, water quality monitoring is being conducted at 14 posts located at 9 rivers and 1 lake. Of these, Khovd and Buyant, are located in or close to the project area. Appendix II demonstrates the chemical composition and quality of water in these

8 Government of Mongolia. 2007. EIA. Mongolia. 68 bodies over the last 5 years.

239. The water quality of water bodies is presented in Table 24 below. The parameters 2+ 2+ + + 3- 2- - monitored include: pH, Ca ,Mg , Na , K , HCO , SO4 , CI , dissolved gases – CO2, O2, biological/chemical oxygen demand, permanganate value, biogenic elements NH4-N, NO2-N, -6+ NO3-N, PO4-P, and toxic elements Fe, F, Mn, Cr ,Cu, and Mo.

Table 24: Water Quality of Water Bodies in Project Area in 2005 No. River/Lake (monitoring post) Pollution index Water quality Level Class 1 Khovd River (Olgi)i 0.15 I Very clean 2 Khovd River (Bayannuur) 0.23 I Very clean 3 Khovd River (Miyangad) 0.30 I Very clean 4 Buyant River (Sagsai) 0.20 I Very clean 5 Buyant River (Deluun) 0.43 II Clean 6 Buyant River (Khovd) 0.66 II Clean Source: Government of Mongolia. 2000. EIA. Ulaanbaatar.

240. Tables 25, 26 and 27 present the Mongolian standards for ambient water quality, and wastewater discharged into water bodies and soil, respectively. In general, current water quality is very clean as shown in Table 25.

Table 25: Selected Ambient Water Quality Standards and Current Situation (2006) Acceptable Contents Unit concentration Olgii Khovd 1 pH 6.5-8.5 7.46 8.08 2 Dissolved O2 mgO/l More than 6.4 9.90 3 Biochemical oxygen mgO/l 3 2.60 demand 4 Chemical oxygen demand- mgO/l 10 1.40 2.10 Mn 5 Ammonium NH4 -N mgN/l 0.5 0.04 0.07 6 Nitrite NO2 -N mgN/l 0.02 0.01 0.02 7 Nitrate NO3 -N mgN/l 9.0 0.43 0.15 8 Phosphorus – PO4-P mgP/l 0.1 0.01 0.02 9 Sulfur oxide SO4 mg/l 100 9.80 21.50 Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

Table 26: Discharge Water Quality Standard (To Water) Unit Acceptable concentration 1 Water temperature oC 20 2 pH - 6-9 3 Biochemical oxygen demand (BOD) mgO/l 20 4 Chemical oxygen demand (COD) mgO/l 50 5 Mn-O mgO/l 20 6 Substance could be weighted mg/l 35 7 Dissolved sodium mg/l 800 8 Cyanide mg/l 0.05 9 Phenol mg/l 0.05 10 Mineral Oil mg/l 1 11 Fat mg/l 5 12 Sulphide mg/l 0.2 13 Copper mg/l 0.3 14 Cadmium mg/l 0.03 15 Manganese mg/l 0.5 16 Mercury mg/l 0.001 17 Arcenic mg/l 0.05 18 Nickel mg/l 0.2 69

Unit Acceptable concentration 19 Selenium mg/l 0.02 20 Iron mg/l 1 21 Plumb mg/l 0.1 22 Total Chromium mg/l 0.3 23 Chromium 6 mg/l 0.05 24 Zinc mg/l 1 25 Ammonium mgN/l 8 26 Total Nitrogen mg/l 20 2.51 21 27 Total phosphor mg/l 1.5 0.31 28 Remained chloride mg/l 1.5 29 3 chlorine ethylene mg/l 0.2 30 4 chlorine ethylene mg/l 0.1 31 Phosphor organic compound mg/l 0.2 Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

Table 27: Discharge Water Quality Standards (Water Into Soil) Compositions Unit 1 Water temperature oC 25 2 Smell - Without unpleasant smell 3 pH 6-9 4 Biochemical oxygen demand mgO/l 50 5 Chemical oxygen demand mgO/l 100 6 Mn-O mgO/l 30 7 Substance could be weighted mg/l 150 8 Dissolved sodium mg/l 1000 9 Cyanide mg/l 0.2 10 Mineral Oil mg/l 3 11 Fat mg/l 10 12 Sulphide mg/l 0.5 13 Copper mg/l 0.5 14 Cadmium mg/l 0.05 15 Manganese mg/l 1 16 Mercury mg/l 0.001 17 Arcenic mg/l 0.1 18 Nickel mg/l 0.5 19 Selenium mg/l 0.02 20 Iron mg/l 2 21 Plumb mg/l 0.5 22 Total Chromium mg/l 0.5 23 Chromium 6 mg/l 0.1 24 Zinc mg/l 2 25 Ammonium mgN/l 15 26 Total Nitrogen mg/l 30 27 Total phosphor mg/l 5 28 Pathogen and other bacteria - Not detected Source: National Center of Standardization and Metrology.

241. Potable Water. Tables 28, 29, and 30 provide standards on potable water, namely characteristics, and the chemical composition of potable water. These standards are used to monitor the quality of drinking water in wells and springs, in particular if they can be affected by construction activities.

Table 28: Characteristics of Potable Water Characteristics Unit Acceptable level 1 Taste Score 2.0 2 Smell Score 2.0 3 Color Gradius 20.0 4 Turbidity Mg/l 1.5 70

Note: When color and turbidity is less than 1500mg/l and hardness is less than 10mg.eq/l, water could be used for a certain period, based on hygiene and sanitary assessment of authorized organization. Source: National Center of Standardization and Metrology.

Table 29: Chemical Composition of Potable Water Composition Unit Acceptable concentration 1 Molybdenum (Mo) mg/l 0.07 2 Barium (Ba) mg/l 0.7 3 Boron (B) mg/l 0.5 4 Copper (Cu) mg/l 1.0 5 Calcium ion (Ca2+) mg/l 100.0 6 Magnesium ion (Mg2+) mg/l 30.0 7 Manganese (Mn) mg/l 0.1 8 Sodium (Na) mg/l 200.0 2+ 9 Phosphate ion (PO4 ) mg/l 3.5 10 Flourine (F) mg/l 0.7-1.5 11 pH - 6.5-8.5 12 Selenium (Se) mg/l 0.01 13 Strontium (Sr) mg/l 2.0 2+ 14 Sulphate oxide ion SO4 mg/l 500.0 15 Hardness mg.eq/l 7.0 16 Chlorine ion (Cl-) mg/l 350.0 17 Arsenic (As) mg/l 0.01 18 Hydrogen Sulfide (H2S) mg/l 0.1 19 Chromium (Cr) mg/l 0.05 20 Dehydrated remaining mg/l 1000.0 21 Uranium (U) mg/l 0.015 Source: National Center of Standardization and Metrology.

Table 30: Chemical Compositions of Potable Water Contaminated by Households and Industries Compositions Unit Acceptable concentration Non organic substances 1 Beryllium (Be) mg/l 0.0002 2 Cadmium (Cd) mg/l 0.003 3 Mercury (Hg) mg/l 0.0005 4 Cyanide (CN) mg/l 0.01 Organic substances 5 Benzene C6H6 mg/l 0.01 6 Xylene mg/l 0.5 7 Acetic acid mg/l 0.2 8 Methylene chloride CH2CL2 mg/l 0.02 9 2 chloride ethane mg/l 0.03 10 3 chloride ethane mg/l 0.07 11 4 chloride ethane mg/l 0.04 12 Phenol derivatives mg/l 0.002 13 Styrene mg/l 0.02 14 Toluene mg/l 0.7 15 Ethyl benzene mg/l 0.3 Source: National Center of Standardization and Metrology.

5.5 Ecological Resources

242. Mongolia's geographical position, size and topography have resulted in a range of ecological conditions and a unique assemblage of ecosystems. The country ranges from the super-arid deserts in the south to the comparatively moist taiga forests in the north and the wetlands of the Great Lakes Depression; from the rolling steppe grasslands in the east to the alpine terrain and glaciated peaks in the west. This varied terrain contains a wide array of ecotypes, many exhibiting unique characteristics found nowhere else on the globe. This unique, 71 varied, and substantially undisturbed territory supports a wide diversity of living organisms, many of which are endemic to Mongolia. Each is valuable in its own right and for its contribution to the Mongolian way of life and the well-being of its citizens. Each is considered vulnerable and each merits protection and management.

243. Mongolia's fauna represents a mixture of species from the northern taiga of Siberia, the steppe, and the deserts of Central Asia. Fauna include 136 species of mammals, 436 birds, eight amphibians, 22 reptiles, 75 fish, and numerous invertebrates. Mongolia harbours some of the last remaining populations of a number of animal species and sub-species internationally recognized as threatened or endangered. These include the snow leopard, Argali sheep, wild ass, saiga antelope, ibex, Bactrian camel, rock ptarmigan, Altai snowcock, Gobi bear, musk deer, Przewalski's horse, Mongolian jerboa and white-naped crane.

244. Mongolia's diverse and distinctive vegetation includes an important part of Asia's plant life. More than 3,000 species of vascular plants, 927 lichens, 437 mosses, 875 fungi, and numerous algae have been recorded. Many other species, however, remain to be classified. Of those that have been classified, almost 150 are considered endemic and nearly 100 are relict species; and from another perspective, there are 845 species of medicinal plants, 68 species of soil-binding plants, and 120 species of important food plants. There are also over 100 plant species that are listed in the Mongolian Red Book as rare or endangered and these include the dwarf Siberian pine and the white gentian.

245. Ecological resources in the project area including flora, fauna and protected areas are presented below.

5.5.1 Flora

246. Latitudinal and altitudinal belts of vegetation are the most obvious feature of the Mongolian landscape. The project area of Bayan-Olgii and Khovd aimags comprises high mountain, mountain steppe, dry steppe, desert-steppe, stepped desert, grasses – undershrub desert, undrshrub and shrub desert, and hammad vegetation. Table 31 and Figure 21 present dominant flora species growing in the project area.

247. Some 86 species of plants listed in the Mongolian Red Book can be found in Khovd Aimag. Among these are Red Goyo, Saussurea Involucrate, and Shining Water Lily. Rare plant species growing in Khovd and Bayan-Olgii Aimags as shown in Table 32 are listed in Mongolian Red Book. Field surveys and consultations with experts result in the conclusion that no Red Book species are located within the ROW.9

Table 31: List of Dominant Plants in the Project Area Vegetation Zone Zone Names Dominance in Figure 18 Cerastium lithospermifolium, Dryadanthe tetrandra, Parrya exscapa, 2 High mountain Kobresia belardii, Carex melanatha, Carex orbicularis Festuca lenensis, Oxytropis oligantha, Potentilla nivea, Stellaria pulvinata, 3 Artemisia argyrophylla, Kobresia filifolia Festuca lenensis, Helictotrichon desertorum, Festuca valesiaca, Poa 10 Mountain steppe attenuate, Silene repens, Arenaria capillaries, Onosma arenaria, Spiraea hypericifoloa, Agropyron cristatum, Carex pedifopmis, Galium verum Festuca lenensis, Agropyron cristatum, Krylovia eremophylla, Peucedanum 14 Dry steppe histrix, Allium edaurdii, Potentilla sericea

9 Government of Mongolia. 2007. EIA. Ulaanbaatar. 72

Caragana bundei, Caragana pugmaea, Stipa krylovii, S.kirghisorum, Festuca 16 valesiaca, Agropyron cristatum, Artemicia dolosa, Melandrium viscosum, Saussuea pricei Stipa gobica, Agropyron nevskii, Agropyron cristatum, Artemisia frigida, 18 Arenaria capillaries, Caragana leucophloea, Eurotia ceratoides Desert steppe Stipa glareosa, S.sibirica, Agropyron cristatum, Cleistogenes squarrosa, 21 Allium equardii, Artemisia rutifolia, Caragana bundei, Lophanthus chinensis Stipa glareosa, Caragana bundei, Euratia certoides, Anabasis brevifolia, 24 Stepped desert Artemisia xerophytica, Agropyron nevskii Nanophyton grubovii, Eurotia ceratoides, Stipa glareosa, Artemisia 26 Grasses – gracilescens, Reamurea songorica undershrub Anabasis brevifolia, Stipa glareosa, Arthemisia xerophytica, A.hanthochroa, 27 desert Ajania fruticosa, Zygophyllum pterocarpum, Ephedra sinica Euratia certoides, Reamurea songorica, Haloxylon ammodendron, Artemisia 29 Undershrub and terrae-albae, Anabasis salsa, A. truncata shrub desert Haloxylon ammodendron, Anabasis brevifolia, Zygophyllum xanthoxylon, 30 Reamurea songorica, Achnathuerum splendens, Leymus, Iris lacteal, Carex enervis, Kalidium 34 Hamad foliatum, Reamurea songorica, Phragmites communis, Tamarix ramosissima, Haloxylon ammodendron, Popolus diversifolia Source: Government of Mongolia. 2007. EIA. Ulaanbaatar. 73

Figure 21: Flora in the Project Area

.

Source: Adminsitration of Land Affairs Geodesy and Cartography. 2004. Geographic Atlas of Mongolia. Ulaanbaatar.

74

Table 32: List of Rare Species of Plants in Khovd and Bayan-Olgii Aimags English name Mongolian name Latin name Hovd Bayan-Olgii 1 Juniper Хуурмач хонин Арц Juniperus pseudosabina + Pseudosabina 2 Sabina Juniper Хонин Арц Juniperus Sabina + + 3 Forked Stitchwort Ацан ажигана Stellaria dichotoma L + 4 Least water lily Дєрвєлжин бєлбєє Nymphaea tetagona + 5 Pink peony Ягаан цээнэ Paeonia anamala L + 6 March Saxifrage Ямаан сэрдэг Saxifraga hirculus L + 7 Roseroot Алтан гагнуур Rhodiola rosea L + + 8 Mongolian Milk-Vetch Монгол ортууз Oxytropis mongolica + + 9 Mongolian Caryoperis Монгол догар Caryopteris mongolica + + 10 Saussurea involucrate Нємрєгт банздоо Saussurea involucrate + + 11 Wild onion Алтайн сонгино Allium altaicum + + 12 Tulipa uniflora Ганц цэцэгт алтанзул Tulipa uniflora + 13 Shining water lily Цавцагаан бєлбєє Nymphea candida C. Presl + 14 Gueldenstaedtia monophylla Ганц навчит Сальжир Gueldenstaedtia monophylla + 15 Prickly Milk-Vetch Шивїїрт ортууз Oxytropis acanthacea + 16 Fragile-leaved Milk-Vetch Хэврэгнавчит Ортууз Oxytropis fragilifolia + 17 Red goyo Улаан гоёо Cynomorium songaricum + 18 Halodendron salt tree Хонхот харгана Halimodendron halodendr + 19 Tsengel’s Hedysarum Цэнгэлийн шимэрс Hedysarum sangilanse + + 20 Squamarina pamirica Памирын тэвгэнэ Squamarina pamirica + 21 Ferula ferulacoides Залаархаг хавраг Ferula ferulacoides + Source: Government of Mongolia. 2007. EIA. Ulaanbaatar, 248. Forest. The forest area in Bayan-Olgii comprises 44,700 ha (or 1.0% of the total territory of the Aimag). The major forest species is lurch (30,000 ha or 67.8%). Most of the other species are shrubs. The forest is located in the west and northwest of Bayan-Olgii Aimag and the proposed road alignment will be at least 100 km away from the forest area. The total forest area of Khovd Aimag is 464,851 ha, of which 199,179.5 ha is forest trees, 37 ha is tree nursery, 13,401.5 ha is a logging area, and 25,138 ha is other forest area. The project road alignment would not pass through the forest area.

249. As the alignment crosses a number of altitudinal belts, flora varies substantially within the project area. The vegetation types in the project area are desert steppe, stepped desert and grass – undershrub desert flora while the flora includes Stipa glareosa, Caragana bungei, Eurotia ceratoides, Anabasis brevifolia, Artemisia xerophytica, Agropyron nevski, Artemisia hanthochroa, Zygophyllum pterocarpum, Ephedra sinica, Stipa sibirica, Agropyron cristatum, Cleistogenes squarrosa, Allium eduardii, Artemisia rutifolia, Lophanthus chinensis.10

10 Administration of Land Affairs, Geodesy and Cartography. 2004. Geographic Atlas of Mongolia. Ulaanbaatar. 75

5.5.2 Fauna

250. The project area is entirely located within the Altai–Sayan Eco-region. The region is characterized by rich fauna biodiversity ranging from mountain tundra of Mongolian Altai to Gobi Desert: there are 360 species of vertebrates, including 90 species of mammals, more than 250 species of birds, 11 species of reptiles, 8 species of fishes, and 1 species of amphibian.11

Figure 23: Location of the Altai-Sayan Ecosystem

Source: WWF.

251. Mammals. The Mongolian Altai - Sayan contains rare and endangered mammals such as Snow Leopard (Uncia uncia), Wild Sheep (Ovis ammon) or Argal, Siberian Ibex (Capra sibirica), Mongolian Saiga (Saiga tatarica mongolica), Musk Deer (Moschus moschiferus) Pallas’ cat (Felis manul) or Manul, Black Tailed Gazelle (Gazelle subgutturosa), Wild Boar (Sus scrofa nigipes), Stone Martin (Martes foina), Marbeled Polecat (Vormela peregusna), Elk (Cervus elaphus) or Red Deer. It is also a habitat for steppe and semi-desert fauna such as wolves, foxes, martens, weasels, marmots, corsac foxes, manul cats, and marbled polecat. There are 44 species of small mammals, including mice, squirrels, hamsters, voles, shrews, jerboas, rabbits, and badgers, that are distributed throughout the area and depend on the habitat. The Asiatic wild ass is found in the southern Bulgan and Uyench soum areas.

11 WWF. 2001. Altai-Sayan Ecoregion: Ecoregion Climate Change Biodiversity Decline. 76

Figure 24: Mammals in the Project Area

Source: Adminsitration of Land Affairs Geodesy and Cartography. 2004. Geographic Atlas of Mongolia. Ulaanbaatar.

252. Amphibia and Reptiles. Four families and six species of reptiles including Toad-headed Agama (Phrynocephalus versicolor), Mongolian Agama (Laudakia stoliczkana), Multi-cellated Racerunner (Eremias multiocellata), Gobi Racerunner (Eremias przewalskii), Pallas’s Coluber (Elephe dione), and Central Asian Viper (Aqkistrodon halys) has been reported from the Mongolian Altai - Sayan the area. In 1987, sand lizards (Lacerta agilis) were first discovered in Bayangol of the Altai Mountain range in Khovd Aimag, enriching the taxonomy of reptiles in Mongolia.12

253. Birds. There are 258 bird species found in the western region. The majority of these birds are migratory and few are local inhabitants. There are a number of rare and endangered species of birds, including Snowcock (Tetraogallus altaicus) or Altain ular, Cenereous Vulture (Aegypius monachus), Golden Eagle (Aquila chrysaetos), Lammergeyer (Gypaetus barbatus), Spoonbills (Platalea Leucorodia), Dalmatian Pelican (Pelecanus crispus), Great White Egrets

12 Government of Mongolia 2007. EIA. Ulaanbaatar. 77

(Egretta alba), Whooper Swans (Cygnus cygnus), Greet Blackheaded Gulls (Larus ichthyatus), Black Storks (Ciconia nigra) and Swan Goose (Anser cygnoides). The only important bird area (IBA) close the project area is Tolbo Lake. The Tolbo Laka IBA though outside the project area will be assessed in this EIA as it may be affected by an associated project component.

254. Fish. A recent International Bank for Reconstruction and Development (IBRD)/World Bank (WB) report states that a total of 76 native fish species are reliably recorded in Mongolia’s waters. Of them, 5 species are new to science and unnamed.13 The project area largely belongs to Great Lakes watershed that is an aggregation of a number of closed inland depressions. Some 10 fish species are reported to inhabit the water bodies and courses of the watershed including endemic genus Oreoleuciscus (O.potanini, O.humilis, O.angusticephalus, O.dsapchynensis,14 Mongolian grayling (Thymallus brevirostris), Siberian grayling (Thymallus arcticus), and Stone loach (Barbatula toni).15

255. Insects. This region is distinguished with the richest diversity of insect species. The dominant species are steppe and semi-dessert insects of Orthoptera and Coleoptera orders. There are also 123 species of 7 orders of insects in the rivers and marshlands. For instance, 5 species of Odonata order, 9 species of Plecoptera order, 18 species of Orthoptera order, 9 species of Heteroptera order, 66 species of Coleoptera order, 9 species of Lepidoptera order (butterfly), and 7 species of Trichoptera order.15

256. Rare and Endangered Species. The Mongolian Red Book (1997) lists 30 species of mammals, 30 species of birds, 5 species of reptiles, 4 species of amphibians, 6 species of fish, 19 insects, 2 crustaceans, and 4 mollusk species as endangered, vulnerable, or rare. The Mongolian Law on Fauna lists 12 mammals, 8 birds, 4 species of fish, and 1 species of insects as very rare (endangered), and 11 mammals, 21 birds, and 2 species of fish as rare. Additionally, 14 mammals, 71 birds, 8 plants, 2 species of fish, 1 species of insects, and 1 species of reptiles are included on Appendices I and II of the Convention on the International Trade of Endangered Species (CITES). Some endangered and rare species habitats are included in the Protected Area system.

257. Rare and Endangered Species in Mongolian Altai-Sayan include such species as Snow Leopard (Uncia uncia), Wild sheep (Ovis ammon) or Argal, Siberian Ibex (Capra sibirica), Mongolian Saiga (Saiga tatarica mongolica), Musk Deer (Moschus moschiferus) Pallas’ Cat (Felis manul) or Manul, Black Tailed Gazelle (Gazelle subgutturosa), Wild Boar (Sus scrofa nigipes), Stone Martin (Martes foina), Marbled Polecat (Vormela peregusna), Elk (Cervus elaphus) or Red Deer, Snowcock (Tetraogallus altaicus) or Altain ular, Cenereous Vulture (Aegypius monachus), Golden Eagle (Aquila chrysaetos), Lammergeyer (Gypaetus barbatus), Spoonbills (Platalea Leucorodia), Dalmatian Pelican (Pelecanus crispus), Great White Egrets (Egretta alba), Whooper Swans (Cygnus cygnus), Great Blackheaded Gulls (Larus ichthyatus), Black Storks (Ciconia nigra) and Swan Goose (Anser cygnoides).

258. The following rare and endangered mammals are reported from Bayan-Olgii and Khovd Aimag (Table 33).

13 Government of Mongolia. 2007. EIA. Ulaanbaatar. 14 Ibid. 15 Ibid. 78

Table 33: Rare and Endangered Species of Mammals in Khovd and Bayan-Olgii Aimags Potential occurrence in English name Mongolian name Latin name the Project Area 1 Asiatic Wild Dog* Чоно, цєєвєр Cuan alpinus Bodonch Canyon in Bodonch Canyon, near Tsambagarav Nature 2 Snow leopard* Ирвэс Uncia Uncia Reserve, Shine Pass, Siilkham National Park Southern part of Bulagan 3 Asiatic Wild Ass Хулан Equus hemionus soum 4 Wild Boar Зэгсний гахай Sus scrofa nigripes Khar Us Nuur Manhan Nature Reserve, Saiga Соргог бєхєн Saiga tatarica tatarica Khar Us Nuur National Park Mongolian saiga Near Khar-Us Nuur and 5 Монгол бєхєн Saiga tatarica mongolica antelope* Manhan Nature Reserve 6 Goitered Gazelle Хар сїїлт зээр Gazella subgutturosa Manhan Nature Reserve 7 Wild mountain sheep Алтайн аргаль Ovis ammon Nearby Bodonch river in Bodonch canyon, near Tsambagarav Nature 8 Ibex Янгир Capra Ibex siberica Reserve, Shine Pass, Siilkham National Park 9 Beaver* Тєв азийн минж Castor fiber birulai Bulgan river Таван хуруут Khar Us Nuur National 10 Satunin’s Jerbao Cardiocranius paradoxus атигдаахай Park Thick-tailed Pygmy Khar Us Nuur National 11 Єєхлєг атигдаахай Salpingotus crassicauda Jerboa Park Note: *-are included on Appendices I and II of the Convention on the International Trade of Endangered Species (CITES). Source: EIA 2007.

259. Table 34 presents birds that can be observed in Khovd and Bayan-Olgii Aimags and included in Mongolian Red Book.

Table 34: List of Rare and Endangered Species of Local and Migrant Birds in Khovd and Bayan-Olgii Aimags Bayan- English name Mongolian name Latin name Hovd Olgii 1 Dalmatian Pelican Борцгор хотон Pelecanus crispus + 2 Great white Egret Цасч дэглий Egretta alba + 3 Eurasian Spoonbill Халбаган хошуут Platalea leucorodia + + 4 Black stork Хар єрєвтас Cionia nigra + + 5 Whopper Swan Гангар галуу Cygnus Cygnus + + 6 Bar-headed Goose Хээрийн галуу Eulabeia indica + + 7 Swan Goose Хушуу галуу Cygnopsis cygnoides + + 8 Osprey Явлаг сар Pandion haliaeus + 9 White tailed Sea Eagle Усны цагаан сїїлт Haliaeetus albicilla + + бїргэд 10 Altai snowcock Алтайн хойлог Tetraogallus altaicus + + 11 Ring necked Pheasant Гургуул Phasianus colchicus + + 12 Japanese White napped Цэн тогоруу Grus vipio + crane 13 Houbara Bustard Жороо тоодгой Chlamydotis undulate + 14 Great Black-headed Gull Итэлгэн цахлай Larus ichthyaetus + + 15 Hodgson’a bushchat Єгєєлэй шулганаа Saxicola insignis + + 16 Euroasian pinduline Tit Уран шувуу Remiz pendulinus + 17 Henderson’s Ground Jay Хулан жороо Podoces hendersoni + Source: Mongolian Red Book. 1997. 79

260. Within the project area there are no habitats where rare or very rare species of mammals, birds and reptiles have been reported. However, the possibility of wildlife crossing the road section at some locations is indicated.

261. Hunting. The maximum limits for wild animals hunting for domestic purpose are shown in Table 35. These limits are regulated through the issuance of licenses.

Table 35: Maximum Limits of Hunting Wild Animals for Domestic Purposes for 2006 Aimag White- Fish Wild pig Roebuck Birds of marsh, forest, Fox and tailed steppe & waterfowl steppe fox gazelle Bayan-Olgii - 4,500 - - 500 200 Khovd - 10,000 - - 120 - Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

5.5.3 Specially Protected Natural Areas

262. As mentioned earlier, the project area is entirely located within Altai Sayan Eco-Region that is included in World Wide Fund for Nature’s (WWF) “Global 200” list of virgin or little changed eco-regions in the world, where more than 90% of the planet’s biodiversity is concentrated. It occupies nearly 1,065,000 km2, of which about 29% is located in Mongolia as shown in Figure 23. Since 1998, WWF has been implementing a project for long-term conservation of biodiversity in the eco-region. The establishment of an “ecological network” of protected areas was one of the main tasks of this project.

263. Mongolian Law on Specially Protected Areas (1994) distinguishes four types of specially protected areas:

 Strictly Protected Areas (including pristine zones, conservation zones and limited use zones);  National Conservation Parks (including special zones, travel and tourism zones, and limited use zones);  Nature Reserves (divided into ecological reserves for the purpose of preserving unique virgin ecosystems, biological reserves for the purpose of conserving rare and endangered plants and animals, paleontological reserves for the purpose of preserving in a natural state the remains of ancient animals and plants, and geological reserves – for the purpose of preserving in a natural state the land’s unique formations, signs, and structures); and  Monuments (divided into natural monuments and historical and cultural monuments).

264. National Conservation Parks consist of those areas taken under special protection whose natural original condition is relatively preserved and which have historical, cultural, scientific, educational and ecological importance. Construction activities are not permitted in special, and travel and tourism zones of national parks, however allowed in limited use zones.

265. Nature Reserves consist of areas taken under state special protection in order to create conditions for the conservation, preservation, and restoration of certain natural features, natural resource and wealth. Any activities for industrial purposes that change the natural original 80 condition and likely to have adverse environmental impacts are prohibited.

266. Ramsar Sites. The Ramsar Convention or Convention on Wetlands (its full name is the Convention on Wetlands of International Importance especially as Waterfowl Habitat) defines wetlands as "areas of marsh, fen, peatland or water, whether natural or artificial, permanent or temporary, with water that is static or flowing, fresh, brackish or salt, including areas of marine water the depth of which at low tide does not exceed six meters". Currently there are 11 wetlands in Mongolia included in the Ramsar list. One of them, Khar-Us Lake National Park, is located within Western Regional Road Corridor (phase I project area, see Figure 25) but outside of the project area.

267. Important Bird Areas (IBA) and Endemic Bird Areas (EBA). Important Bird Areas (IBAs) constitute key sites for conservation identified by IBA Program of BirdLife International. Often IBAs are already part of a protected-area network, but sometimes they are not protected officially. Endemic Bird Areas of BirdLife International are places where unique biodiversity is concentrated. IBAs located in Khar-Us Nuur National Park and Tolbo Lake are not covered by the Law on Specially Protected Areas. Endemic Bird Area in Mongolia (Mongolian mountains) is classified as the secondary area, i.e. it supports one or more restricted-range bird species. This area is defined by the range of Mongolian Accentor Prunella koslowi, a poorly known species which breeds in juniper scrub and grassland on dry mountain slopes (at approximately 2,000 m) in Mongolia.

268. The road alignment of the associated project component from Buraatyn Davav to Olgii passes along Tolbo Lake at a distance only of 300–400 km. Tolbo Lake is considered as an important bird area (IBA).

Figure 25: Location of Khar-Us Lake National Park andTolbo Lake Bird Area

Project Road TolboTolbo Lake Lake

Khar-Us LakeKhar-Us National Lake National Park Park

Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

269. There are a number of protected areas in Bayan-Olgii and Khovd aimags. They include strictly protected area Khokh Serkhiin Nuruu, national parks: Siilkhemiin Nuruu, Altai Tavan Bogd, Tsambagarav Uul, and Khar Us Lake, and nature reserves: Develiin Aral, Manhan, and Bulgan River. The only protected area close to the project area is the Tsambagarav National 81

Park which is located 11 km away from the road alignment as shown in Figure 26 below.

270. Tsambagarav National Park. Tsambagarav National Park is located at the border of Bayan-Olgii and Khovd aimags. The protected area was established in 2000 with to protect the natural environment of the area that has historical, cultural, scientific, educational and ecological importance, and to develop tourism. The total area of the park is 111,500 hectares, but presently does not have any internal zoning. The snowcapped mountains are a rich source of surface and ground water; there are more than 200 springs, 4 rivers, and a number of mineral springs took their rise in the mountains. The park is inhabited with rare and endangered species of flora such as roseroot, wild onion, and fauna such as wild mountain sheep, ibex, snow leopard, and Altai snowcock. The Project road passes 11 km away from the National Park as shown Figure 26.

Figure 26: Location of Tsambagarav National Park and Road Alignment

Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

5.6 Economic Development

5.6.1 Structure of Economy

271. Khovd Aimag. The gross domestic product (GDP) of Khovd Aimag amounted to 44,033.6 million tugrug (476,500 tugrug per capita) in 2005 as shown in Table 36. The most important sectors were agriculture, hunting and forestry (76.0%), transport and communication (5.1%), and education (5.1%). Table 36: Gross Domestic Product of Khovd Aimag in 2005 Item GDP, mln. tug % Agriculture, hunting and forestry 33,460.7 76.0 Mining and quarrying 1.5 0.0 Manufacturing -7.2 0.0 Electricity, gas & water supply 1,361.5 3.1 Construction 1,795.0 4.1 Wholesale & retail trade; repair of motor vehicle, motorcycle & personal & 345.0 0.8 HH goods 82

Hotels & restaurants 212.2 0.5 Transport & communication 2,250.0 5.1 Financial intermediation. 940.1 2.1 Real estate, renting & other business activities 131.7 0.3 Public administration & defense; compulsory social security 1,288.3 2.9 Education 2,260.8 5.1 Health & social work 888.3 2.0 Other community, social & personal service activities 49.8 0.1 FISIM -944.1 -2.1 GDP 44,033.6 100 Source: Statistical Division of Bayan-Olgii Aimag.

272. Bayan-Olgii Aimag. The gross domestic product (GDP) of Bayan-Olgii Aimag amounted to 36,000 million tugrug (375,000 tugrug per capita) in 2005 as shown in Table 37. The most important sectors were agriculture, hunting and forestry (71.7%), education (6.5%), financial intermediation (5.8%), and trade (4.5%). Table 37: Gross Domestic Product of Bayan-Olgii Aimag Item GDP, mil. Tug % Agriculture, hunting and forestry 24,588.0 71.7 Mining and quarrying 180.0 0.6 Manufacturing 288.0 1.3 Electricity, gas & water supply 432.0 0.7 Construction 288.0 0.4 Wholesale & retail trade; repair of motor vehicle, motorcycle & 2,448.0 4.5 personal & HH goods Hotels & restaurants 216.0 0.2 Transport & communication 2,952.0 1.7 Financial intermediation. 576.0 5.8 Real estate, renting & other business activities 144.0 0.5 Public administration & defense; compulsory social security 1,188.0 2.8 Education 2,664.0 6.5 Health & social work 1,152.0 2.7 Other community, social & personal service activities 180.0 0.6 FISIM -1,296.0 0.0 GDP 36,000.0 100 Source: Statistical Division of Bayan-Olgii Aimag.

5.6.2 Agriculture

273. Animal breeding is the main economic sector both in Khovd and Bayan-Olgii aimags. The contribution of the sector amounts to 76.0% of aimag GDP or 33.4 billion tugrug in Khovd Aimag, and 68.3% of GDP or 24.6 billion tugrug in Bayan-Olgii Aimag. The number of livestock in both aimags is constantly increasing. Table 38 illustrates the amount of livestock in the project area.

Table 38: Number of Livestock in the Project Area (2006) Total Camel Horse Cattle Sheep Goat Khovd 2,293,700 17,602 85,368 105,220 818,624 1,266,981 Bayan-Olgii 1,470,300 4,255 61,830 88,804 603,011 713,353 Source: Statistical Division of Khovd and Bayan-Olgii Aimags.

274. Crop production is of less importance in the agricultural sector of both aimags; in this case Khovd Aimag produces vastly more crop than Bayan-Olgii as can be seen in Table 39. 83

Table 39: Crop Production in the Project Area (2006) Hand- Fodder Hey made Aimag Sown Harvest Cereals Potatoes Vegetables crop harvest fodder ha ton ton ton ton ton ton ton Khovd 2,507.2 20,523.8 641.2 8,128.5 9,026.8 2,725.2 66,152.3 2,512.9 Bayan- 435.3 4,468.6 6.3 3,384.4 1,077.9 2,725.2 49,961.0 - Olgii Source: Statistical Division of Khovd and Bayan-Olgii Aimags.

5.6.3 Mining

275. There is some mining activity in the project area related to such deposits as Hkusheet coal mine and Asgat silver deposit.

276. Husheet coal mine deposit (Khovd aimag). Husheet coal mine deposit is located in a high mountanious area of the Altai mountain range, 210 km to south-east of Khovd City and 35 km West of Tsetseg soum. The mine primarily contains brown coal and explortation began in 1972, but ceased in 1998 with its full privatisation within the framework of Privatization Law. Ikh yam Co. Ltd., holding a 100% stake in the mine, began its exploration in 2004 and has supplied 7,000 tons of coal to the local end-users. The company has ambitious plans which include construction of new coal fired power station with new grid to provide the local end users with the electricity, establishing coking coal production plant, and exporting the coal to China.

277. Asgat silver deposit. Mine exploration at this site began in 1976. The Asgat deposit contains 7,369 tons of silver, 227,000 tons of copper and other poly-metals like zinc, surma etc. However, mineable silver reserves amount to 2300 tons. It is located in an area with limited accessibility, at high elevation and with permafrost (2,300–3,648 meters above sea level), 180 km from Olgii and 70 km from Nogoonnuur soum.

5.6.4 Infrastructure

278. Water supply systems. The water supply system in Khovd provides centralized drinking water distribution to office buildings and urban residential area. Daily water supply is 4,600 m3 of water from 9 groundwater wells. Traditional dwellings (ger) in Khovd are supplied with water from 8 water distribution stations, 4 deep wells and 3 hand water pumps. The water consumption is 388,300 m3 of water per day. Some 2,133 wells are used for water supply in rural areas. Surface water is the main source of the water for livestock.

279. Electric distribution systems. Khovd aimag is largely served with electricity from Russia because energy capacities at the local level are limited. A 110 kV transmission line links Russia and Olgii town of Bayan-Olgii Aimag and Miyangad soum of Khovd Aimag. Altantsugts, Sagsai, Tsengel, Ulaankhus and Buyant soums of Bayan-Olgii Aimag, as well as Hovd town, Duut, Erdeneburen soums of Hovd Aimag are connected to this line with 35kV transmission line.

5.6.5 Land Use

280. In general, agricultural land has been the dominant land use across both aimags, occupying more than 77% of the total land in each aimag. The land used for “transportation and network” occupies 0.2%, and 0.31% of the total territory in Bayan-Olgii, and Khovd Aimags respectively. As a result the proposed road would follow the existing earthen tracks, thereby slightly reducing the land use for “transportation and network.” 84

Table 40: Land Area by Classification Bayan-Olgii Aimag Khovd Aimag Land classification Area Percent of total Area Percent of total (,000 ha) (%) (,000 ha) (%) Agricultural lands 3,520,000 77.1 5,885,0 77 Cities, villages and other 15,405 0.34 28,405 0.3 settlements Transportation and 14,059 0.31 21,128 0.2 network land Forest resource land 22,568 0.49 464,851 6.1 Water resource land 46700 1.02 43,117 0.5 State special use land 947,844 20.74 1,163642 15.2 Total area 4,566,576 100 7,606,038 100 Source: Land management report of Hovd and Bayan-Olgii Aimags. 2005.

281. Land degradation. Land degradation is caused by two types of factors: natural and human activities. Natural factors are water erosion, wind erosion, and desertification. Human activity factors are many branches of earth track, overgrazing; and land deterioration due to mining and other similar activities.

5.6.6 Tourism

282. Ecotourism dominates in this region, since both aimags have diverse and distinctive flora and fauna, which represents a mixture of species from the high mountains, steppe, and deserts. Numerous globally threatened and endangered species inhabit in this region. In addition to ecotourism, the following types of tourism take place: viewing nomadic culture and lifestyle, visiting historical and cultural sites, fishing, mountain climbing, hunting, bird watching, and adventure tours are being developed in this aimag. Some Russian tourists come directly to Khovd and Bayan-Olgii aimags via Ulaanbaishint.

283. Khovd Aimag. There are 19 tourist camp sites, operated by 16 companies and the administration of Khar-us Nuur National Park. The total number of tourists was 8,247, including 909 foreign and 7,338 domestic tourists in 2006 and it is increasing yearly. Bayan Bulag Children’s camp provides services to about 570 children a year.

284. Bayan-Olgii Aimag. Some 7 tourist operators serve ecotourism activities in the area of Altai Tavan Bogd and Tsambagarav National Park. There are 3 other companies that operate recreational centers, spa-resorts, and children’s camp. Total number of foreign tourists was between 900–1,000 in the previous 2 years.

5.6.7 Health and Safety

a. Health Services

285. Khovd Aimag. Some 14 medical clinics, 2 intersoum medical clinics, and 6 hospitals for families provide basic clinic service to local residents and herders. A hospital in Khovd town plays a major role as a regional hospital to serve patients throughout the western region. In total, there are 569 hospital beds. Additionally, there are 16 private hospitals and 6 pharmacies. Some 128 physicians, 11 pharmacists, 235 nurses, and 115 medical assistants work in medical services of the aimag. On the whole, there are 14 physicians, 12 medical assistants, 38 mid- level medical personnel, and 61 beds per 10,000 individuals of the population. 85

286. Bayan-Olgii Aimag. There are 30 medical clinics with 561 beds. Some 141 physicians, 5 pharmacists, 392 mid-level medical personnel work in medical services of the aimag.

5.6.8 Noise and Vibration

287. Excessively high noise levels are a particular concern for “sensitive receivers”, i.e., recipients of sound for whom exposures to excessive sound levels are detrimental – hospitals, schools, or ecologically sensitive areas for example.In this instance, sensitive receivers along the road corridors (if any) could be a concern during both the construction activities and in regard to future traffic-generated noise.

288. Mongolian noise standards have been established as indicated by Table 33.

Table 41: Standard on Allowable Noise Levels at Domestic and Public Buildings Noise pressure level (db) at different geometric average frequencies

Location and time 63 125 250 500 1000 1000 2000 4000 8000 dba/ dba/ Noise level and noise equivalent level / 1 In rooms of hospital and sanitarium, and surgery rooms Daytime 53 48 40 34 30 27 25 23 35 Nighttime 55 44 35 29 25 22 20 18 30 2 In consulting room of hospitals Daytime 63 52 45 39 35 32 30 38 40 3 In the classroom of all type of schools, lecturers’ rooms, library, and conference halls Daytime 63 52 45 39 35 32 30 28 40 4 In residential area, rest homes, dormitories and kindergartens Daytime 63 52 45 39 35 32 30 28 40 Nighttime 55 44 35 29 25 22 20 18 30 5 In rooms of hotels, and hostels Daytime 67 57 49 44 40 37 35 33 45 Nighttime 53 48 40 34 30 25 25 25 35 6 In waiting halls of hotels, hostels and rest homes Daytime 71 61 54 49 45 42 40 38 50 7 In cafés and restaurants Daytime 75 66 59 54 50 47 45 43 55 8 In shopping centers, public service rooms, and waiting rooms of railway station Daytime 79 70 63 58 55 52 50 49 60 Note: If there is air conditioning, humidifier and air heater in a room, Noise pressure level (db) at different geometric average frequencies must be the noise level less 5db. Source: Standard UST 3826-85. Allowable Noise Levels in Domestic and Public Buildings.

289. The road corridor runs largely through a remote area with almost no settlements and there is no sensitive receptor.

5.7 Social and Cultural Resources

5.7.1 Geopolitical Structure and Administrative Divisions

290. Geography and its recent history largely define the current status of Mongolia’s socioeconomic development. Key geographic features show that Mongolia is a land-locked country with no direct outlet to the sea. The country’s latitude in combination with the distance from the sea, high altitude and proximity to Siberia has made it one of the world’s coldest countries, with mean winter temperatures approximating -20°C. This has resulted in the average crop-growing season lasting only about 100 days. In addition, it is a very dry country, with water 86 resources abundant only in limited areas of the northern and western regions.

291. The Gobi Desert and adjoining steppe lands constitute a significant portion of the country, which means that nomadic herding (and associated short-term cropping such as hay and other fodder) is the only currently viable agricultural activity in a large portion of Mongolia.

292. The Project road is part of the western regional road, which cuts across two aimags (provinces). It connects the cities of Khovd and Olgii with China in the southwest and Russia in the north. The region’s proximity to the border of these two large neighboring countries has big influence to its socioeconomic and cultural conditions.

293. The two aimags (Bayan-Olgii and Khovd) neatly bracket the project road section. Located in the far west of Mongolia along the Altai Mountains, which extend over approximately 1,500 km, The western portion of Khovd aimag borders the People’s Republic of China (PRC) and Bayan-Olgii Aimag; the norther portion is adjacent to Uvs Aimag; the eastern border is shared with Gobi-Altai Aimag; and the southern boundary is adjacent to the PRC.

294. Mongolia, which is divided into 22 major administrative units comprises of 21 aimags and the capital city of Ulaanbaatar. All are governed by 'Khurals', or elected bodies. Aimag population ranges from 12,500 to 122,000 people. The aimags vary in size with the largest covering as much as 165.4 km2 of territory. An aimag consists of up to 27 'soums' (district), including the aimag centre. Soums in turn are comprised of 'baghs'. In Mongolia there are 331 soums and 1550 baghs. Also the capital city, Ulaanbaatar, is subdivided into 121 districts called 'khoroos.'

295. The aimag centre is the administrative seat of local government, and the home of the aimag's legal bodies, theatres, hospitals, businesses, schools and industry. Most of the aimag population works in light industry, services and small business enterprises. Bagh populations tend to work in agricultural and animal husbandry. Baghs residents mainly lead a nomadic life. They migrate with their herds depending on the change in season and weather conditions. Typically their seasonal camps are located within the borders of their soum and baghs, though droughts, zuds, and other natural disasters, can push them to different areas.

5.7.2 Human and Social Resources

296. The Mongolian estimate total population is 3,086,918. The population density of Mongolia is 1.6 persons per square kilometer, making it one of the most sparsely populated countries in the world. The current natural population growth rate is estimated to be 1.495%, which is comparable to the 2005–2006 rate. On the other hand, the population of the two aimags in the project area accounts for 7.19% of the national population with a landmass that constitutes 7.80% of the total area of Mongolia. While about 61% (mostly in the Ulaanbaatar) of the population of the country is considered urban, the situation is reversed in the two aimags of the project area. About 70% of the population is classified rural. Of the total soums in the two affected aimags, 28 are within the Project affected area (12 in Bayan-Olgii and 16 in Khovd) encompassing nearly 122, km2 of land area with a total population of 189,400 in 2007 from 188,600 in 2006.

5.7.3 Population and Community

297. Mongolia’s population has increased from 1,594,800 in 2006 to 2,635,200 in 2007. The 2010. 87

Table 42: Comparative Population and Household Data, 2006–2007 Total Household Urban Household Rural Household 2006 2007 2006 2007 2006 2007 2006 2007 Mongolia 2,594,800 2,635,200 632,500 645,700 372,300 381,700 260,200 264,000 Bayan– 100,100 100,800 21,400 21,100 6,500 6,300 14,900 14,800 Olgii Khovd 88,500 88,600 19,900 19,700 6,600 6,500 13,300 13,200 Source: Mongolia Yearbook 2007. 2008 Ulaanbaatar.

298. More than 90% of the country's population is Mongolian ethnic groups. The core Mongolian ethnic group, Khalkha, is distributed all over the country, making up 80% of the population. The other major ethnic group, the Kazakhs, makes up about 6% and lives mostly in western Mongolia, mainly in Bayan-Olgii Aimag. A considerable number of Kazakhs immigrated to Kazakhstan in the early 1990s, but many have since returned. As for the linguistic reference of the Mongolian population, it relates to the Mongolian group of the Altaic family except for Kazakhs. This group is composed of Khalkh, Durvud, Buryad, Bayad, Uriankhai, Zakhchin, Darkhad, Torguud, Uuld, Myangad, Barga and Uzemchin dialects.

299. Some 14 different ethnic groups including Khalkh, Kazakh, Zakchin, Torguud, Urianhai reside in Khovd aimag; with Khalkh being prevalent. However, in Bayan-Olgii, ethnic composition includes Kazakh, Uriankai, Dorvod and Halh. The ethnic majority is Kazakh. Table 43 shows the ethnic population structure in the project area.

Table 43: Ethnic Minorities in the Project Area Unit Oold Oold Others Khalkh

Kazakh Dorvod Zahchin Zahchin Torguud Torguud Myangad Myangad Uriankhai Uriankhai Project area Population Khovd Num 92,395 26,231 16,532 25,876 7,199 2,233 5,089 3,399 3,363 1,766 % 100 28.6 18.0 28.2 7.9 2.4 5.5 3.7 3.7 2.0 Bayan-Olgii Num 95,226 467 85,612 1,360 5,705 2,614 % 100 0.49 89.4 1.4 6.0 2.7 Source: Government of Mongolia. 2002. EIA. Ulaanbaatar.

300. In both aimags, birth rates are higher than the national average while death rates are lower; thus the rate of natural increase of the population is higher. Life expectancy is slightly higher in the project area compared to the national average. The number of female-headed households (approximately 8% of the total population in both aimags) is lower than the national average.

2 301. The population density in 2006 Khovd and Bayan-Olgii was 1.21 people/ km and 2.08 people/ km2 respectively. The gender ratio is shown in Table 44. According to the data, women dominate in the project area. The natural increase was 1,363 and 1,929 in Hovd and Bayan- Olgii aimags, respectively. Unemployment in project area was accounted for 1.6–2.33% of total population.

Table 44: Gender Ratio in Khovd and Bayan-Olgii Aimags Project Area Gender Number of Number of Unemployment Man Woman Deaths Births Hovd 48.9% 51.1% 471 1,834 1,521 Bayan-Olgii 49.5% 50.5% 476 2,405 2,218 Source: Government of Mongolia. 2007. EIA. Ulaanbaatar. 88

5.7.4 Education

302. Based on 2000 Population and Housing Census, the literacy rate in the country of population fifteen years old and above was 97.6% with the rate slightly higher for male than female at 98 and 97.5%, respectively. The number of students and pupils in all types of educational institutions has reached (excluding pupils studying in pre-primary schools) at 733.2 thousands and increased by 3.2%, compared with 2004–2005 school years. At the beginning of academic year of 2007–2008, the number of pupils in general educational schools reached (excluding students studying abroad and pupils studying in schools with evening classes) at 537.5 thousands. The total number of students studying in universities, higher educational institutions, colleges, technical and vocational schools had been increasing over the years and had reached 180.2 thousand in 2007-2008 academic year. Out of these, 69.9% studied in public educational institutions while 30.1% studied in private educational institutions.

303. The availability of educational facilities and personnel in the project area in comparison to the country as a whole is quite favorable. In school year 2007–2008, the ratio of pupils to teachers and the numbers of schools compared favorably to national averages given the population of the project area as a proportion of the national population. Participation rates for children aged 4–19 in the educational system in the project area are higher than the national rate. Table 45: Selected Education Indicators, Mongolia and Project Area Indicators (2006-2008) Mongolia Bayan Olgii Khovd No. of general education 754 41 24 schools 2006-07 Average No. of pupils per teacher in gen ed 30.9 27.2 33.1 school 2007-08 No. of teachers in gen ed 537,500 1,127 881 schools 2007-08 General education Gross M F T M F T M F T Enrolment Ratio 2007-08 93.3 97.6 95.4 94.7 94.8 94.7 96.9 98.7 97.8 Source: Mongolia Yearbook 2007. Ulaanbaatar. 2008.

304. The concentration of schools in the Aimag centers reflects Mongolia’s increasing urbanization (57% of the population lived in urban centers in 2008 with average rate of urbanization (2005–2010) estimated to be 1.2%. In less densely populated areas, as in other parts of the world, schools can be widely scattered and lack a range of facilities and services.

5.7.5 Health

305. The population health status in Mongolia dramatically improved over the years. Infant mortality had decreased dramatically while maternal mortality had experienced an almost 100- fold decline, and communicable diseases such as louse-born epidemic typhus, genital lymphgranulomatosis, smallpox and poliomyelitis were eradicated, contributing to an almost four-fold increase in population number and a general improvement in the health condition. Although such profound changes have been associated with a number of socio-economic factors, they have been undeniably bound to the contemporary science-based health sector development in Mongolia.

306. Despite this improvement however, the health sector still faces challenging problems related to the deepened marginalization of some of the population, internal migration and the number of homeless people as well as poor living conditions which are causing the increase of poverty-related diseases such as TB and STDs. In addition, there are problems of unequal 89 health status and access to health services between the rural and urban populations, and between different income groups.

307. A large portion of the health budget is still spent on curative services. There are weaknesses in hospital services: inefficiency, patient dissatisfaction, outdated treatment protocols and equipment. Since January 2003 the government started to implement the Public Sector Management and Finance Act, a new phase of health system organization and financing with output-based funding. The successful implementation of the new regulations is an immediate challenge to increase cost-effectiveness and greater responsibility of health organizations in the country. Investment in the medical sector increased and 33 hospitals were built in 2002–2003 on the state budget.

308. The health sector comprises of 17 specialized hospitals and centers, 4 regional diagnostic and treatment centers, 12 district and 21 aimag general hospitals, 323 soum hospitals, 18 feldsher posts, 233 family group practices, and 536 private hospitals and 57 drug supply companies/pharmacies.

309. Health service provision indicators for the project area show that the population of Bayan-Olgii and Khovd is still poorly served compared to the national average as indicated by the following measures: number of persons per physician and the number of persons per nurse. Table 46 below shows the ditribution of physicians per 10,000 people.

Table 46: Key Indicators of Health Service Supply in Aimags of the Project Area No. of Persons/ Aimag Physicians Physicians No. of Persons/Nurse Bayan-Olgii 141 709 453 Khovd 127 692 379 Project Area 268 708 226 National 6,788 375 317 Project Area as a % of national 3.9 53.3 70.0 Source: Mongolian Statistical Yearbook. 2005. P-309; 311; 312.

310. Khovd percentage and Bayan-Olgii has 65.2% and 69.9%, respectively, of its population living in rural areas. It is thus not surprising that the ratio of population to health care providers as well as other services in the project area is still much lower compared to the national average. Most of the health providers and the facilities and services are concentrated in urban areas. However, there is also a positive sign of improvement as shown by certain indicators as in higher percentage of infants being immunized and lower mortality rate in the project area compared to national average.

5.7.6 Social Services

311. Since the 1960’s, urbanization hss rapidly taken place in Mongolia. Currently, 57% of the population lives in urban areas mostly in Ulaanbaatar while 43% lives in the rural areas. Around 49.1% of the total population lives in around 265,500 apartments covering approximately 6,878 thousand square meters while 50.5% live in ger districts. The square per capita living in apartment is 6.7 quadrate meters in Ulaanbaatar and 56 quadrate meters in rural areas, which are twice lower than the international standard. Some 81.6% of households with apartments live in private houses and 16.6% live in state-owned apartments. Approximately 67.3% of the total Mongolian households, comprising 94.5% of Ulaanbaatar households and 34.3% of rural households, are linked to the energy source while 44.4% of the total households who live in an 90 apartment have centralized heating.

312. In 2007, at the national level the housing stock reached at 8,105.1 thousand sqm and increased by 13.7% compared with 2004, by 10.0% compared with 2005, and by 4.7% compared with 2006. In 2006, 446.6 thousand sqm of area were allocated with about 95.9% of total intended for private houses and apartments.

313. In 2007, the number of houses with plumbing reached 116.4 thousand and increased by 9.0% compared with 2006. Likewise in 2007, the number of households, using distributed water reached 313.7 thousands, showing an increase of 5.9% households or by 17.5 thousands compared with 2006.

314. In 2006, at the national level there were 393 public baths but in 2007 this number has reached 458 indicatibg an increase of 16.5%. In 2007, at the national level, 878 hotels have been constructed compared to 2006 representing an increase of 10.6%.

315. Other data is available to further shed light on the socioeconomic situation of the PIA. Table 47 presents data on the ownership of various assets by households in the project area.

Table 47: Selected Social Indicators of Herdsman Households (2005) Number of Households Owning Electric Engine Aimag Motor Television Vehicle Motorcycle Tractor Bayan-Olgii 4,026 2,875 1,735 1,987 63 Khovd 5,292 4,744 1,384 1,694 135 Project Impact Area Totals 9,318 7,619 3,119 3,681 198 National Totals 67,701 60,136 23,228 37,411 2,372 Source: Mongolian Statistical Yearbook. 2005. P-179.

316. Table 48 below presents communications data showing a lower rate of connectivity characterizing the PIA population, when compared with those of Mongolia as a whole.

Table 48: Number of Telephones per 1000 Persons (2005) Telephones per 1000 Persons Aimag 2005 Bayan-Olgii 31.1 Kovd 30.6 Project Impact Area Totals 30.8 National Totals 62.6 Source: Mongolian Statistical Yearbook. 2005. p. 224.

317. Since the 1960’s, urbanization is rapidly taking place in Mongolia. Currently, 57% of the population lives in urban areas mostly in Ulaanbaatar while 43% lives in the rural areas. Around 49.1% of the total population lives in around 265,500 apartments covering approximately 6,878 thousand square meters while 50.5% lives in ger districts. The square per capita living in apartment is 6.7 quadrate meters in Ulaanbaatar and 56 quadrate meters in rural areas, which are twice lower than the international standard. Some 81.6% of households with apartments live in private houses and 16.6% live in state-owned apartments. Approximately 67.3% of the total Mongolian households, comprising 94.5% of Ulaanbaatar households and 34.3% of rural households, are linked to the energy source while 44.4% of the total households who live in an 91 apartment have centralized heating.

318. In 2007, at the national level the housing stock reached at 8105.1 thou sqm and increased by 13.7% compared with 2004, by 10.0% compared with 2005, and by 4.7% compared with 2006. In 2006, 446.6 thou sqm of area were allocated with about 95.9% of total intended for private houses and apartments.

319. In 2007, the number of houses with plumbing reached at 1164 and increased by 9.0% compared with 2006. Likewise in 2007, the number of households, using distributed water reached 313.7 thousands, showing an increase of 5.9% households or by 17.5 thousands compared with 2006.

320. In 2006, at the national level there were 393 public baths but in 2007 this number has reached 458 for an increase of 16.5%. In 2007, at the national level, 878 hotels have been constructed compared to 2006 representing an increase of 10.6%.

321. Other data is available to further shed light on the socioeconomic situation of the project area. Table 49 presents data on the ownership of various assets by households in the project area.

Table 49: Selected Social Indicators of Herdsman Households (2005) Number of Households Owning Electric Engine Aimag Motor Television Vehicle Motorcycle Tractor Bayan-Olgii 4,026 2,875 1,735 1,987 63 Khovd 5,292 4,744 1,384 1,694 135 Project Impact Area Totals 9,318 7,619 3,119 3,681 198 National Totals 67,701 60,136 23,228 37,411 2,372 Source: Mongolian Statistical Yearbook. 2005. P-179.

322. Table 50 presents communications data showing a lower rate of connectivity characterizing the PIA population, when compared with those of Mongolia as a whole.

Table 50: Number of Telephones per 1000 Persons (2005) Telephones per 1000 Persons Aimag 2005 Bayan-Olgii 31.1 Khovd 30.6 Project Impact Area Totals 30.8 National Totals 62.6 Source: Mongolian Statistical Yearbook. 2005. p. 224.

5.7.7 Customs and Traditions

323. Mongolian customs and traditions are unique traditions formed during the development the central Asian nomadic civilization, which has been passed on from generation to generation of Mongols over the centuries. Mongolian customs and traditions encompassed all aspects of life including morality, ethics, science, education, religious life and family relationships of the Mongols. Mongolian customs and traditions have their own peculiarities and specific features, 92 the likes of which are distinguished from other nations, and have been researched and recorded by both Mongolian and foreign scholars. Since early times, the education and upbringing of children in civilized ways have been considered in Mongolia to be an obligation of the state and the people. This is why the linguistic association of the Mongolian word "humuujil" (educate, bring up) is related to the idea of "humuun" (human) or "humuuniig hun bolgoh" (to bring up, make up a man). Along with a healthy and normal physical upbringing, much attention is paid to the intellectual, moral and ethical development of the child since inception. As such, Mongolian tradition strictly follow a code of conduct for dealing with pregnant women to ensure that the unborn child is reared in a conducive environment which is then followed by practices in child rearing which ensures the inculcation of beliefs and practices to foster cultural norms and traditions.

324. Another established norm is the practice of greeting and saluting each other with respect and honor. Elders, distinguished and honored persons are greeted first and the young ones respond to them in well-wishing and respectable manner. Hand shaking when greeting another person is not desirable, as the touching of the hand of an honored and respected person is considered impolite and a violation of tradition. It is considered a rather shameful behavior and an attempt to make others dirty and impure. The most venerable greeting would involve a person tightly buttoning his clothes, tightening his belt, putting his hat on, extending his right hand while bowing three times and touching his forehead with his fingers.

325. Since ancient times, the Mongols deeply revered combining words of well-wishing with the words of greetings. The traditional ceremony of greeting during the Tsagaan Sar is performed once a year. The ceremony of greeting with a "hadag" (blue silk scarf) is a tradition inherited from ancient times. It is strictly adhered to and is considered the highest and most revered form of greeting.

326. This tradition has been strictly observed by the Mongols for centuries and has become a core value and basis for the education and upbringing of children. For example:

. It is forbidden to look suspiciously at one’s mother, father, grandparents, and familiar or unfamiliar elderly people. The offending person would be treated as a man disregarding the law and considered worse than an animal. . It is forbidden to throw waste into rivers, lakes and spas, the offender would be punished for spoiling the water - the source of all life. . Mongols do not beat horses, dogs and animals; it is equal to beating a close friend. . It is strictly forbidden to throw burning ash from the stove as the burning ambers might become fire and endanger the lives of people and animals and damage nature. . It is forbidden to leave holes for rope and tether fastening unfilled with soil or stones. The soil injured by a stake must be re-covered. Open holes may also injure the legs of animals. . It would be considered shameful to urinate towards the setting or rising sun. This way one respects the holiness of the sun, which shines and illuminates the whole world. . Not feeding a guest is considered as a sign of ignorance and unfriendliness. This person would be considered greedy and stingy who ignores the Mongolian tradition of hospitality. It is forbidden to be unfair or inhuman, to be arrogant and rude, which insults the reputation of the elders, of ancestors and of one's personal reputation. The Mongols highly revere their reputation, which is evident 93

from the proverbs "Muu amidyavsnaas ner turtei sain ukh" (Better to die with a good reputation than be alive with a bad one), "Ner khugarsnaas yas khugar n' deer" (Better the bone be broken than one’s reputation).

327. The Mongolian taboos, rules of restrictions and unwritten law, are traditions inherited not only from the ancestors, but also from the teachings of Chinggis Khaan, and contained in the Code of Law of Great Mongolia called "Ikh Zasag," home to customs and traditions of the Mongolian tribes and nationalities.

328. These customs and tradition still predominate in Mongolian society and strongly influence the way of life particularly in predominantly rural areas of aimags like Bayan Ogliy and Hovd.

5.7.8 Economy

329. The economically active population in the PIA is shown in Table 51. As indicated, the unemployment rate is higher in the project area than the national level. As will be discussed below, the income levels are lower in the PIA than the national average.

Table 51: Economically Active Population and Employed/Unemployed Persons

Economically Unemployed as a % Active Employed Unemployed of Economically Population Persons Persons Active Population Aimag (000) (000) (000) (000) Bayan-Olgii 34.2 32.0 2.2 6.4 Khovd 37.0 35.5 1.5 4.1 Project Impact Area Totals 71.2 67.5 3.7 5.2 National Totals 1001.2 968.3 32.9 3.3 PIA as a % of National Total 7.11 6.97 11.25 N/A Source: Mongolian Statistical Yearbook. 2005.

330. Poverty and unemployment has a direct correlation. Around 27.5–38.2% of the poor population of employment age living in the aimag center is unemployed. In of the first half of 2006, a number of unemployed people reached 8,000, of which 2,300 were actively seeking jobs.

331. With a relatively large land mass (about 1.6 million km2) and a small population (3.09 million), Mongolia has one of the lowest population densities in the world, with most of the country having less than 1.6 persons per km2. The low population density means that infrastructure and social services have a higher per person cost because population concentrations are so low. As a result, the domestic market is too low resulting in its inability to support a wide range of industries and services. Thus, aside from herding and some limited industrial and service activities to support the domestic market, economic activity has been linked to exploitation of timber in the north and the exploitation of some mineral resources including coal, copper, iron ore, fluorspar, gold, molybdenum, zinc and oil.

5.7.9 Agriculture

332. Topography and climate are key determinants of economic development in Mongolia, with the high mountains and dry steppe and desert areas limiting the range of agricultural activities to seasonal grazing with some crops grown for personal consumption or sale to local markets. The typically cold dry weather means that the average crop-growing season lasts 94 about 100 days. While these factors place limits on agricultural development, the PIA also includes nature reserves that are the home to a wide range of rare and endangered species, as well as many beautiful vistas and other natural attractions. These characteristics indicate that the PIA has considerable potential for ecotourism.

333. In general, agricultural land has been the dominant land use across both aimags, occupying more than 77% of the total land in each aimag. However, this should not be taken to mean that all of these areas are arable for permanent agriculture. Rather, most of these lands including those in the mountainous areas are grazing lands that are periodically used. Soils are stony in the mountain areas, with only meadow areas suitable for grazing and limited agriculture. The land used for “the transport network” in Bayan-Olgii, and Hovd Aimags occupies 0.2%, and 0.31% of the total territory, respectively.

334. About 60–70% of Bayan-Olgii constitutes high mountains and the rest, lowlands and watercourses. Hovd also has a high elevation and stony soils. From the mountain areas to the border with China, desert and steppe become common. Soils along watercourses are suitable for agriculture. There is seasonal grazing.

335. Land use in the project area is shown in Table 52. Arable/steppe lands constitute the largest form of land use followed by the special protected areas. The main agricultural activity is livestock herding.

Table 52: Land Use by Classification Bayan-Olgii Aimag Khovd Aimag Area Percent of total Area Percent of total Land classification (,000 ha) (%) (,000 ha) (%) Arable/Steppe lands 3,520,000 77.1 5,885,0 77 Cities, villages and other settlements 15,405 0.34 28,405 0.3 Transportation and network land 14,059 0.31 21,128 0.2 Forest resource land 22,568 0.49 464,851 6.1 Water resource land 46700 1.02 43,117 0.5 State special use land 947,844 20.74 1,163642 15.2 Total area 4,566,576 100 7,606,038 100 Source: Land management report of Khovd and Bayan-Olgii Aimags. 2005.

5.7.10 Manufacturing/Industry/Mining Manufacturing/Industry/Mining

336. The processing industry consists of wool, cashmere, leather, wood, metal, textile, and food production. Over the past decade, industrial production has experienced a continuing decline due mainly to the shortage of funds for the procurement of agricultural raw materials.

337. Presently, there are over 1,800 small and medium sized business entities engaged in the food industry. Manufacturing and supply of meat, bread, beverages, flour products and salt increased. Processing of agricultural food products and raw materials is developing in Mongolia. Currently, many small and medium factories and business entities manufacturing milk products are established in the aimag, towns and soums.

338. There is a network of flourmills with a total capacity of more than 300,000 tons of flour per year. There is also a network of 8 larger grain storage facilities with a total capacity of 250,000 tons of cereals. Mongolia is producing one third of the total domestic consumption of flour. The total annual capacity of ten biggest flour factories is 163.0 thousand tons. Meat and 95 meat product manufacturing has an important place in the food sector and is considered to be the sector with the most potential for future development. There are 22 medium and large slaughterhouses with a total capacity of about 62,000 tons of carcass meat per year. However, they only use 29% of their total capacity.

339. In addition, there are many smaller slaughtering facilities in the Aimag and Soum Centers. There are over 60 small and medium enterprises that produce meat products. As far as food supply to the population is concerned, local meat production meets the domestic demand totally and the extra produce for some meat products are exported. Meat consumption per person has gradually increased up to 120 kilograms per year. In 2000-2003, eight meat- processing factories with an annual capacity of 60,000 tons of meat were established. At the end of 2003 some 11,200 tons of meat and 756 tons of by-products were exported. During the last year, meat- processing factories were certificated and 20 have received export licenses.

340. Aimags such as Bayan Oglii and Khovd, which are predominantly agricultural with livestock as the major produce, are the primary sources of raw materials and products for the processing industry.

341. Mongolia has rich mineral resources and exploitation of these has been increasing during the transition from state controlled to market economy. There are over 8,000 deposits of 440 different minerals in Mongolia, of which about 600 deposits and outcrops of resources have been determined. A total of 181 gold deposits, 5 copper molybdenum deposits, a lead deposit, 5 tin, 10 steel, iron, 4 silver, magnesium, mica, 3 gypsum, 3 asbect, 3 graphite, 2 bitumen, 42 coal and brown coal, phosphorus, 42 fluorspar, 12 salt, 10 sodium sulphate, 6 semi-precious stone, 9 crystal, about 30 underground water deposits and 205 construction materials, including stone, sand, gravel, limestone, marble, plaster, cement and mineral pigment's raw materials are found. Exploration works were conducted in about 70% of the deposits, and the resources of the deposits were evaluated from an industrial mining point of view.

342. Over 200 of the aforementioned deposits are being exploited now, of which 24 are non- ferrous metal deposits, 111 are gold, 34 coal, 15 salt and about 50 mineral deposits. The joint Mongolian-Russian Monrostsvetmet Company is exploiting four of the biggest mines, which have the capacity to extract 600,000 tons of fluorite a year, seven exploration parts, and a factory with the capacity to enrich and process 500,000–600,000 tons of fluorite annually. A gold mine with 250 liters capacity in two floating drags, which have a power to wash 1 million tons of sand a year, open mining with the annual capacity to extract 100,000 tons of coal and a geological exploration group are operating in the company.

343. However, in both Bayan-Olgii and Khovd Aimags, there are yet very few mining and chemical industries operating to contaminate the water, soil, and air; thus, the natural beauty of the regions are yet preserved.

5.7.11 Household Income, Expenditure and Living Standards

344. As per findings of the 2007 Household Socio-Economic Survey, monthly average income per household has increased by 31.7% compared with 2006, including, comparative average income from wages and salaries from 2006 and 2005 by 38.7 and 57.6% respectively at the national level and average income from pensions and allowances increased by 76.2% in 2007 in comparison to 2006 figures and by 2.3 times compared to 2005 figures.

96

345. For real increase adjusted by inflation, income from wages and salaries increased by 20.5% in 2007 compared to 2006 and 36.9% compared with 2005, and income from pensions and allowances have increased by 53.1% in 2007 compared to 2006 and increased almost twofold compared to 2005 figure. The household monetary income has increased by 65.9% in 2007 compared with 2004: from salary and wages the increase was about 92.2%, from pensions and allowances by 2.6 times, from household business income by 24.3% and from other incomes increased, by 35.6%.

346. At national level, the monthly average cash expenditure per household increased by 33.0% in 2007 from 2006 figures. Food is the highest item of expenditure. It increased by 33.5 and 55.9% in 2007 compared with 2006 and 2005 respectively, while the nonfood expenditure has increased by 34.8% in 2007 compared to 2006 and by 57.8% compared with 2005.

5.7.12 Poverty and Quality of Life

347. The National Statistical Office had conducted surveys that provide data on poverty including the 2002–2003 Household Income and Expenditure Survey (HIES) and Living Standards Measurement Survey (LSMS) and the 1998 LSMS.

348. From the results of these surveys, key characteristics of poverty include the following:

 Incidence of poverty is lower in the eastern aimags, where only about one-third are poor whereas in the more remote western aimags, about one-half are found to be poor. Overall, about 43% of rural residents are poor, whereas only about 30% of urban residents are poor.

 Larger families in rural areas tend to have a higher incidence of poverty and have less access to key social services.

 Household heads with higher levels of education have lower incidence of poverty.

 Employment in livestock or agriculture is highly correlated with poverty, whereas those employed in the service sectors are least likely to be poor. Employment with public and state companies is associated with better living standards.

 Households with property generally have lower incidence of poverty. The main asset owned by the population in Mongolia is livestock. The number of livestock owned by the poor is on average less than half of that of the non-poor households. In rural areas, households with livestock experienced lower poverty incidence than those without any livestock.

 The type of housing was highly associated with poverty status in urban areas. Those living in apartments are least likely to be poor; while those living in gers are most likely to be poor. In rural areas, those who live in houses are poorer than those living in gers. In urban areas, the poor had significantly less access to water sources, sanitation facilities and electricity; while in rural areas the poor and non-poor had no significant differences in access to these services. 97

349. According to the findings of the 2006 HIES, 32.2% of total population of the country is poor. Urban poverty is less than in rural areas. Poverty headcount is 27.9% in urban and 37.0% in rural areas. As estimation of poverty indicators based on results of the HIES, the poverty headcount decreased by 3.9 points, poverty gap has decreased by 0.9 points and poverty severity decreased by 0.2 points compared with years 2002–2003. This shows a positive trend on poverty reduction.

350. Table 53 shows the main characteristics of poverty households in the project area soums. Approximately one-fifth of poor households are headed by a single parent and about 40% of the single parent households are headed by females. According to the data, about 31% of the people in the project area soums are poor. This is somewhat surprising because the western region generally has higher incidences of poverty. For poor households, there are 4.3 persons per household in the project area soums and 5.6 persons per household at the national level.

Table 53: Poverty Characteristics in the PIA Indicator Bayan Olgii Khovd No. of Poor 34,725 23,821 Poverty Households 8,041 5,461 No. of person per Poor Household 4.3 4.4 Single Parent Poor Household 567 1,992 Female Headed Poor household 45 1,079 No. of HH Poor in Agriculture 3,500 5,461 No. of HH poor in Livestock 145,115 226,321 Livestock per Poor Household 41.5 48.5 Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

351. The data on agriculture indicate that all the poverty households in Khovd were involved in agriculture, whereas only 43% of the poverty households in Bayan-Olgii were involved in agriculture. Similarly, the number of head of livestock per poor households was lower in Bayan- Olgii. However, it should also be noted that the poor households identified in this survey were especially vulnerable to livestock mortality during the severe winters from 1999–2002.

352. National Statistical Office (NSO) undertook the “Child Development - 2005/2006” Survey with technical and financial assistance of UNICEF. Result showed that 6.3% of total children below 5 years of age are underweight. However, overtime this rate appears to be declining. Likewise, 5.6% of urban children below 5 years of age are underweight and 7.0% of rural children below 5 years of age are underweight. It shows that the proportion of underweight children is relatively higher in rural than urban areas.

5.7.13 Cultural/Archeological, Recreational and Touristic Sites and Development

353. The attractions and activities for tourists in Mongolia relate to the natural environment, historic features and cultural heritage. Mongolia has diverse and distinctive vegetation and fauna including some rare species such as the Argali Sheep, Przewalski Horse, Asiatic wild ass, wild Bactrian camels, snow leopard and ibex. The remains of dinosaurs have been found in the Gobi desert. The historic heritage of Mongolia is mainly related to Chinggis Khaan, the warrior- statesman, who in the 13th century united the Mongolian people into a strong nation that controlled much of Asia. The traditional nomadic way of life, based on livestock raising and living in traditional gers, is of great interest to overseas visitors. The two major public holidays are Naadam, a traditional festival celebrated each summer and displays three types of traditional games: horse racing, wrestling and archery, and the Tsagaan Sar, the Mongolian Lunar New Year, which marks the end of winter and the beginning of spring. These two festivals are the 98 most visited events by tourists.

354. The capital of modern Mongolia, Ulaanbaatar, is a city with a history over 360 years long. Distinctive and original culture, the old-time hospitality of Mongols, a remarkable variety of scenery, and the rich animal and plant kingdoms of Mongolia exert a fascination for tourists. Since Mongolia's transfer to the market economy in 1990, the tourism sector has evolved into a critical part of the country's development. It has been a major factor in Mongolia's union with the world trend of globalization.

355. Around US$ 150 million is collected each year from travel and tourism, equal to 10% of the country's GDR. The construction of more hotels, tourist camps, restaurants and reliable transportation networks which are up to international standards will draw more tourists to Mongolia and increase the profits of companies operating in the tourism sector. At the same time, Mongolia's transition to the market economy has resulted in the emergence of private sectors that have started to operate in the tourism industry. The number of private tourist companies has mushroomed nationwide. There are 495 tourism companies, 140 tourist camps and over 200 hotels. In accordance with the declaration of 2004 as the Discover Mongolia Year, the numbers of foreign tourists have been increasing. As of the first six months of 2004, a total of 107,977 tourists visited Mongolia. At the same time of last year, 74,365 tourists were welcomed to the country.

356. Human settlement can be traced back in the project area as early as the Paleolithic and Neolithic eras. Appendix II provides details of archeological sites in the project area. A detailed survey of archeological sites is planned at pre-Detailed Design stage in the framework of Topographic and Environmental Survey of environmentally sensitive areas as outlined in Appendix II.

357. The following describes evidence of ancient history in the area:

 Petroglyphs of Bayan-Enger: There are several small stones with petroglyphs on the east bank of Tolbo Lake, Bayan-Olgii Aimag. Mainly animals, especially ibex with vertical horns and horns along the spine are depicted on these stones. The figures of two men with outstretched arms and surrounded by animals were also depicted. These petroglyphs were dated from the Bronze Age.

 Petroglyph in Tsambagarav: It is located in the Tsambagarav Mountains of Erdeneburen soum of Hovd Aimag. In the black rock of Tsambagarav ountain, there are many figures, and the one of soldiers, engraved by tools with sharp tips, is the most interesting. Some of the soldiers are wearing full suits of armor; some of them have broad shoulders, slim waists, and no armor. All horses are fully suited with armor as well. Scholar M.Shinekhuu estimates that these range in age from the 4th to 6th century AD.

 Petroglyphs of Hongio River: Along the Hongio River, there are two rocky hills, Alag chuluut and Ikher. There are petroglyphs in flat rocks on these hills. These were found by a Mongolian-Russian expedition in 1979. On flat rocks, figures of animals such as a single and herd of ibexes, antelope, wolf, fox, camel, cow, and hunters with bow and arrow, who are walking and riding camels, are engraved. Among them, the figures of two people leading 99

something similar to a plough, harnessed to two cows with big horns, is unique and dates back to the Bronze Age.

 Petroglyphs of Khushuut: It is located in Khusuut Mountain, and near the banks of the Hongio River in Erdeneburen soum of Hovd Aimag. In rocks of this mountain, figures of a single and several ibexes, and 9 hunters with arrow and bow, who are riding bareback on horses and wearing boots with a cone-shaped toecap, are depicted. Scholars date it to the Iron Age (7th–3rd century BC).

 Petroglyphs near to Khovd Town: There are several Petroglyphs in the mountains near Hovd city. Among them, the figures of animals such as ibex, deer, camel, fox, and argali dominate. These petroglyphs date back to the early Bronze Age, the early Iron Age and up to more recent periods. The figures with Tibetan inscriptions date to the Middle Ages.

 “San” Wall: It is located in Khovd City. It is an historical monument and all that remains of a fortification wall that from the Manchu period. It dates back more than 300 years (See Appendix II). The road next to the wall was one of studied alternatives but it was not selected; the distance between selected alignment and the wall is about 3 km.

 Deer Stones: Mongolian ancient megaliths carved with symbols. The name comes from their carved depictions of flying deers. Their purpose and creators are unknown. To date, archaeologists have recorded around 700 Deer Stones, of which 550 are located in Mongolia. Deer stones probably were originally erected by Bronze Age nomads around 1000 BC. The deer stone can be divided into three sections, representing the three worlds of ancient Central Asian mythology: the sky, earth, and underground world of the spirits. The top part of the stone is decorated with sun and moon, representing the sky; the center part shows deer or other hoofed animals, representing the world of the living; and bottom part shows bow and arrows, knives, swords, or other weapons, representing death and the underworld. The deer on the monument is represented in silhouette with long snout resembling a bird’s beak, rearing up with its legs folded under its belly. The deer is an important totemic symbol in Mongolian society: ancient Mongols believed themselves to be descended from a deer and wolf, as stated in the opening passage of the Secret History of the Mongols. Later cultures have often reused the stones in their own burial mounds (known as khirigsuurs) and for other purposes. Some rare stones do have a human face carved at the top. The tallest of the stones is 15 feet tall.

 Khirigsuur: Stone-mound is a type of monument found on Bronze Age sites in Mongolia. Built by mobile pastoralists of Bronze and Iron age, khirigsuurs consist of a stone mound, surrounded by a square or circular fence of surface stones. The khirigsuurs are less studied compared to tombs because they were built using so much labor force to mound plentiful stones and artifacts with research value can only be occasionally found, since most of the khirigsuur were built for sacrificial or offering rituals. 100

During the field inspections, numerous of these ritual monuments were recorded along the road, especially in Bodonch area.

358. Chinggis wall or Sartagtain channel is one of the cultural, historical, and archeological heritages which could show not only the development of cultivation in Mongolia, but also the history of ancient states those had been settled in Mongolian territory. This channel dates to AD 625 to 635 or the time of Chinese Tan Empire in Mongolian territory. The Sartagtain channel located along the coast of Khar Us Lake in Khovd Aimag (see Figure 27), is protected as part of Khar Us Nuur National Park. The distance between the alignment and the coast of Khar Us Lake is more than 20 km.

Figure 27: Location of Sartagtai Channel

Chinggis wall or Sartagtain channel

Source: Government of Mongolia. 2007. EIA. Ulaanbaatar. 101

6. ALTERNATIVES

6.1 Alternative Analysis

359. According to ADB Environmental Guidelines alternatives should be compared in terms of their potential environmental impacts, capital and recurrent costs, suitability under local conditions, and institutional, training and monitoring requirements. Accordingly, the alternatives that are to be considered include project alternatives, location alternatives and technological alternatives. And it is imperative that the alternative analysis is carried out very early in the project cycle.

360. In general, the design process has considered the rehabilitation of the road alignment that was recommended by the EIA in 2007.1 As needed, minor changes in vertical or horizontal alignments has been designed to improve the roads. Road widening has been considered only where essential to avoid land acquisition and attendant social impacts. The 20072 EIA of the project for Preparing the Western Regional Road in Mongolia Western Regional Road has also considered the “No Action Alternative.’’

6.2 No-action alternative

361. The “No Action Alternative” addresses the likely consequences of not undertaking the proposed action. In this instance, failure to develop the road section from Khovd to Buraatyn Davaa would be an impediment to travel and transportation of people along the Western Regional Road. Further, it would render the development of the other sections of the Western Regional Road corridor a profligate exercise which in turn would also be a constraint on future improvements in the economy of local communities.

362. Further more, if the current practice of using multi-track earth roads is allowed to continue it will have adverse impacts on pasture lands, habitats and flora, and deteriorate air quality through generation of dust. Conversely, if the road is improved, the increased accessibility may lead to an increase in poaching, transmission of diseases, and also increase potential risk to safety of herders and their livestock crossing the road. However, these adverse impacts can largely be avoided or mitigated by proper design and planning and the implementation of an inclusive environmental management plan. Therefore, it can be safely determined that the “No Action Alternative” will not be a reasonable option.

6.3 Location Alternatives

363. Khovd Area. Three locational alternatives as well as the design alignment were considered for the Khovd area.

364. The design alignment utilizes the existing asphalt road leading north from Khovd towards Uvs Aimag and deviates onto a new alignment after approximately 10 km. The existing road requires widening and reconstruction and improvement of sharp curve at km 98+100. The construction of 2 new bridges are required on the Buyant River.

365. Alternative 1: begins at Dorolj Hill, proceeds over Hoyor Hill, crosses the asphalt road to Uvs. This alignment bypasses Khovd city by approximately 8 km. The crossing of Buyant River

1 Government of Mongolia. 2007. EIA. Ulaanbaatar. 2 Ibid. 102 is the same as for the design alignment.

366. Alternative 2: follows the existing road through Khovd city and over the two existing reinforced concrete bridges on the Buyant River.

367. Alternative 3: follows the design alignment from Khovd to km 98+000 then deviates from the design alignment heading in a westerly direction over a marshy/permafrost susceptible area to connect with the second alternative alignment. The construction of a new bridge (or bridges) would be required over the Buyant River.

368. Figure 28 depicts the three alternatives and the design alignment while the comparison of the three alternatives and the design alignment for impact is presented as Table 54.

Figure 28 Alternative Alignments in Khovd Town Area

Project Section

Khovd

Khovd

Source: TA Consultant’s Report. TA 7449-MON: Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

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Table 54: Comparison of Alternatives–Khovd Area Item Nature of Impact Design Alignment Alternative 1 Alternative 2 Alternative 3 Comparison Location bypasses the town bypasses the town traverses bypasses the town Alternative 1 not preferred about 8 km to east through the through the marsh area. town Environment: Air Impact on no impact no impact during no impact Alternative 2 not preferred public construction and operation Water Impact on minor impact during minor impact during no impact major impact during Alternative 3 not preferred surface construction construction construction water Noise Impact on no impact no impact during no impact Alternative 2 not preferred sensitive construction locations Permafrost Degradation no impact no impact no impact Significant Alternative 3 not preferred Ecosystems Degradation no impact no impact no impact during construction Alternative 3 not preferred Fauna Loss of no impact no impact no impact during construction Alternative 3 not preferred habitat Flora Loss of no impact no impact no impact during construction Alternative 3 not preferred habitat Forests Clearing no impact minor impact no impact minor impact Alternative 1 and 3 not preferred Socio-economic: Land take Area for similar increase in land take similar increase in land take Alternative 1 and 3 not ROW preferred Land acquisition Los of no loss no loss significant no loss Alternative 2 not preferred during construction property Utilities Interruption no interruption no interruption significant no interruption Alternative 2 not preferred to services Historical/cultural Damage no damage no damage Significant no damage Alternative 2 not preferred resources Next to the Qing Dynasty City wall Income Level increase no increase increase increase Alternative 1 not preferred Engineering: Cost Escalation no increase increase increase increase Alternative 1 not preferred Material Quantity no increase increase no increase increase Alternative 1 and 3 not preferred Cut and fill Area similar increase similar similar Alternative 1 not preferred Preference from comparison Design alignment preferred Source: TA Consultant’s Report. TA 7449-MON: Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

104

369. From the above comparison table (Table 54) it can be seen that except for the design alignment all the other three alternatives have more than one adverse impact; some of them significant. Thus, the design alternative appears as the option with the least environmental, economic and engineering cost.

370. Olon-Nuuruud lake area. The design alternative passes through interspersed lakes in the area 95 km to 100 km from Olgii along the alignment. This area’s alternatives were considered because the Governor and Local Government Officials of Olgii Aimag stated that the design alignment would have an adverse impact on the lakes, which were said to be habitats for endemic fish species. In public consultations at Hongor Ulun bagh (located in close proximity to the lakes) the community and the Governor of the bagh were in agreement that the design alignment should be changed, as it would affect the lakes adversely. In later research conducted by the Consultant the endemic fish species was reported as Mongolian Grayling.3

371. Alternative 1: This alternative was proposed by ADB and the PPTA consultant team to avoid adverse impacts on the lakes by detouring the alignment to the north. In the public consultation, however, participants were of the opinion that Alternative 1, too, was not suitable as it traverses through marshy areas and close to two springs which could dry up due to the road.

372. Alternative 2: This alternative was proposed by Ms. Kh. Sau Alesh, Governor, Tolbo Soum and Mr. Kh. Bahythan, State Environment Inspector based in Tolbo Soum. The proposed alternative also bypasses the lakes and cuts across hilly area to the south of the design alignment (Figure 29).

Figure 29: Olon-Nuuruud Lake Area Alternative Alignments

Project Section

Olon-Nuuruud Lake Area Khovd

Source: TA Consultant’s Report. TA 7449-MON: Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

373. Comparison of the Design alignment with the alternative alignments is presented in Table 55 below.

3 Personal communication with Ms. Kh. Saulesh, Governor, Tolbo soum and Mr. Kh. Bahythan, State Environment Inspector based in Tolbo soum. 105

Table 55: Comparison of Alternatives in Olon-Nuuruud Lake Area Item Nature of Impact Design Alignment Alternative 1 Alternative 2 Comparison Location traverses to the North of to the South of the Design Alignment is not between lakes the lakes lakes preferred Environment: Air/Noise Impact on sensitive locations No impact No impact No impact Water Impact on surface water Minor temporary Impacts on Minor temporary Alt 1 not preferred impact marsh and impact springs Permafrost Degradation Possible impact Possible impact Possible impact Ecosystems Degradation Potential impacts Minor impacts Minor impacts Design Alignment on the lakes disadvantageous Endemic Fish Potential Impacts on Lake Fish Minor impacts No Impacts Less Impacts than Design Alignment and DA Alt 2 preferred Fauna in General Loss of habitat Minor impacts on Minor impacts Minor impacts Design Alignment Fish slightly disadvantageous Flora Loss of habitat No impact No impact No impact Forests Clearing No impact No impact No impact Socio-economic: Land take Area for ROW slight increase slight decrease Alt 1 is not preferred Land Loss of property No impact No impact No impact Acquisition for construction Utilities Interruption to services No impact No impact No impact Historical/cultu Damage No impact damage to No impact Alt 1 not preferred ral/important springs resources Engineering: Cost Escalation none minor minor Alt 1 & 2 has disadvantages Material Requirement no increase slight increase slight increase Alt 1 & 2 has disadvantages Cut and fill Quantity no increase increase significant increase Alt 1 & 2 has disadvantages Preference from comparison Inconclusive Source: TA Consultant’s Report. TA 7449-MON: Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

106

374. Alternative 2 is the preferred option for environmental protection. Alternative 1 is not preferred because it will affect the springs used by the community. The Design alignment seems the economical option considering the terrain. At this stage, the environmental protection cost for the fish in the lakes is not known. All three options have the same level of impacts on surface water during construction and operation. The design alignment is clearly the least cost option without additional environmental protection costs for the lake fish. And it may be adopted with adequate protection measures for lake fish, without loosing the economical advantage against Alternative 2. However, further comparative studies would be required to decide on an alignment with the least adverse impacts. These studies should include but not be limited to the following:  Ecological studies to determine;

o Is the fish Mongolian Grayling endemic to this location?

o Are there other rare fauna and flora in the lakes?

o What are the impacts of the design alignment on the lakes?

o Can the adverse impacts be mitigated?

 Geo technical and hydrological investigations to ascertain permafrost and soft- ground in 2 alignments;

 Comparison of cost estimates for the 2 alignments; and  Consultation with community and Government officers.

375. The ecological studies will be carried out by the PPTA consultants. Geo technical investigations will be carried out by the detailed design consultants. PPTA consultants will provide environmental measures to protect the lakes and the total cost for each alternative. PMO and PPTA consultants will learn local people’s concerns about the Project. The local people have already expressed their concerns over (i) the water pollution of the lake due to the road, (ii) impacts on their livelihood such as fishing in the lake, and (iii) access to the road from their village. The PMO will respect the local people’s concerns first and will make the final decision by the end of 2010.

6.4 Technological Alternatives

376. Given the projected traffic flow, sub-grade strength, and extreme climate conditions, two initial surfacing alternatives are possible: double bituminous surface treatment (DBST) or asphalt concrete (AC). For DBST a 30 cm base course and 20 cm granular sub-base supported with a 20 cm non-frost sub grade could be used while for the AC a minimum 20 cm base with 20 cm granular sub-base supported with a 20 cm non-frost sub grade would be employed.

377. AC pavement has the advantage of strength and durability, with a longer design life of about 20 years. DBST pavement is less strong and durable and its application generally has a design life of up to 15 years with appropriate maintenance. DBST pavement is vulnerable to the progressive loss of cover aggregate and the deepening and expansion of potholes. Accordingly, the maintenance costs for DBST will be higher than AC pavement.

378. The Project Area has a climate with a long severe winter and a relatively warm summer where the minimum and maximum temperature range stretches from -40oC to 40oC. Rainfall is low and 107

concentrated during the mid-summer months. The extremely low temperatures during the long winter are a potent cause of damages to the pavement in the form of surface cracking, heaving and spring- thaw break-up. In addition, the large temperature difference between the summer and the winter seasons makes it problematic to select bituminous binders which will not crack during the winter and not become soft in summer. All of these climate-associated pavement damages are common for the existing paved roads in Mongolia. Thus, bituminous pavement will require additional maintenance expenses for filling cracks. The decision on pavement selection will be made considering costs (capital and recurrent) and in consultation with a cold climate pavement specialist. 108

7. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES

379. Transportation projects, as with all infrastructure development projects, have the potential to cause direct, indirect, and cumulative impacts to the natural and social environments. Likewise, the Project under consideration also will have beneficial and adverse impacts on the environment. The beneficial impacts are related to increased mobility and promoting economic development in Western Region of Mongolia. Manageable adverse impacts are primarily related to effect on permafrost areas, potential facilitation of poaching and illegal trade, and disruption of wild life migration patterns.

380. The Project has employed a threefold approach to minimize adverse environmental impacts:

 Avoidance. Comprehensive alternative analysis has been conducted during the preparation of the EIA to minimize potential adverse environmental and social impacts.

 Sound engineering. The project has been designed with state-of-the-art engineering which will avoid most sensitive issues. The TA consultant1 will also incorporate further measures to alleviate adverse site specific impacts of the project activities.

 Comprehensive mitigation plans includes the detailed environmental management plan (EMP), the environmental monitoring plan to check the efficacy of EMP implementation, and best practices in construction management.

7.1 Screening of Potential Impacts

381. Screening is a process that usually start at the very early stages of the project cycle and continued throughout the EIA process to facilitate the consideration of new issues that could emerge. The objective of the screening exercise is to establish the scope of the assessment which assists in avoiding the production of excessively lengthy reports, and also to enable flexibility in regard to consideration of new issues.

382. Comprehensive screening which identified relative significance of potential impacts of the proposed actions of the Western Regional Roads Development Project was carried out during the preparation of the Preliminary Environmental Impact Assessment2 and the EIA:2007.3 These environmental assessments were conducted for the full length of the Western Regional Roads Development Project of which the present project road section from Khovd to Buraatyn Davaa is only a component part. The present EIA draws from both the Preliminary Environmental Impact Assessment and the EIA 2007 while focusing on the site specific impacts and alternatives of the road section under consideration.

383. Preparation of the EIA for the Project involved defining and delimiting the development activity with regard to associated components and facilities, assessing the alternative sections, and determining the likelihood of an impact (adverse or beneficial) that could occur under each of the relevant environmental parameters. In the process, discussions were held with the PIU,

1 Consultant TA No. 7449- MON: Regional Transport Development Project Component 1 – Preparing the Western Regional Road II Project. 2 ADB TA 4643 Pre-feasibility study of the Western Regional Road Corridor. Draft Final Report. Volume 3. Preliminary Environmental Impact Assessment. 3 Govt of Mongolia. 2007.EIA.Ulaanbaatar. 109

aimag, soum and bagh Governors and officials, and the Public. These consultations were in addition to the public consultation rounds conducted during the EIA 2007 preparation phase.

384. The current environmental assessment is based on the potential sensitive issues and impacts identified in the above environmental scoping exercises as well as new and location specific information obtained during site visits, consultation with PIU and local administrations, and the public. To establish the scope of the present study and identify the significance of the impacts a scoping matrix was prepared as presented in Table 56 below.

385. The screening exercise showed that during construction and operational phases the major negative environmental impacts are associated with:

 Physical resources: natural hazards (flashfloods, snowstorms), soil erosion, and permafrost; and  Biological resources: possible impacts on fauna such as interruption of migratory patterns and increase in poaching and illegal trade.

386. On the other hand, the anticipated positive impacts are:

 Physical resources: improvement of air quality in relation to dust, less degradation of soils from erosion;  Biological resources: less impact to flora and nature habitats due to construction of asphalt road that utilizes an alignment far narrower than the multi-track alignment; and  Social and economic resources: Improved access and travel, contribution to reducing unemployment and economical development of region.

Table 56: Screening of Environmental Impacts4 Physical Ecological Economic Social & Cultural

r tmosphere & Topography & soils Geology & seismology Surface & ground wate A climate Flora Fauna Nature reserves Industries & agriculture Infrastructure facilities Transportation Land use Population communities Public health Socio-economic conditions Cultural heritage Constructio -2 -1 -1 -1 -1 -1 -2 0 0 - 0 0 - +1 0 n Operation 0 0 +1 -1/+1 -1 -1 +1 0 +1 +1 0 0 +1 0

0 No impact + Insignificant positive impact -1 Insignificant adverse impact +1 Moderate positive impact -2 Moderate adverse impact +2 Significant positive impact Source: TA Consultant’s Report. TA 7449-MON: Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

7.2 Anticipated Environmental Impacts

387. The impacts have been grouped under three general categories: physical, biological and socio-economic. Construction and operational phase impacts are considered separately. The

4 Provided no prevention/mitigation measures are taken. 110 assessment process also considers potential environmental enhancement measures and any additional considerations as warranted. Potential impacts from the Project were considered under the following categories:

 Direct Impacts – those directly due to the Project itself;

 Indirect Impacts – those resulting from activities arising from the Project, but not directly attributable to it; and  Cumulative Impacts – impacts which in combination would exert a significant additive influence.

388. Impacts in all three of above categories may be either:

 Short-term – impacts which occur during construction and affect land use, water quality and other factors. Many of these impacts will, however, be short-lived and without long-lasting effects. Even the effects of some relatively significant impacts such as earth excavations, for example, may be eventually rectified if appropriate mitigation action is implemented.  Long-term – road impacts that could, for example, affect regional land use or regional hydrology, and flooding if roads are poorly designed. Long-term negative impacts can also result from loss of agricultural land to other land uses; air and water pollution; and problems associated with scattered borrow pits.

389. Both short-term and long-term impacts may be either beneficial or adverse. Short-term positive impacts could include, for example, the generation of employment opportunities during the construction period. Long-term benefits could include enhanced development opportunities and improved transport services.

390. The most efficient and cost-effective way to ensure that construction works are environmentally sound is to include environmental safeguards in the construction contract documents. The Project will follow the standard specifications and General Conditions of Contract for construction contract purposes. Provisions for the protection of the environment are included in the EMP, and this would be included in the contract documents. In addition environmental protection clauses will be incorporated in to the Contract documents.

7.3 Topography and Soils

7.3.1 Impacts on Topographic Characteristics and Soils

391. Construction Phase. Potential impacts on topography are most likely to occur in the construction stage due to:

 Cut and Fill Requirements. Cut and fill activities may occur in some parts of the road section.  Borrow Pit Excavations. Unless properly controlled, borrow pits cause drainage and visual problems. 111

 Quarry Operations. Crushed rock will be required for construction purposes. Considerable changes in topography could result from quarry operations. Potential site-specific sources have been identified for crushed stone.

392. The impacts of the road development on soils include loss of productive soil, erosion, and contamination of soil.

 Loss of productive soil. The land in the Project Area is mostly used as pasture land. The switch from multi-track earth roads that have moderate effects on soil to the paved road that utilizes an alignment far narrower than the multi-track alignment would be a positive impact. Loss of productive soil in the construction phase is temporary and will be from a limited area. Soil loss will be arrested during the operational phase.  Erosion. Erosion results when soil or rock particles are removed by water or wind. There are different types of erosion including rainfall erosion, sheet erosion, rilling and gullying. Road construction and associated activities contribute to the erosion process through the exposure of large amounts of materials during potential blasting of mountains or cutting of hills, stone quarrying, filling and construction of project-related structures. The factors that are expected to contribute to the acceleration of erosion in the project area are strong winds and sandstorms, especially in the hilly and mountainous terrain, and increased frequency of rainfall especially in May- August. If erosion prevention measures described below in the construction and operational phases are implemented, no significant adverse impacts on soils are foreseen. During the operational phase, as with the productive soil, the use of the paved road when compared to the much wider multi-tracks, will likely reduce soil erosion, especially the dust that is generated as a result of vehicles traveling on the earth road.  Degradation of permafrost. As the road passes through perennially frozen areas of high mountain tundra it can potentially affect the degradation of permafrost and cause triggering of the thermokarst processes. The situation is accentuated by global warming contributing to permafrost thawing. The consequences of permafrost degradation are disintegration of the road infrastructure, change in local hydrology, etc as discussed in greater detail below.  Contamination of soil. Contamination of soil in the construction phase could result from accidental spillages of petroleum products. These can inhibit the growth of vegetation and finally lead to erosion.  Quarries and borrow pits. The location of quarries and borrow pits in the project area was provided earlier in Table 5 and Figure 11 in Section 4 of the EIA report. The list of borrow pits that could impart a significant effect the environment is given below as Table 57. However, it is anticipated that these impacts will be short-term and localized.

112

Table 57: Quarries and Borrow Pits with Potential Environmental Impacts No. Title Quarry location Potential impacts 1 Khashaat pass area quarry Near the top of Khashaat pass (0.7km from here MR to the top of Hashaat pass) 2 Holvoo lake area quarry At Holvoo lake MR 3 Buraat pass area quarry Near the top of Buraat pass MR Note: MR-migratory route of wild life. Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

393. Operation Phase. Heavy metals and oil and grease could be deposited on road sides and reach water and have an adverse impact on fauna. However, such contamination usually occurs in the case of very busy roads. No substantial contamination is foreseen in the case of operational activities of this road section. Land degradation would be reduced or reversed by diversion of traffic from earth tracks to a hard surface road. Therefore, no significant environmental impacts are anticipated during operation of the road.

7.3.2 Prevention/Mitigation Measures

394. Loss of soil for agricultural purposes. Loss of productive soil in the construction phase is of low significance and temporary and an alignment far narrower than the multi-track alignment would be a positive impact. Therefore, no mitigation actions related to potential loss of agricultural soil will be required.

395. Contamination of soil. Implementation of the Spill Management Plan prepared and submitted by the contractor (as required in Section 11-EMP) would arrest accidental spills of petroleum products and hazardous materials damaging the environment.

396. Erosion. The following remedial measures are recommended for incorporation in the bid documents and construction contracts:

 Prevention o Soil Erosion Management Plan to be prepared by the contractor and to be approved by the Employer before earthworks; o Minimizing the area of soil clearance; o Selection of less erodible material and good compaction, placement of gabions and riprap particularly around bridges and culverts; o Construction in erosion and flood-prone areas should be mainly restricted to the dry season; and o Replanting will be completed as soon as possible following fill placement to facilitate regeneration of a stabilizing ground cover.  Mitigation o Using geotextile for erosion control will be limited but might be justified in some locations (for example near Khovd town); o Stepped embankments will be required for embankments greater than 6 m; o Separation of topsoil from subsoil during the excavation works; reuse of topsoil as a superficial layer; o Reshaping the slope surface by notching, blazing and pocking to enhance seedling survivability; o Seeding with a fast growing native species and seed mix, immediately after fill placement; 113

o Stabilization of embankment slopes and road cuts by re-vegetation with grazing resistant plant species; and o Completion of discharge zones of drainage structures with riprap to reduce erosion when required.  Borrow Pits and Spoil Sites o Use of borrow pits and spoil sites and their restoration plans to be approved by the Employer; o Pit restoration will follow the completion of works in full compliance with all applicable standards and specifications; o Arrangements for opening and using material borrow pits will contain enforceable provisions; o The excavation and restoration of the borrow areas and their surroundings in an environmentally sound manner will be required before final acceptance and payment under the terms of contracts; o Borrow pit areas will be graded to ensure drainage and visual uniformity; o Topsoil from borrow pit areas will be saved and reused in re-vegetating the pits; and o Additional borrow pits will not be opened without the restoration of those areas no longer in use.

Table 58: Erosion Control Procedures Potential Erosion Problem Mitigation Measures Use of spoil and borrow pits All available spoil will be used for structural fill for access roads, stations, and embankments before borrow pits are excavated Locating borrow pits Borrow pits will be centrally located to serve more than one site Location of spoil and borrow Spoil and borrow pits will be sited far from industrial, agricultural, pits residential, historic and ecological sites Top soil from borrow pits Top soil from borrow pits will be removed and stock piled. When the project is completed the areas will be regarded, the top soil replaced and the area reseeded. Intercepting ditches will be constructed on the high side of the restored pit to minimize erosion Spoil disposal Spoil will be spread on the lowest yielding, least productive land available Soil disposal When soil is spread on slopes for permanent disposal it will be buttressed at the toe by a retaining wall. The surface of the slope will be stabilized with shotcrete, riprap or laid rubble, as necessary prior to seeding Steep cuts All steep cuts will be flattened and benched Natural Water courses Water courses will not be blocked and temporary soil and rock stockpiles will be designed so that runoff will not induce sedimentation of waterways Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

7.4 Permafrost Degradation

7.4.1 Impacts of Permafrost Degradation on Road

397. Degradation of ice-rich permafrost due to natural causes or anthropogenic activities can trigger a process called thermokarst. Thermokarst is a process of thawing ground ice that result in ground subsidence and formation of uneven thermokarst topography. If thermokarst takes place beneath a road, its structural integrity can be affected. On mountain slopes, degradation of ice-rich permafrost can create mechanical discontinuities, resulting in active-layer landslides. 114

7.4.2 Impacts of Road on Permafrost Degradation

398. Activities such as construction of roads and removal/disturbance of vegetation cover in permafrost areas can severely affect the topography leading to subsidence and disruption of engineering structures and modification of drainage patterns.

7.4.3 Mitigation of Permafrost Degradation

399. Preventive measures will be adopted to avoid permafrost degradation where possible. This will include avoiding areas with poor cryogenic and hydrogeological conditions such as areas close to the surface location of ground ice, perennial icing, frost mounds, solifluction- prone slopes, areas with ice-saturated soils, thermokarst areas and thermokarst lakes.

400. Construction practices and mitigation measures to minimize impacts of the road construction in permafrost areas have been adopted in countries with large northern regions. For example, Construction Regulations of the Russian Federation5 proposes the following general engineering measures during construction to enable the stability of the road structure in permafrost areas:

 Designing of roadbed in embankments;  Erecting the roadbed with rock, coarsely clastic rock and sand soils, and, in case of their shortage, clay materials;  Using natural and artificial heat-insulating materials in subgrade, embankment and road pavement;  Using non-woven synthetic materials (geotextile) in subgrade and embankment; and  Replacement of waterlogged soils of seasonally thawing layer and ice- saturated underlying permafrost with coarsely clastic rock and sand soils, correspondingly.

401. In respect of the design of a roadbed the Construction Regulations recommend the selection of one of two following approaches depending on climatic and permafrost conditions:

 Providing the elevation of the upper boundary of permafrost not lower than embankment bed and keeping it at this level throughout road operation (designed condition of soil in bed – frozen).  Enabling soils in the embankment bed to be thawed over the period of road operation considering allowable subsidence of road pavement.

402. As for the requirements for material of the roadbed the Construction Regulations recommend applying coarsely clastic rock, sand and clay soils in thawed state; clay soils should meet the requirements specified in the regulations.

5 bid. 115

7.5 Natural Disasters

7.5.1 Impacts of Natural Disasters

403. Natural hazards such as earthquakes and flashfloods (mudflows) and drifting snow may present a challenge for road development. The types and potential locations of natural hazards are shown in Table 59 along with mitigation measure to be taken. In addition to these measures warning signs will be used where appropriate.

Table 59: Location of Natural Hazard zones and Mitigation

Type of natural hazard Location/Chainage Length Mitigation measure Blowing and Buraat and Khashaat passes 500m earthen fence drifting snow Flashfloods Khovd-Shurga bag 2x2m box culvert Shurga bridge-entrance of Hongio 2.5x2m box culvert canyon Shurga bridge-entrance of Hongio 2x2m box culvert canyon Shurga bridge-entrance of Hongio 3x3m box culvert canyon Shurga bridge-entrance of Hongio 2x2m box culvert canyon Khashaat pass 2.5x2m box culvert Buraat pass 2x2m box culvert Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

404. In Buraat pass, Khashaat pass, the Hongio River, and Olgii flashfloods can have the following effects/results on the project road and associated structures:

 carrying sediment/stone flows/debris to the road structures;  clogging drainage structures by sediment and debris; and  scouring embankments.

7.5.2 Mitigation of Natural Disasters

405. Flashfloods. Flashflood/stream courses throughout the Project Area are primarily triggered by rainstorms and heavy rainfall. Two flashflood mitigation options have been proposed for the purpose of the Project:

 Directing through culverts. Culverts that will pass sediment/debris/flashflood often are designed as box culverts; and  Flashflood control structures such as check dams, debris basins, or hillside ditches.

406. Culverts concrete box culverts are necessary where required openings exceed 4 m2. Previous experience has established box culverts as efficient and easier to maintain. 116

407. Check dams are proposed to reduce flow velocity and control soil erosion by trapping sediment on the upstream side. Hillside ditches are effective in flashflood areas, where the slope is less than 30%. Hillside ditches serve three main functions: to collect and remove surface water, collect debris mass (which is carried by flashfloods) and to prevent flashfloods from adversely affecting road structure. A debris basin is constructed in situations where placed/planned culverts are on the steep slopes. Debris basins can decrease flow velocity upstream at the inlet of culvert, thus preventing clogging of the drainage structures. In addition to these measures, warning signs will be used where appropriate.

408. Drifting snow. In order to minimize the adverse impacts of drifting snow at high-altitude passes of the project area, such as Buraat and Khashaat Passes snow fencing may be used. The proposed design—fencing made from earth—can be observed at Tsagaannuur— Ulaanbaishint area.

7.6 Climate and Air Quality

409. Significant meteorological parameters that have an impact on road users are wind, fog, rainfall, ice and snow. All of these can make driving hazardous and in combination, very dangerous especially at night.

410. Air quality impacts could occur due to construction activities and due to altered traffic patterns and conditions in the operation phase of the Project.

7.6.1 Impacts on Climate and Air Quality

411. Construction Phase - Impacts. Moderate temporary air quality impacts during the construction stage of the Project could be anticipated due to fugitive dust generation in and around construction activities and construction-related activities such as crusher, hot-mix and asphalt plants. Minor increases in the level of nitrogen oxides (NOx) and sulphur oxides (SOx) from construction plant and machinery are expected. Air quality impacts during construction are likely to result from the following sources:

 Emissions from construction machinery and equipment, movement of haulage trucks;  Fugitive dust from earthmoving operations and stripping of pavement;  Increased traffic congestion in construction areas;  During quarrying, borrowing, drilling;  During loading unloading and haulage of spoil for disposal and construction materials from quarries and borrow pits; and  Dust created from the embankment and stockpiles by wind.

412. These construction phase impacts would be localized and temporary.

413. Operational Phase - Impacts. Potential air quality impacts during the operational phase are related to road traffic. Emission of particulates as well as NOx and SOX from the diesel and gasoline engines on the road will increase. However, 2 factors, one specific to the Project will control the impact of this hazard on public health: 117

 the ambient air dispersion in this rural area is at a high level and there is no inversion, and

 the quantity of heavy trucks will be small enough (projected quantity – 117 per day in 2013 and 171 in 2017) that gaseous emissions can be largely assimilated.

414. Moreover, the improved road would reduce dust emissions caused by vehicles on the earth tracks. Further, with an improved road surface, the obstructions to traffic flow would be minimized and fuel consumption and gaseous emissions, such as carbon monoxide and nitrogen oxides per vehicle, will be reduced. While total vehicle emissions would be increased due to increased traffic flow, this is expected to be partially offset by smoother traffic movements.

7.6.2 Mitigation Measures

415. Mitigation – Construction phase. Potential air quality impacts due to the generation of dust and related activities will be mitigated through avoidance strategies combined with construction best practices and monitoring. The civil works contract documents will specify that:

 Asphalt and hot-mix plants will be located at least 500 meters away from the nearest sensitive receptor (e.g., schools and hospitals);  Operators will be required to install emission controls;  Blasting, where necessary (possibly around km 107 from Olgii), will be carried out using small charges, and dust-generating items will be transported under cover; Blasting mats would be employed where necessary;  Contractors will be required to spray road surfaces, excavation and construction sites to keep them moist for dust control;  Trucks carrying earth, sand or stone will be covered with tarps or other suitable cover to avoid spilling;  Potential significant adverse impacts to adjacent residents or site employees during construction will be mitigated by either discontinuing until favorable conditions are restored, or, if warranted, sites may be watered to prevent dust generation, particularly at crusher plants;  Machinery and equipment will be fitted with pollution control devices, which will be checked at regular intervals to ensure that they are in working order. The best available pollution control technologies will be required;  Open burning will be prohibited and requirements for spraying and related dust control measures and the proper use of solvents and volatile materials will be in incorporated in the contract documents; and  Pre-construction monitoring of existing ambient air quality will be undertaken in conjunction with each construction package to provide a baseline for the measurement of air quality impacts during the construction period.

416. Routine air quality monitoring will also be required in areas of high potential impact (asphalt plants, construction camps, etc) during the life of the Project. 118

417. Mitigation – Operation phase. The project road section is likely to continue to operate at well under the design capacity and no significant air quality impacts warranting mitigating actions in the operational phase are anticipated. Further, even with design capacity traffic, enforcing emission standards authorized under Mongolian Environmental Law would alleviate these sources of pollution.

7.7 Surface and Groundwater Hydrology

418. Impacts of water on the road. Water can affect roads in a number of ways including damaging engineering structures such as bridges and culverts, flooding, eroding the road or its shoulders and triggering landslide processes. Mountainous and hilly landscape areas of the road alignment (Shurag River, Buyant River, and Khovd River) results in greater erosion power of rivers as compared with rivers flowing through lowland terrain. These impacts have been addressed under Topography and Soils and Natural Disasters in this section.

7.7.1 Impacts of the Road on Water – Construction Phase

419. Road development can potentially cause contamination of surface/ground water quality or changes in hydrological regime of the area. Obstruction of natural flow patterns of the drainage basins during road construction can result in the rising of the water table on the upslope side and falling on the down slope side. The potential effects of the modification of a water table are flooding, loss of drinking water sources and inhibition of flora growth. Accumulating water flows at certain road locations (for example culverts) can lead to increasing the speed of water flow. This can cause a variety of impacts such as erosion, flooding, siltation.

420. Contamination of rivers and lakes can occur within the construction phase as a result of cut and fill operations, bridge construction, blasting, and accidental spills. The potentially affected rivers are those crossed by the alignment or running in parallel to the road in close vicinity. These rivers include, Khovd, Buyant, and a number of others listed in Section 4- Description of the Environment.

421. As groundwater in the project area is generally relatively deep (> 5m), no impacts to groundwater resources are anticipated in either the construction or operation phases of the Project. No wells/hand pumps are located in the area of potential impact. There will be no net loss of water access points. However, fuel and chemical substances used for road construction could contaminate groundwater and surface water if they are not properly stored and disposed.

7.7.3 Impacts – Operation Phase

422. The road alignment will not directly traverse along surface watercourses during road operations, and as such it is not expected to have significant adverse effect on water quality. However, during road maintenance there could be some temporary impacts on water quality. The mitigation measures for minimizing construction impact mentioned above will be considered for implementation during road maintenance, especially during major road maintenance.

423. Within the operational phase, the proposed improvements to drainage structures will facilitate passage of high flows and reduce bank erosion in the vicinity of the road, ensuring the integrity of the road surface. No impacts on water quality or the availability of water for domestic or agricultural use is anticipated. 119

7.7.4 Mitigation Measures

424. Potential effects to water flow patterns and water quality will be mitigated through a number of prevention strategies such as:

 Number of water crossings will be as minimal as practical;  Using materials excluding fine fractions around watercourses;  Bridge abatements and piers will be designed outside of current water flow; and  Vegetative cover between the road and water bodies.

425. The civil works contract documents will specify that:

 The contractor should develop and implement contingency plans for control of oil and other dangerous substance spills (Spill Management Plan);  Fuel storage, maintenance shop and vehicle cleaning areas would be stationed at least 300 m away from the nearest water body;  Stormwater drainage and retention basins would be constructed and a silt trap (where a river/stream is nearby) would be installed prior to commencement of construction to control runoff water and sediment and prevent entry of contaminants into a water body;  Oil and grease are likely to be discharged in the construction vehicle parking area, vehicle repair area, and workshops. All wastewater would be directed into an oil interceptor prior to discharge; and  Existing water wells and springs would be clearly marked to prevent accidental damage from construction vehicles. 7.8 Noise and Vibration

7.8.1 Noise and Vibration Impacts

426. Noise/vibration is not a significant problem along the route, since it does not intersect any main towns. However, there can be some temporary increases in the noise and vibration levels during the construction phase.

427. Impacts during Construction. The major sources of noise pollution are movement of construction vehicles, the haulage of construction materials to the construction site and the noise generating activities at the site itself. Concrete mixing and material movements are the primary noise generating activities and will be uniformly distributed over the entire construction period. Construction activities are expected to produce noise levels in the range of 80-95 dB(A). The major works will be carried out during the daytime. The noise produced during construction will however not have significant impacts on the existing ambient noise level, if proper mitigation measure will be followed.

428. Operation Noise/Vibration Impacts. Visual surveys for sensitive receivers within the project area did not indicate sensitive areas along the alignment. Further, the limited intensity and magnitude of projected traffic would not generate significant noise levels. 120

7.8.2 Noise Mitigation

429. Construction noise mitigation. Project contract documents will specify that noise impacts during the construction phase. The contract documents will include the following measures:

 Source controls. All exhaust systems will be maintained in good working order; proper shields, shrouds, and intake and exhaust mufflers will be employed, operation of machinery will be at minimum power, and regular equipment maintenance will be undertaken. All blasting operations should be carried out with limited size charges, and blasting mats used where appropriate.  Construction site controls. Stationary machinery will be placed as far away from sensitive receptors as practical.  Time and activity constraints. Operations will be scheduled to correspond with periods when people/wildlife would least likely to be affected. Construction activities should be prohibited from April 15–June 15 near Tolbo Lake (Associated Project).  Community awareness. Public notification of construction operations will incorporate noise considerations; information procedure of handling complaints through the Grievance Redress Mechanism will be disseminated. Sensitive receptors will be avoided as far as possible. Disposal sites and haulage routes will be coordinated with local officials.  Baseline and routine noise monitoring. Pre-construction monitoring of existing noise will be undertaken to provide a baseline for the measurement of impacts during the construction period. Routine monitoring will also be required in areas of high potential impact as specified in EMP, during the life of the Project. 7.9 Solid Waste

7.9.1 Impacts of Solid Waste

430. The following are the impacts of solid waste on the environment:

 Degradation of the aesthetic quality of the environment;  Decreasing the land use potential;  Formation of toxic by-product as a result of decay;  Potential risk of injury for human beings and wildlife; and  Organic waste could assist breeding of disease vectors.

7.9.2 Mitigation Measures

431. Construction Phase. The civil works contract documents will contain provisions requiring:

 Construction of temporary points for collection and disposal of waste and garbage;  Fencing the construction area (if needed); 121

 Reinstatement of lands after completion of construction works; and  Construction of sanitation facilities for construction employees.

432. Operational phase. Mitigation measures for operational phase include:

 Construction of rest points and parking areas with solid waste bins;  Road signs; and  Awareness campaigns.

7.9.3 Biological Resources

433. Biotic components such as flora, fauna and biodiversity conservation are important considerations in assessing environmental impacts of any infrastructure development project. Detailed consideration is given to ecological resources in the development of the Project in order to avoid or minimize adverse impacts on fauna, flora and important ecosystems.

7.10 Flora

7.10.1 Impacts on flora

434. Field investigations and public consultations have established that there are no threatened or endangered flora species located within the road construction area. Therefore, no adverse impact on such species is likely to occur during the construction activities. Plant species located within the multi-track road corridor are native species, which are highly tolerant of grazing, compaction, and other physical disturbances. No trees were found close to the right of way (ROW) though some trees such as poplar and willow were reported only at a distance. Moreover, construction of the paved road will have a moderate positive impact on flora by avoiding the use of multiple earth tracks that affect flora. And proper location of construction camps and other ancillary features will contribute to minimization of impacts on flora.

7.10.2 Mitigation

435. No additional mitigation related to flora is considered necessary in all road sections.

7.11 Fauna

7.11.1 Impacts on Fauna

436. Habitat loss/gain. No significant habitat loss is anticipated; moreover, habitat gain is anticipated as a result of construction of an asphalt road instead of multiple earthen tracks running in parallel throughout the width of a valley. This fact was noted during public consultation workshops and consultations with experts.6 The borrow pits are limited to designated sites in this EIA, and quarries will be limited to licensed areas previously used.

437. Habitat Fragmentation and Wildlife Migration Patterns. The project area is entirely located within Altai Sayan Eco-Region included in WWF's "Global 200" list of virgin or little changed eco- regions in the world. Habitat fragmentation may impact on the region’s untouched or little changed ecosystem without adequate measures. Habitat fragmentation occurs when a road cuts through an ecosystem. The sum of the parts created may be less than the value of the initial whole, even

6 Govt of Mongolia. 2007. EIA. Ulaanbaatar. 122 when the habitat lost is negligible. Most animal species tend to follow established patterns in their daily and seasonal movement patterns. A road blocking a wildlife corridor may result in constraints on wild life movements because animals are reluctant to cross the road, increase in mortality due to collisions, or delay in migration patterns. Potential wildlife crossing zones identified by experts of Specially Protected Area Administration Department in Bayan-Olgii, the WCS and the WWF Mongolia Programme Office are shown in Figure 30.7

438. A detailed survey of wildlife crossing zones is designed as a part of the Project and for this the capacities of the Specially Protected Area Administration Departments in Khovd and Bayan-Olgii be increased through the supply of the fauna monitoring equipment and 2 vehicles. Funding for capacity development is provided under environmental management costs (see section 11: Environmental Management Plan).

439. Discussions with experts of Specially Protected Area Administration Department in Ulaanbaatar and Bayan-Olgii, WCS and WWF and observations during field trips8 provide evidence that the magnitude of adverse impacts to wildlife patterns will likely to be insignificant9 because (i) although the traffic volume is presently low, the existing alignment sections which are on earthen multi-tracks will reduce the impacted area; (ii) the projected volume of traffic is quite low: less than 700 vehicles per day by year 2013 and a bit more than 2,000 by year 2022. Such traffic intensity will have only minor effects on fauna and migration patterns; and (iii) Construction activities will be short-term and provided mitigation measures will be implemented, there will not be any substantial negative impacts.

Figure 30: Migration Patterns of Wildlife in the Project Area

Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

440. Poaching. In the Project Area poaching presents a threat to wildlife along with natural factors such as unfavorable weather conditions (severe winters and dry summers), and food

7 Ibid. 8 Ibid. 9 Ibid. 123 shortage. The high demand (the assessment is between 6,000 and 10,000 kg of horn per year)10 and ever-increasing prices for Saiga horn in China, high poverty in regions where Saiga are found and limited resources in combating poaching and smuggling, when combined with enhanced road accessibility to Saiga populations create a potential for adverse impacts.

441. Aquatic Fauna. No substantial impacts on aquatic fauna are anticipated. Although the road passes close to a few lakes near Hongio Olon river 95–105 km from Olgii the impact of the road on the lakes and its aquatic fauna will not be significant, if the measures to prevent water pollution and siltation given in the EMP is implemented during construction and operation. The road, nevertheless, can be a source of river pollution during construction or in case of accidents with oil products or other hazardous substances during construction and operation.

442. Habitat Fragmentation and Wildlife Migration Patterns. A number of preventive and mitigation strategies11 that have been considered to reduce habitat fragmentation and avoid wildlife migration patterns by the EIA: 2007 and experts of the Department of Administration of Specially Protected Areas, WWF and WSC, includes:

 Prevention (“no road construction” option, changing the route, putting the road underground, etc.); and  Mitigation (perforation of the road corridor with underpasses, overpasses and at grade crossings, reflective wildlife studs, warning signs, etc).

443. The selection of mitigation measures are based on the following:

 Wildlife overpasses (ecoducts) are effective, but expensive solutions that are not likely to be suitable for the purposes of the Project due too low cost- benefit ratio and lack of detailed information about wildlife migratory patterns and behavior of animals, and also low traffic.  Wildlife underpasses are a less effective, but less costly solution when compared with overpasses. The efficiency of underpasses for the Project was questioned by WWF and WCS during Project consultations.12 The projected, relatively low volume of traffic during first 10–15 years of the road operation will likely make underpasses inefficient. Additional studies are planned within the frame of the Project in regard to migratory routes and behavior of wildlife in the Project Area. The studies will be carried out by Departments of SPA of Khovd and Olgii during the construction and operational phases and findings passed on to PIU.  At-grade crossing is an inexpensive alternative to other wildlife crossing structures such as wildlife pipes or culverts and also wildlife underpasses or overpasses. It is typically recommended for low traffic volumes.  Wildlife warning reflectors. In principle, wildlife reflectors are not designed to prevent animals from crossing roads, but to interrupt traffic until animals have passed. Therefore, they are effective at night and on roads of low traffic volume. Wildlife reflectors provide an inexpensive solution in comparison with continuous wildlife fencing. They do not reflect light back to

10 Government of Mongolia. 2007. EIA. Ulaanbaatar. 11 Government of Mongolia. 2007. EIA. Ulaanbaatar. 12 Ibid. 124

a driver, are activated only when a vehicle is approaching, simple in installation and maintenance, and are suitable for most terrains.

444. Thus, overpasses, underpasses and at-grade crossings were assessed as expensive or potentially ineffective structures for the Project, at least in the initial stage of operation. The projected volume of traffic does not warrant recommending these measures. Therefore, the proposed complex of mitigation measures will include:

 Using warning signs and wildlife reflectors in the initial stage of the project operation phase;  Capacity building of the Administrations of Specially Protected Areas in Khovd and Bayan-Olgii aimags. They will be responsible for collection of additional information on wildlife migration routes and behavior of animals to provide recommendations on feasible mitigation measures when the traffic increases in close cooperation with WWF and WCS; and  As traffic volumes increase, the database should be sufficient to provide a framework to assess whether additional mitigation measures (e.g., overpasses, underpasses) are warranted.

445. Anti-Poaching. Despite local environmental protection authorities and international organizations making a major effort to control poaching in the Project Area, their success is still limited. Improved accessibility as a result of road construction will require additional measures to be taken. The mitigation measures will include two major strategies:

 Strengthen anti-poaching units. This task is currently addressed by WWF with assistance of other NGO’s.  Preventing illegal trade. The capacity of Customs at Russian/Mongolian border and especially Mongolian/China border should be strengthened not to allow poachers and illegal traders to smuggle Saiga horns, skins of rare animals, and other animal products. The training course for customs and border officers should include such issues as Saiga illegal market, identification Saiga horns, revealing illegal traders and creating awareness.

7.12 Protected Natural Area

446. Tsambagarav National Park although 11 km away from the road the park may be indirectly affected by the proposed Project. There will be no direct impacts to this park. The magnitude of impacts during the operational phase has been assessed to be negligible due to the low intensity of traffic.

447. The road can potentially cross wildlife migratory routes, among these are Khashaatyn Davaa and Buraatyn Davaa passes. Indirect impacts as effect on wild life migratory routes can be mitigated by above stated mitigation.

7.13 Relocation

448. No permanent structures including houses have been reported from the ROW or close to the ROW. Stone structures that can be disassembled and rebuilt could be located close to the ROW in the interim period between this report and construction. However, the impermanent 125 nature of these structures facilitate these being relocated further back from the alignment without any significant impact.

7.14 Non-transport Infrastructure

7.15.1 Potential Impact

449. Potential impacts to non-transport infrastructure include:

 Water Supply Systems. The Project will have no direct impact on area water supply systems.  Sewerage Systems. The Project will have no direct impact on sewerage systems.  Energy Systems. The Project will have no direct impact on area energy systems. The coordination with local authorities will be required where construction works can affect power lines close to town areas.  Waste Disposal. Potential waste disposal impacts could occur due to the improper disposal of construction waste, waste oil and solvents, and human waste from construction camps.

450. Mitigation. Mitigation related to potential non-transport infrastructure has been assessed as follows:

 Water Supply Systems. Project contract documents will contain provisions requiring pre-construction monitoring of existing water quality to provide a baseline for the measurement of impacts during the construction period. Routine water quality monitoring will also be required in areas of high potential impact (river crossing sites, construction camps, and other areas with potential to contaminate runoff) during the life of the Project.  Sewerage Systems. None required other than coordination with local officials.  Energy Systems. None required other than coordination with concerned officials.  Waste Disposal. Contractual requirements for the Project will include enforceable provisions for the proper disposal of waste. Implementation and enforcement of the provisions will be the responsibility of the Supervising Engineer.

451. Site-specific considerations. No site-specific measures with regard to infrastructure beyond those recommended for incorporation in the Project and detailed above are required.

7.15 Transport Infrastructure

452. Potential impacts on transport infrastructure. There will be some impact on road transport during the construction period due to detours and traffic inconveniences. After construction, the primary transport impact of the Project will be improving the performance of the transport sector and greatly facilitating the flow of traffic, goods, and travelers. 126

453. Mitigation. Contracts will specify roads that care must be taken during the construction period to ensure that traffic disruptions are minimized. No mitigation actions related to transport, other than those actions already incorporated in the Project, are required.

7.16 Historical and Cultural Heritage

454. Potential impacts on historical and cultural heritage. Some impacts on archaeological and cultural heritage locations could be encountered during the construction period, especially if new sites are encountered during construction.

455. Mitigation. The contractor will prepare a Cultural Heritage Management Plan to manage any sites that may be encountered during construction. If a historical, cultural, or archaeological relic is encountered along the Project corridor, all construction activities will halt and the established action plan will be implemented (notification of soum/district governor, Institute of Archaeology, and local police). Work will recommence only after appropriate measures have been taken as requested by the appropriate authorities and confirmation is received that work may resume.

7.17 Health Issues

456. Health Impacts. Human health risks associated with the Project during construction or operation phases can include:

 Facilitation of the transmission of diseases. During construction, there will be an increased risk of work crews spreading socially transmitted diseases such as HIV/AIDS. Improvement of the road section and the resultant increase in traffic densities would supply improved conduits for the transmission of such diseases.  Contamination of local water supplies. Potential impacts to local water supplies include the possibility of contamination by the water supply and wastewater disposal systems associated with the labour camps during the construction period. Contract provisions to ensure that these facilities are properly sited should be incorporated in all Project bid documents.  Air quality decline. No significant impacts on air quality and consequently public health are anticipated from the Project. The construction of the paved road will contribute to decreasing dust concentrations in ambient air.  Noise Pollution. No significant impacts on sensitive receptors with health consequences are anticipated.  Safety. Improved road will result in increased traffic speeds. Engineering efforts has been undertaken to reduce the likelihood of accidents and users will be educated about the risks of high speed. Traffic laws will be enforced.

7.18 Construction Camp Impacts and Management

457. Potential effects of construction camps are competition for local sources of water, sewerage facilities, energy systems; solid and liquid waste generation, poaching and illegal trade, spilling of lubricants, hazardous materials, etc. Before the construction activities will commence the contractor will prepare and submit a Construction Camp Management Plan that will propose preventive/mitigation measures for environmental impacts of the construction camp, 127 construction yard including fuel storage, filling station and vehicle washing sites.

7.19 Associated Sections

458. The EIA for a total of 784.4 km of Western Regional Road was prepared and approved by the Government of Mongolia in 2007. The project road is part of the Western Regional Road as in Figure 6. Sections in the Western Regional Road other than the project section are considered as associated sections. The associated sections environmental adverse impacts will be reduced to the acceptable level if mitigation measures in the Western Regional Road EIA are implemented.

459. Tolbo Lake IBA. The Western Regional Road EIA has provided measures to mitigate environmental impacts on the Tolbo Lake IBA. The Government of Mongolia constricted a gravel road for the section taking measures in the EIA in 2009. The section will be paved in future.

460. The distance from the road to Tolbo Lake is between 400 m and 1,000 m as shown in Figure 31. The center of the IBA is located in northeast portion of the lake; therefore direct impacts on birds such as noise and physical disturbance are possible during construction and operational phases.

461. The magnitude of impacts during the operational phase has been assessed to be negligible due to the low intensity of traffic. Pavement works’ impacts will be short-term and will be mitigated as discussed below. Poaching and illegal fishing are other impacts that should be taken into consideration during operation. The pavement works in the vicinity of south-east part of the lake will be limited to a period approximately earlier than 15 April or later than 15 June. The Government of Mongolia ensures this arrangement.

Figure 31: Location of Tolbo Lake IBA and the Road

To Project Road

Existing Gravel Road: Constructed and to be Paved by the Mongolian Government

Source: Government of Mongolia. 2007. EIA. Ulaanbaatar. 128

7.20 Cumulative and Induced Impacts

462. By expanding the temporal and spatial dimension of the proposed project’s planning horizons, it is possible to visualize a number of cumulative impacts. Given below are events that may cause cumulative impacts:

 Among induced impacts of the road development is the expansion of tourism and construction of corresponding tourist infrastructure. Despite the seasonal character of tourism in the Project Area, inflow of a greater amount of tourists with the construction of the road can generate additional impacts to the Altai Eco-region. Therefore, the development of a middle term program of tourism sector development in Mongolian part of the Altai Eco-region, considering the current Project, is desirable.  Just after the road opening, induced impacts due to tourism development will be minor because of the estimated traffic volume, less than 1,000 vehicles per day, which was estimated taking all current feasible development potentials. For adverse induced impacts prevention, the government role is important. Local and the central governments should prudently assess new area development plans according to the Mongolian laws and regulations.  Due to the level of estimated traffic volume, cumulative impacts will be minor within the traffic volume estimation period, unless premises for the traffic volume estimation are changed.  Synergetic impacts of global warming and anthropogenic effects on permafrost areas (construction of the project road). As was mentioned above, since 1940, the average annual air temperature in Mongolia has increased by 1.9° with the warming trend higher in mountainous areas (2.0– 3.7°С). Poor road construction practices in permafrost areas within the background of this global process can cause increased degradation of permafrost and development of dangerous process such as thermokarst. Careful engineering design of the road in permafrost areas to avoid disturbing the existing heat exchange equilibrium and a detour of thermokarst topography should be applied.  Mongolia has rich mineral resources and exploitation of these has been increasing while there are yet very few mining in project area. If a new mining area is found in the area, the Government will carry out its environmental impacts according to the law and regulations. In addition, the road structure will be improved to protect environment if necessary.

463. On the other hand, the construction of the road may result in positive cumulative impacts. For example, multiplicative effect of erosion caused by earthen multi-tracks and overgrazing in foothill areas is expected to be substantially reduced with the construction of the paved road.

7.21 Possible Change in Alignment

464. In case of possible change in alignment, the following measures will be taken. For a minor deviation, the environmental management consultant will propose mitigation measures and incorporate these into the detailed design. In case of a major deviation that may cause significant environmental impacts or affect additional people, the MRTCUD will conduct 129 additional environmental assessments, including public consultations. The revised EIA will be submitted to MEP for review and approval, following government procedures. Then, the MRTCUD, in consultation with ADB, will determine whether the deviation is minor or major. 130

8. ECONOMIC ASSESSMENT

465. In preparing this assessment data form the Preliminary Environmental Assessment1 and the EIA: 20072 were utilized, in conjunction with project specific environmental cost estimates and benefits. The benefits and costs identified in the environmental assessment process are presented below for comparative analysis. It may be noted that not all the benefits has been expressed in quantitative or monetary terms.

8.1 Environmental Protection Investments

466. The economic internal rate of return (EIRR) of the Western Regional Road corridor project has been estimated to be 16% p.a., far above the accepted 12.0% threshold.3

467. ADB funding identified for the Project is currently limited US$45 million of which US$35 million is a grant.

468. The total non-recurring environmental cost estimate is US$296,100 as shown in Table 60.

Table 60: Environmental Costs of the Project Item Unit Quantity Unit Cost Costs ($) A. Mitigation 1. Dust control day 360 200 72,000 2. Drifting snow fence m 500 8.2 4,100 3. Sanitation at construction camps lump sum 25,000 4. Reflective road studs (wildlife warning km 30 100 3000 reflectors) 5. Air pollution control equipment lump sum 20,000 6. Blasting mats lump sum 10,000 7. Protection of drinking water sources lump sum 2,000 8. Solid waste management lump sum 10,000 Subtotal (A) 146,100 B. Monitoring 1. Lab and field monitoring equipment  Air quality measurement lump sum 30,000  Noise measurement lump sum 25,000  Water quality measurement lump sum 30,000 2. Ecological monitoring (Capacity building of Administration of SPA) lump sum 50,000 (equipment + vehicles) Subtotal (B) 135,000 C. Collection of Detailed Information Public consultation on EMP Implementation lump sum 5,000 Grievance Redress Lump sum 10,000 Subtotal (C) 15,000 Total 296,100 Source: TA Consultant’s Report. TA 7449-MON: Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

1 ADB TA 4643-MON Prefeasibility Study of the Western Region Road Corridor Development Project. 2 Government of Mongolia. 2007. EIA. Ulaanbaatar. 3 Ibid.

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8.2 Environmental Costs

469. The environmental costs of the Project are summarized in Table 52 above. The costs include mitigation measures, monitoring, collection of detailed information and capacity building.

8.3 Environmental Benefits

470. Environmental benefits associated with the Project are related mostly with regaining pastureland, decreasing the incidence of erosion processes, reducing dust and noise, decreasing the number of vehicle breakdowns, and reducing vehicle fuel use and emissions.

471. Pastureland regained. Table 61 provides an assessment of the amount of pasture land regained as a result of the elimination of earth tracks. The assessment is prepared for multi track areas of the road section.4

Table 61: Assessment of Land Regained with Elimination of Multitracks Estimated average Average Estimate of total Length of multi-track number of width of all Land regained land regained, Section (km) tracks tracks (m) (ha/km) (ha) Khovd - Olgii 90 20 100 10 900 Note: With the assumption that the width of track is 5 m. Source: Government of Mongolia. 2007. Feasibility Study EIA. Ulaanbaatar.

472. Reduction in erosion. As mentioned above, the presence of earthen multi-track leads to erosion of pastureland and thermal erosion processes especially in areas with rolling topography or permafrost. Olonuur (an area of many lakes between Khovd and Olgii) is one of the identified areas where the elimination of multi track can stop triggering erosion processes.5 However, a quantitative assessment of this benefit has not been attempted due to lack of data.

473. Dust and noise reduction. A great quantity of dust in is generated by vehicles traveling on the earth roads. Although, it is difficult to quantify the amount of dust generated by existing traffic, it is anticipated that the paved road will significantly contribute to the reduction of dust generation. It is anticipated also that there will also be some decrease in noise pollution per individual vehicle due to improvement of physical characteristics of road surface and road geometry.

474. Vehicle breakdowns. It is anticipated that the number of vehicle breakdowns occurring along the project road will decrease as a result of improved road conditions. A smoother road will reduce vehicle operating costs and the availability of rest areas will avoid accidents due to fatigue.

475. Vehicle emission and fuel consumption reduction. Decrease in vehicle emissions and fuel consumption per vehicle are expected as a result of improving the physical characteristics of road surface and road geometry. Travel times between locations will decrease, thereby lowering the overall amount of vehicle emissions and fuel consumed.

476. Table 62 presents the environmental cost benefit analysis.

4 Government of Mongolia. 2007. EIA. Ulaanbaatar. 5 Ibid.

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Table 62: Environmental Cost and Benefit Analysis No. Environmental factors Impact, mitigation measures and investment Benefits 1 Ambient air and acoustic Noise and air pollution decrease along the road section +1 environment 2 Water quality Negative impact on water quality during construction but positive +1 impact during operation 3 Population Health No significant adverse effects and convenient travel conditions +1 providing better access. 4 The people's living standards Providing job opportunities and improving the local people's living +1 standards 5 Plants and animals Negative impacts of poaching and safety risks at wild life crossings -2 6 Nature Reserve Area No significant adverse effects 0 7 Historical/Cultural and Scenic No significant adverse effects but convenient travel conditions +1 sites contributing to improved tourism 8 Urban planning No significant adverse effects but conditions contributing to the +1 development of cities and towns, and society 9 Beautifying of landscaping No significant adverse effects; increasing investment in environmental 0 protection and improving the environmental quality along the highway. 10 Land value Convenient traffic conditions are conducive to drive the value +1 increment of the real estate, commercial and industrial land along the highway. 12 Direct social benefits Mileage shortening, travel time saving, transportation cost reduction, +1 fuel consumption reduction, safety improvement, etc 13 Indirect social benefits Improving the investment environment, promoting the economic +1 development and enhancing environmental awareness. 14 Environmental protection Increasing the investment in the project and reducing adverse effects. 0 measures Total Positive benefits:(+9)；negative benefits:(-2)； positive benefit / negative benefit =4.5 Notes: Score 1 and 2 points respectively based on the impact significance. “+”represents positive benefits and “-” represents negative benefits. Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

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9 PUBLIC CONSULTATION AND INFORMATION DISCLOSURE

9.1 Stakeholder Workshops

477. Two rounds of public consultations have been held for the entire road corridor of the Western Regional Roads Project during the preparation of the EIA in 2007.1 These consultations were conducted for the full 748.4 km length Western Regional Road corridor. These were held mainly in Khovd and Oligii and included public from the project affected area of the present project from Khovd to Buraatyn Davaa. The details of these early rounds of public consultations as documented in EIA: 2007, are given below. Further consultations are planned after detailed design, before commencement of construction.

478. The first round of consultations was organized in Khovd and Bayan-Olgii aimags on 24 and 27 March 2007, respectively. The stakeholders included local administration, environmental authorities, representatives of specially protected areas, NGOs, international organizations, environmental inspectors, and other concerned individuals. About 40 people actively participated in the workshops. The stakeholders provided a number of useful scoping recommendations and additional published and unpublished sources on biophysical and socioeconomic resources.

9.2 First Round

9.2.1 Khovd

479. The second round was organized in Khovd and Bayan-Olgii aimags from 26 to 30 May 2007 (Bulgan – May 26, Most – May 28, Manham – May 28, Khovd – May 29, Olgii – May 31, and Tsagaannuur – May 30) after draft versions of EIA/SEIA2 reports were prepared and the SEIA report was distributed to the stakeholders in Khovd and Olgii. The stakeholders included local administration, environmental authorities, representatives of specially protected areas, NGOs, international organizations, environmental inspectors, and other concerned individuals. In total about 280 people participated in the second round of workshops. The stakeholders provided their comments to the EIA document and provided a number of additional useful recommendations on the project.

480. Some 25 persons representing local government officials, Government environmental, infrastructure and inspection organizations, NGO’s, representatives of Khovd University and the general public attended the Khovd workshop. Discussions took place on a range of issues associated with the type of EIA, and the alternative alignment for Khovd town.

481. There were 13 written responses from the participants. Of these, 7 were comments on environmental and socio-economic benefits of the road in this remote region and on improvement of trade and cooperation with neighboring countries. The development of the aimag is highly dependent on infrastructure development. Two proposals were recommendations to assess a population of Mongolian Saiga that occur in Manhan Nature Reserve prior road construction.

482. Concern was also expressed on the general lack of road project information and information on whether the proposed road would run through Khovd town. The opinion was that

1 Government of Mongolia. 2007. EIA. Ulaanbaatar. 2 Ibid. 134 if the road will pass through the town, resettlement will pose a serious issue. A few people mentioned some negative environmental and social impacts related to poaching and increasing number of crimes, and recommended protection and prevention measures to be taken. It was also mentioned that construction of the road in the Altai–Sayan Ecoregion from Mongolian side will present less negative impacts on bio-resources as compared with road construction in China and Russia.

9.2.2 Olgii

483. Sixteen persons representing government officials, government environmental and inspection organizations, and NGO’s participated in the Olgii workshop. Discussions took place on a range of issues associated with the proposed road alignment, alternatives and their lengths, construction priority of the road sections, EIA, current condition of quarries and their rehabilitation, special protected areas along the road, and migratory routes of ibex and wild sheep.

484. There were 13 written responses from the participants. Of these, 8 were comments on environmental (land decline and degradation) and socio-economic (reduction of unemployment, saving money and time, development of tourism and other infrastructure) benefits of the road in the aimag.

485. Since the road crosses migratory routes of animals inhabiting national parks, the major issue raised was the location of the road in the vicinity of Tsambagarav National Park and between Siilkhem National Park areas (A) and (B). Four provided recommendations on mitigation measures such as constructing embankments on the same level as the land surface near NP’s, or designing underpasses, providing information and warning signs at the entrance and exit of the buffer zone of NP’s, and avoiding rest areas in buffer zone of NP’s.

9.3 Consultations with Government Officers and Experts

486. The participants expressed their concern about current usage of construction materials by road construction companies, desertification and land degradation. Several contributors proposed that trees and bushes be planted along the road. Also there was a proposal to construct first the Khovd-Olgii section, as Khovd is the center of the Western region. Another comment was that the construction practices in proximity to environmentally sensitive areas should be flexible enough to not to have adverse impacts on fauna. For instance, the construction of the road near Tolbo Lake should not be planned from April to June, because this is a period of bird breeding near the lake.

487. A separate set of consultations was organized with officers of the Ministry of Nature and Environment, the local administration of specially protected areas, experts of local and Ulaanbaatar office of Altai Sayan Ecoregion project, local environmental authorities, specialists of WWF and WCS in Mongolia, and local scientists. Sensitivity of ecological resources, possible migration routes of wildlife and correspondent prevention/mitigation measures were discussed. Maps of the existing and planned protected areas were passed over to the environmental team of the Project.

488. Local governors and environmental inspectors were consulted at every soum along the road. Baseline information on flora, fauna and archeological findings as well as other comments on potential environmental impacts of the road during design, construction and operational phases was recorded. 135

489. Additionally, 38 local people were interviewed along the road. First-hand information about wildlife, its habitats and migration routes, archeological and cultural heritage, other environmental resources was obtained. All of them have supported the construction of the road.

9.3.1 Khovd

490. Some 18 persons representing local government officials, government environmental, infrastructure and inspection organizations, NGO’s such as WWF and Altai-Sayan Eco-region project, and representatives of Khovd University attended the Khovd workshop. The topic raised during workshop discussions were related to socio-economic benefits of the road, access roads, environmental impacts and mitigation (Manhan Nature reserve and census of the population of Mongolian saiga tatarica, aimag level protected areas), and archeological and historical sites.

491. There were 11 written responses from the participants. Of these, 5 were comments on the socio-economic benefits of the road in this remote region and on improvement of trade and cooperation with neighboring countries. The development of the aimag is highly dependent on infrastructure development. Four proposals recommended conducting more detail survey in order to not affect endangered species in NR’s and NP’s. Two of them recommended avoiding archeological sites and very careful blasting in Bodonch. There were also suggestions about the adjustment of the construction schedule in Bodonch canyon to fit the migratory schedule, employment of local workers, meet the highway standard, payment the royalty of construction materials, planting trees along the road, and requirement of general and detail EIA’s that have to be done before commencement of civil work.

492. Discussions were also focused on archeological sites, Manhan NR / Saiga, and other environmental impacts. During the discussion archeological lecturer of Khovd Univerisity indicated that the amount of archeological data in this aimag is not sufficient. They have just started to register cultural and historical heritages of the aimag in 2005 and it is not yet finished. WWF experts also mentioned that they have done a census on the population of saiga in Sharga and Manhan NR, together with Academy of Science in January of 2007. During the census, ,2,860 saigas were counted in Sharga and Mankhan NRs, Of this number, 15-17 saigas were counted in Manhan NR. They do this kind of census every 1.5-2.0 years and suggested building a road with a lower embankment within the NR to enable Saiga to cross it safely. They pointed out that positive impact on Saiga could result from the replacement of 260 earthen roads with one paved road as well. There are two aimag level protected areas in proximity to Bodonch Canyon. Their boundaries have not been set yet.

9.3.2 Olgii

493. Sixteen persons representing government officials, government environmental and inspection organizations, and NGO’s participated in Olgii workshop. The list of participants is presented in Appendix E. Discussions took place on a range of issues associated with the draft EIA report, a list of monitoring equipment included in EIA report, capacity of the equipment and human resource, responsibility of monitoring and supervision of organizations, current condition of quarries and their rehabilitation, and waste.

494. There were 8 written responses from the participants. Of these, 4 were comments on the socio-economic (reduction of unemployment, saving money and time, development of tourism and other infrastructure) benefits of the road in the aimag. They indicated the need to increase the number of rangers in NPs and NRs, to involve the local protected area specialists in detailed EIA study, and more precise and professional equipment such as binoculars with night vision, 136 professional digital photo and video camera, for monitoring the animal migratory ways. They asked to receive equipment for monitoring endangered species like ibex, argali and snow leopard and want that the rangers to be trained on how to use that equipment. Some of the recommendations were about the many lakes area lakes between Khashaat Pass and Buraat Pass, to facilitate with drainage system along the road within Olgii town, to design overpasses at migratory ways and lower embankment for small mammals, and to avoid the geodesic reference points.

9.4 Other Public Consultations

495. A separate set of consultations (at Yarant border, Takeshiken border, Bulgan soum, Most soum, Manhan soum, Khovd town, Olgii town, Ulaanbaishint border, Tsagaannuur village) were organized in addition to the meetings in Khovd and Olgii.

496. During the meetings at Mongolian/Chinese and Mongolian/Russian borders, the custom officers were asked to share their opinion about illegal poaching and trade, capacity to detect and release the pieces of endangered species such as saiga horn and whether they need training on that. Cases of poaching and illegal trade have not been registered over the last several years. CITIES organizes a series of training for the custom officers once every two years.

497. During these meetings the major goal was to gather public opinion about negative environmental impacts and mitigation measures. The great bulk of responses were ‘No environmental impacts’, with the exception of Tsangaannuur village. During the meeting in Tsagaannuur, the residents mentioned to take into account the only source of the potable water for a village that may be affected by construction. It was pointed out that the hydrological conditions may be modified as a result of construction activities and amount and quality of water will decrease.

9.5 Consultations within the Project Area

498. During the preparation of this EIA the consultants conducted public consultations and discussions with PIU and local government authorities. Public meetings were conducted in Khovd and Olgii aimags while officials from both aimags, and soums and baghs in Olgii were also consulted.

499. On 02 June 2010, the Governor of Khovd aimag was shown the design alignment and his views on the alignment and its development was taken into consideration. He was also consulted on the three alternatives to the design alignment in the area. The representatives of relevant Departments in Khovd aimag were consulted (03 June 2010) with regard to planning and implementation of road projects.

500. The Governor of Khovd was of the view that the design alignment did not have major impacts and would benefit Khovd aimag. However, at the field visit after the discussion three other alternative alignments were inspected to assess whether there were other suitable alignments. The general view after the field visit was that from all the alignments the design alignment was preferred.

501. During the discussion with aimag government department representatives, the representatives were of the view that apart from contributing to social and economic development, other development would follow the road development and therefore rehabilitating 137 the road would be very significant. They also expected the developed road to play an important role not only in domestic but also foreign relations and cooperation in regard to exports as well as tourism.

502. On 3 June 2010 community in a ger camp in Khovd area was consulted in regard to impacts of the road Project. The community members were given the details on the Project alignment and other details of potential impacts of construction works. All of the ger community present considered the development of the road as very important and considered the impact on air and water as insignificant. They maintained that it would facilitate their animal husbandry and obtaining vegetables. It would also assist their access to medical facilities at the Provincial center 25 km away. Even though the community had few vehicles, they expected that public transport would be available subsequent to development of the road. They were also willing to participate in construction work of the road. They also requested that crossings be provided to assist their herds to cross the road.

503. Community in Hongor Ulun Bagh and the Governors of Hongor Ulun bagh, and Tolobo soum were consulted along with State Environmental Inspector of Tolbo soum (20 June 2010) in regard to alternative alignments in the lake area.

504. The community members and the officials were provided with details of the alignment traversing the lake area. All community members who participated in the meeting were in agreement/understanding that there was a need for change of alignment in the Lake area and were of the opinion that the design alignment may negatively affect the Lakes.

505. After the meeting the soum and bagh Governors and State Environment Inspector based in the Tolbo soum and the community made an inspection of the alternative alignment (Alternative 1) and a newly identified alignment (Alternative 2). Local authorities and local community members explained that Alternative 1 which bypasses Lake area on the northern side traverses on swampy areas and close to two springs. They believed that the springs could dry up. The general view of th community and the officials was that Alignment alternative 2 would be of less adverse impacts.

506. Tolbo Soum Governor, Ms.Kh.Saulesh, also presented an official letter containing the wish of the local authorities and people to change the existing design alignment to the new alignment (Alternative 2) identified by them.

507. Further, public consultation and information dissemination will be carried out by the Consultant as part of the socio-economic surveys planned to be conducted in July 2010.

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10. GRIEVANCE REDRESS MECHANISM

10.1 Introduction

508. Every effort was taken to facilitate and encourage public participation in the preparation process of the Environmental Impact Assessment (EIA)1 during the Feasibility Study for the Western Regional Road Corridor and in preparing the present EIA for the road section from Khovd to Buratin Davaa. Further, the public will also be encouraged to participate in monitoring the implementation of the EMP during the construction phase of the Project. Nevertheless, unforeseen problems and issues may still arise due to construction and operational impacts. Therefore, to resolve thesem in a timely manner and to the satisfaction of the affected people (AP) and ensure a smooth and uninterrupted construction process, the following mechanism has been developed. By this mechanism AP grievances will not only be streamlined and recorded, the complaints will also be addressed efficiently and quickly.

10.2 Current Practice

509. Under the current system (Figure 32), when people are affected by project activities they can complain to the contractor, local Governor’s office, Environmental Department (ED) of the local government, the Implementing Agency in this case PIU/Department of Roads (DOR) or court of law. Among the agencies involved, the local Environmental Department is the most accessible and has a leading coordination role in dealing with environmental complaints.

Figure 32: Existing Complaints Handling System

510. The affected people tend to direct their complaint to the contractor, PIU/DOR or the executing agency-the Ministry of Roads, Transport, Construction and Urban development (MRTCUD), local government, or the environmental department of the local government authority, be it the aimag, soum or bagh, before they finally appeal to the court. APs usually complain to the contractor or the Supervising Engineer (SE) in the first instance if they are convinced that the problem is construction related. In case the contractor's response is unsatisfactory, they would inevitably proceed to the local government authorities. However, being not directly involved in the construction activities of the project, it is generally difficult for the local government authorities to comprehend the actual ground situation. Even if the complain is directed to the local environmental department, the department will need to conduct their own investigations which will delay redress. Further, it may be difficult for the department to affect a solution as the two parties, the complainant and the contractor, may not agree on the problem and therefore on the rectification recommended by the department. It is possible that the department could make erroneous decisions due to their poor grasp of the facts and the

1 Government of Mongolia. 2007. EIA. UlaanBataar. 139 situation. Hence, it would be necessary for the department to consult the PIU or the Supervising Engineer to ascertain the facts and comprehend the situation. This process of fact finding/site investigation will take up a considerable amount of time delaying the outcome. Therefore, the efficiency of problem solving could be increased only if the party who is conversant with the project activities and their impacts takes the leading coordination role.

10.3 Proposed Grievance Redress System

511. In consultation with the MRTCUD(EA) the PIU of the DOR (IA) will, together with the local government body/bodies in the project area, establish a Public Complaints Center (PCC) in each site office. The local government bodies at the bagh, soum and aimag level will nominate an officer to act as a focal point for contact by and with the PCC.

512. The PCC will be staffed by an officer from the site office (nominated by the PIU) and will have facilities to maintain a database and communicate with Site Engineers, Supervising Engineer, PIU, Governors of aimags, soums, and bags and also with APs. The PCC’s phone number, fax, address, email address will be informed to the people through displays at the respective offices of the bagh, soum and aimag government administrations and public places. This information regarding the contacts for the PCC and the procedure for lodging a complaint at the PCC will be disseminated during the focus group discussions and household surveys that will be conducted to update and revalidate social impacts of the Project in July.

513. The mechanism suggested is as follows:

a. When a problem due to Project activities occurs the AP will make a complaint to the PCC. In case the AP is unable to direct the complaint to the PCC, AP will lodge the complaint at the bagh, soum or aimag administration office where the nominated officer will accept and immediately direct the complaint to the PCC. At the PCC a complaints register/database will be maintained with the following information:

Table 63: Public Complaints Data Base Nature of Action Category Date Complaint Taken Further Action Feed Back Action by Date Sent to Date

Source: TA Consultant’s Report. TA 7449-MON: Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

b. Upon receipt of the complaint the PCC will coordinate with the Supervising Engineer and the Contractor to resolve the problem. The supervising engineer will have the required authority to instruct the contractor on action that should be taken for redress. PCC will update the complaints database with action taken and

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feed back to the complainant.

c. Any complain that cannot be solved at the PCC/Supervising Engineer/Contractor level will be directed to the MRTCUD for action at the ministry level. Complaints thus directed and their outcome also will be recorded in the database. PIU director will monitor the Public Complaints register and prepare monthly report to the Director of DOR.

514. The Grievance Redress Mechanism is conceptualized n Figure 32 below.

Figure 32: Concept of Grievance Redress Mechanism for the Project

Affected people

Local Public Complaints Local

Environment Center under IA & Government

Department local government

Contractor Supervising Engineer

Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

10.4 Responsibilities of PCC

515. When a complaint is received at the PCC it will commence the redress process immediately as follows:

o Log complaint and date of receipt onto the complaint database and inform the Supervising Engineer (SE) and contractor immediately;

o With the SE and contractor investigate the complaint to determine its validity, and to assess whether the source of the problem is due to the Project activities;

o If a complaint is valid and due to works, identify mitigation measures in consultation with SE and contractor and advise the contractor accordingly;

o Monitor the Contractor's response on the identified mitigation measures, and update the database;

o Inform the Complainant of the action taken with copies to local authorities if the complaint was directed by them;

141 o Undertake further monitoring in conjunction with the SE and verify the situation, and if necessary instruct the contractor of measures to be taken to avoid such complaints; o Report the results and the subsequent actions to the PIU/Director, DOR ; and o PCC staff will have trainings on the grievance management practice.

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11. ENVIRONMENTAL MANAGEMENT PLAN

11.1 Environmental Safeguards

516. The main objective in formulating an Environmental Management Plan (EMP) is to recommend a set of environmental safeguard measures to address the adverse environmental and social impacts of the project. In addition to establishing mitigation measures and implementation responsibilities the EMP will also include monitoring mechanisms to ensure compliance with EMP requirements and environmental regulations of the country. The detailed EMP is included as Appendix I.

517. In preparing the safe guard measures the following approach was adopted:

 Avoiding the occurrence of adverse environmental impacts was the first priority;  Minimizing the adverse impact was considered next;  Mitigating the adverse impact to its full extent was considered next; and  Compensation was considered when mitigation was not adequate.

11.2 Mitigation Measures

518. In formulating the EMP with the mitigation measures identified in Section 6 the following approach was used. Mitigation actions proposed should be:

 Pragmatic – measures should be readily implementable, effective and practicable;  Efficient – measures should effectively achieve the objectives of environmental management within the limits of available information, time and resources; and  Adaptive – measures should be flexible in order that they can be adjusted to the realities, issues and circumstances of the project without compromising the ultimate objectives.

519. This comprehensive EMP identifies feasible and cost-effective measures to be taken to reduce potentially significant negative impacts to acceptable levels. Specifically it contains:

 Summary of all anticipated moderate / significant impacts;  Description of the correspondent mitigation measures; and  Links to other mitigation plans.

520. This EMP is site-specific, and focuses on the road section from Khovd to Buraatyn Davaa and also considers recommendations for the Tolbo Lake area as an associated section. In addition, the EMP also includes indirect environmental impacts and corresponding mitigation measures common to this section and also to other associated project components.

521. The main mitigation measures that are included in the detailed EMP (Appendix 1 ) are indicated below.

522. Contamination of soil. To avoid or mitigate the impacts of soil contamination the contractor is required to implement the Spill Management Plan prepared and submitted by the contractor (as required in Section 11-EMP).

523. Erosion. The following remedial measures are to be implemented by the contractor and will be specified in the contract documents: 143

 Prevention: o Implementation of a Soil Erosion Management Plan to be prepared by the contractor and to be approved by the Employer before earthworks; o Minimizing the area of soil clearance; o Selection of less erodible material and good compaction, placement of gabions and riprap particularly around bridges and culverts; o Construction in erosion and flood-prone areas should be mainly restricted to the dry season; and o Replanting will be completed as soon as possible following fill placement to facilitate regeneration of a stabilizing ground cover.  Mitigation o Using geotextile for erosion control in limited areas; o Stepped embankments will be required for embankments greater than 6 m; o Separation of topsoil from subsoil during the excavation works; reuse of topsoil as a superficial layer; o Reshaping the slope surface by notching, blazing and pocking to enhance seedling survivability; o Seeding with a fast growing native species and seed mix, immediately after fill placement; o Stabilization of embankment slopes and road cuts by re-vegetation with grazing resistant plant species; and o Completion of discharge zones of drainage structures with riprap to reduce erosion when required.  Borrow Pits and Spoil Sites o Use of borrow pits and spoil sites and their restoration plans to be approved by the Employer; o Pit restoration will follow the completion of works in full compliance with all applicable standards and specifications; o Arrangements for opening and using material borrow pits will contain enforceable provisions; o The excavation and restoration of the borrow areas and their surroundings in an environmentally sound manner will be required before final acceptance and payment under the terms of contracts; o Borrow pit areas will be graded to ensure drainage and visual uniformity; o Topsoil from borrow pit areas will be saved and reused in re- vegetating the pits; and o Additional borrow pits will not be opened without the restoration of those areas no longer in use.

524. Permafrost degradation. Preventive measures will be adopted to avoid permafrost degradation where possible. This will include avoiding areas with poor cryogenic and hydrogeological conditions such as areas close to the surface location of ground ice, perennial icing, frost mounds, solifluction-prone slopes, areas with ice-saturated soils, thermokarst areas and thermokarst lakes. However, if unavoidable, construction practices and mitigation measures to minimize impacts of the road construction in permafrost areas that are being adopted in

144 countries with large northern regions will be used.

525. Flashfloods. Flashflood/stream courses throughout the project area are primarily triggered by rainstorms and heavy rainfall. Two flashflood mitigation options are proposed for the purpose of the Project:

 Directing through culverts. Culverts that will pass sediment/debris/flashflood often are designed as box culverts; and  Flashflood control structures such as check dams, debris basins, or hillside ditches.

526. Drifting snow. In order to minimize the adverse impacts of drifting snow at high altitude passes, snow fencing will be used. The proposed design, fencing made from earth, can be observed in the Tsagaannuur to Ulaanbaishint area.

527. Air quality. During construction potential air quality impacts due to the generation of dust and related activities will be mitigated through avoidance strategies combined with construction best practices and monitoring. The civil works contract documents will specify that:

 Asphalt and hot-mix plants will be located at least 500 meters away from the nearest sensitive receptor (e.g., schools and hospitals);  Operators will be required to install emission controls;  Contractors will be required to spray road surfaces, excavation and construction sites to keep them moist for dust control;  Trucks carrying earth, sand or stone will be covered with tarps or other suitable cover to avoid spilling;  Potential significant adverse impacts to adjacent residents or site employees during construction will be mitigated by either discontinuing until favorable conditions are restored, or, if warranted, sites may be watered to prevent dust generation, particularly at crusher plants;  Machinery and equipment will be fitted with pollution control devices, which will be checked at regular intervals to ensure that they are in working order. The best available pollution control technologies will be required;  Open burning will be prohibited and requirements for spraying and related dust control measures and the proper use of solvents and volatile materials will be in incorporated in the contract documents; and  Pre-construction monitoring of existing ambient air quality will be undertaken in conjunction with each construction package to provide a baseline for the measurement of air quality impacts during the construction period.

528. Routine air quality monitoring will also be carried out in areas of high potential impact (asphalt plants, construction camps, etc) during the life of the Project.

529. During operation, enforcing emission standards authorized under Mongolian Environmental Law would assist in avoiding air quality deterioration. 145

530. Water flow and water quality. Potential effects to water flow patterns and water quality will be mitigated through a number of prevention strategies such as:

 Number of water crossings will be as minimal as practical;  Using materials excluding fine fractions around watercourses; and  Vegetative cover between the road and water bodies.

531. In addition, the following specifications will be included in the civil works contract documents:

 The Contractor should develop and implement contingency plans for control of oil and other dangerous substance spills (Spill Management Plan);  Fuel storage, maintenance shop and vehicle cleaning areas would be stationed at least 300 m away from the nearest water body;  Stormwater drainage and retention basins would be constructed and a silt trap (where a river/stream is nearby) would be installed prior to commencement of construction to control runoff water and sediment and prevent entry of contaminants into a water body;  Oil and grease are likely to be discharged in the construction vehicle parking area, vehicle repair area, and workshops. All wastewater would be directed into an oil interceptor prior to discharge; and  Existing water wells and springs would be clearly marked to prevent accidental damage from construction vehicles.

532. Noise. For mitigation during the construction phase the Project contract documents will include specifications that noise impacts will be mitigated by means of:

 Source Controls. All exhaust systems will be maintained in good working order; proper shields, shrouds, and intake and exhaust mufflers will be employed, operation of machinery will be at minimum power, and regular equipment maintenance will be undertaken. All blasting operations should be carried out with limited size charges, and blasting mats used where appropriate;  Construction Site Controls. Stationary machinery will be placed as far away from sensitive receptors as practical;  Time and Activity Constraints. Operations will be scheduled to correspond with periods when people/wildlife would least likely to be affected. Construction activities should be prohibited from April 15–June 15 near Tolbo Lake (Associated Project);  Community Awareness. Public notification of construction operations will incorporate noise considerations; information procedure of handling complaints through the Grievance Redress Mechanism will be disseminated. Sensitive receptors will be avoided as far as possible. Disposal sites and haulage routes will be coordinated with local officials; and

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 Baseline and Routine Noise Monitoring. Pre-construction monitoring of existing noise will be undertaken to provide a baseline for the measurement of impacts during the construction period. Routine monitoring will also be required in areas of high potential impact as specified in EMP, during the life of the Project.

533. Solid Waste. For waste control during the construction phase, the civil works contract documents will contain provisions requiring:

 Construction of temporary points for collection and disposal of waste and garbage;  Fencing the construction area (if needed);  Reinstatement of lands after completion of construction works; and  Construction of sanitation facilities for construction employees.

534. For solid waste management during operations the following mitigation will be implemented:

 Construction of rest points and parking areas with solid waste bins;  Road signs; and  Awareness campaigns.

535. Habitat fragmentation and wildlife migration patterns. The proposed mitigation measures include:

 Using warning signs and wildlife reflectors in the initial stage of the Project operation phase; and  Capacity building of the Administrations of Specially Protected Areas in Khovd and Bayan-Olgii aimags. They will be responsible for collection of additional information on wildlife migration routes and behavior of animals to provide recommendations on feasible mitigation measures when the traffic increases in close cooperation with WWF and WCS.

536. Poaching. The capacity of Customs at Russian/Mongolian border and especially Mongolian/China border should be strengthened not to allow poachers and illegal traders to smuggle Saiga horns, skins of rare animals, and other animal products. The training course for customs and border officers should include such issues as Saiga illegal market, identification Saiga horns, revealing illegal traders and creating awareness.

537. Non-transport infrastructure. Mitigation related to potential non-transport infrastructure has been assessed as follows:

 Water Supply Systems. Project contract documents will contain provisions requiring pre-construction monitoring of existing water quality to provide a baseline for the measurement of impacts during the construction period. Routine water quality monitoring will also be required in areas of high potential impact (river crossing sites, construction camps, and other areas with potential to contaminate runoff) during the life of the Project; and 147

 Waste Disposal. Contractual requirements for the Project will include enforceable provisions for the proper disposal of waste. Implementation and enforcement of the provisions will be the responsibility of the Supervising Engineer.

538. Transport infrastructure. The contracts will specify that care must be taken during the construction period to ensure that traffic disruptions are minimized.

539. Historical and cultural heritage. The Contractor will prepare a Cultural Heritage Management Plan to manage any sites that may be encountered during construction. If a historical, cultural, or archaeological relic is encountered along the Project corridor, all construction activities will halt and the established action plan will be implemented (notification of soum/district governor, Institute of Archaeology, and local police). Work will recommence only after appropriate measures have been taken as requested by the appropriate authorities and confirmation is received that work may resume.

540. Health and safety. Human health and safety risks associated with the Project during construction or operation phases will be mitigated by:

 Contract provisions to ensure that construction camp facilities are properly sited and preparation of Construction Camp Management Plan;  Restrictions on construction workers in utilizing facilities of communities in the area;  Awareness building among community;  Engineering efforts to reduce the likelihood of accidents and education of users about the risks of high speed; and  Traffic laws will be enforced.

11.3 Implementation

541. The Project Implementation Unit (PIU) will ensure that copies of this EMP, translated into Mongolian, are made part of the contract documents. The Contractor will be responsible for preparing a more site specific Environmental Plan (Contractor’s Environmental Management Plan) based on this EMP, prior to the commencement of construction activities. The Supervising Engineer (SE) will be responsible for reviewing and approving the Contractor’s EMP as well as ensuring that contractors comply with its mandates.

542. Before the construction activities commence, the Contractor will prepare and submit other mitigation plans and method statements consistent with the EMP to SE for review and approval. Contract documents shall explicitly indicate the requirement of these plans and also state that all environmental protection measures should be included in the bid price. These other mitigation plans include:

 Soil Erosion Management Plan will include measures to be taken during earthworks to avoid/mitigate erosion arising from cut and fill, stockpiling, stabilization.  Aggregate/Borrow Pits Management Plan will describe work activities; technology, potential environmental impacts, and mitigation measures for aggregate/borrow pits. It should specify that borrow pits and quarries should

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not be in a protected area. Contractors will ensure that (i) borrow areas will be located outside the ROW, (ii) After use borrow pit areas will be graded to ensure drainage and visual uniformity, (iii) borrow pit restoration will follow the completion of works in full compliance with all applicable standards and specifications, and (iv) topsoil from the opening of borrow pits will be saved and used to re-vegetate the pits.  Spill Management Plan will document the specific requirements, protocols, responsibilities, and materials necessary to implement an emergency spill response during the first few hours of an incident.  Construction Camp Management Plan will propose preventive/mitigation measures for environmental impacts of construction camp and construction yard including fuel storage, filling station and vehicle washing sites.  Waste Management Plan for operation of contractor’s yard/construction camp will provide procedures for management of hazardous waste, evaluate the type and quantities of waste matter, as well as detail arrangements for storage and transportation of the waste.  Reinstatement / Revegetation Management Plan will include details of revegetation, stabilization of riverbanks and embankments to prevent erosion, planting trees along the road and other appropriate environment enhancement measures.  Cultural Heritage Management Plan will deal with archeological sites that might be discovered during construction and will be prepared by the Contractor. It should contain emergency measures to be adopted in the event of unexpected discoveries, on-site training of construction staff in relation to cultural heritage, and communication procedures for response to cultural heritage issues.  Bridge Construction Method Statements for the organization and carrying out of bridge construction works will describe the proposed methodology for bridge construction over major rivers and the proposed measures for the avoidance of surface water pollution. 11.4 Implementation Schedule

543. The implementation schedule for the Project Cycle addresses mitigation and monitoring as illustrated in Table 64 below.

Table 64: Environmental Mitigation and Monitoring Schedule Phase Issue Schedule Mobilization/ Pre- Training for PIU be completed before the beginning of mobilization phase 1 time construction During the SE to review and approve contractor’s management plans and method 1 time mobilization phase statements and forward to PIU see EMP and During construction Mitigation and monitoring monitoring plan Reporting: Contractor to SE weekly/monthly During construction SE to PIU/DOR monthly PIU/DOR to ADB (through MRTCUD) quarterly Regularly according Mitigation, monitoring of air and water quality, wildlife corridors, efficiency During Operation to monitoring of wildlife reflectors and warning signs program 149

11.5 Environmental Cost Estimate

544. During the construction phase and the operation phase, a number of mitigation and monitoring measures have to be implemented to ensure environmental management and protection. These are listed below with the associated costs in Table 65. The total estimated investment in environmental protection is $ 296,100.

Table 65: Environmental Protection Costs Item Unit Quantity Unit Cost Costs ($) A. Mitigation 1. Dust control day 360 200 72,000 2. Drifting snow fence m 500 8.2 4,100 3. Sanitation at construction camps lump sum 25,000 4. Reflective road studs (wildlife warning km 10 300 3000 reflectors) 5. Air pollution control equipment lump sum 20,000 6. Blasting mats lump sum 10,000 7. Protection of drinking water sources lump sum 2,000 8. Solid waste management lump sum 30,000 Subtotal (A) 146,100 B. Monitoring 1. Lab and field monitoring equipment  Air quality measurement lump sum 30,000  Noise measurement lump sum 25,000  Water quality measurement lump sum 30,000 2. Ecological monitoring (Administration of lump sum 50,000 SPA) (equipment + vehicles) Subtotal (B) 135,000 C. Social Aspects 1.Public consultation on EMP lump sum 5,000 Implementation 2. Grievance Redress lump sum 10,000 Subtotal (C) 15,000 Total 296,100 Source: TA Consultant’s Report. TA 7449-MON: Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

11.6 Institutional Arrangements

545. Key organizations and people involved in environmental management of the project are as follows:

 The Ministry of Roads, Transportation, Construction and Urban Development (MRTCUD) will be the Executing Agency for the Project and through its Department of Roads (DOR) ensure that environmental management is implemented as required and report to the Steering Committee and ADB.  The Steering Committee will include representatives of different Ministries and Agencies such as Ministry of Finance, Ministry of Health, MNET, and MRTCUD. The Chairperson of the Steering Committee is the State Secretary of MRTCUD.  The Project Implementation Unit (PIU) will reside within the DOR with on-site offices. The PIU through the supervising engineer (SE) will be responsible for overall

150

contract administration and day-to-day project supervision including environmental management.  The Supervising Engineer (SE) will perform the following duties: o supervise site environmental management system of the contractors, and provide corrective instructions; o review the EMP implementation by the contractors; and o report EMP implementation status to the PIU/DOR on environmental inspection and monitoring results.  The Contractor. In the technical specification for the civil works contract, activities to protect environment will be described. During construction, contractors will strictly implement the Contractor’s EMP and undertake self-check activities and fully cooperate with the external environmental inspectors.

546. Bidding documents and detailed design contracts will be prepared and managed by the Department of Roads (DOR) of MRTCUD. Public consultations during the implementation of the EMP will be arranged by the SE/PIU. Construction work will be carried out by a qualified contractor and relevant sub-contractors. The contractor will be responsible for implementing the mitigation and monitoring measures defined in the EMP. To meet this requirement the contractor will appoint an Environmental Manager to oversee this task who will communicate closely with the SE’s Environmental/Social Specialist.

547. Figure 33 presents the implementing and reporting structure for the EMP.

Figure 33: Organizational Chart for Implementing the EMP

Source: TA Consultant’s Report. TA 7449-MON: Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

151

11.7 Capacity Building

548. It was found that the capacity of PIU to undertake responsibilities for carrying environmental management and monitoring is limited. There is little experience in the implementation and management of EMPs and skilled technical staffs are not available at either the national or aimag levels. Thus, it will be necessary to embody a program of institutional strengthening and training through the provision of technical assistance and procurement of laboratory equipment and supplies. This will be considered in combination with a proposal on new organizational structure.

549. Technical assistance. One of the main objectives of the training programs is to provide guidance on the goals, methods and procedures for environmental management appropriate for road development activities. This will cover aspects of environmental monitoring, specially protected areas issues, and wildlife management. Training is recommended for the PIU construction supervision staff, environmental/social officer, selected contractor personnel, and environmental staff at the local government level. In-country on-the job training by an international expert is preferred to external training to ensure that the Mongolia situation is fully taken into account, including both its physical and administrative circumstances.

550. Capacity building recommendations also include joint environmental inspections. PIU and MNET will regularly undertake joint inspections of the environmental aspects of the Project, and include the results of the inspections in the project quarterly reports submitted by DOR through MRTCUD to ADB.

551. Procurement of monitoring equipment. Instrumental environmental monitoring of the Project is a responsibility of the contractor. Verification monitoring can be conducted using the equipment of the PIU/Supervising Engineer and equipment procured through the financial assistance for the Project. With the purpose of building capacities of DOR after completion of the Project, the latter is recommended. The Project monitoring equipment will be passed over to a new department under DOR as proposed below under Organizational Changes.

552. Organizational changes. As was noted above, the capacity of DOR/PIU for environmental management is low. A recommendation to establish an Environmental/Social Officer position within PIU is a temporary measure specific for this particular project. Given the necessity for future road development projects and inclusion of environmentally sensitive areas and ecological resources in Mongolia, there is a strong demand for institutionalization of environmental aspects within MRTCUD. Establishing an environmental management and safety department under DOR can be recommended as a first step to ensure sustainability in road transport sector. One of the responsibilities of this department could be the development and implementation of an environmental policy in transport sector.

11.8 Environmental Monitoring

553. The monitoring framework for the Project is summarized in Table 2 in Appendix I. Monitoring activities include site supervision, verification of permits, monitoring environmental impacts such as noise, air and water pollution as well as wildlife migration routes.

554. It is recommended that construction contracts include that instrumental monitoring of air quality, water quality and noise levels should be carried out prior to commencement of construction to establish a baseline against which impacts can be measured. The locations for baseline monitoring may be determined in consultation with SE and MNET and local

152 government environmental inspectors. Contingency provisions should be included for additional air and water quality, as well as noise monitoring at the request of the SE/MNET if warranted by events.

555. DOR/PIU will prepare semi-annual environment report to MRTCUD and ADB. The first environment report will be prepared just after detailed design completion and report on EMP updating, actual implementation arrangement for the Project, and detailed environmental monitoring plan. PIU will seek a local NGO or expert’s comments on the monitoring results. 153

12. CONCLUSION

556. The major anticipated direct (D) and indirect (I) environmental impacts on physical resources during road construction (C) and operational (O) phases and correspondent mitigation measures include:

Negative  Permafrost: Construction activities can accelerate thermokarst processes in high-mountain tundra (D, C). o Mitigation: proper design and environmentally sensitive construction practices.

 Soil: Erosion processes in mountain terrain (D, C). o Mitigation: proper design and environmentally friendly construction practices.

 Natural hazards: Flashflood-prone areas and Drifting snow (D, C, O). o Mitigation: engineering measures.

Positive  Air Quality: Construction of a paved road will substantially decrease the concentration of dust in air. (D, O).

 Water Quality: Construction of bridges excludes pollution of water with suspended particles and oil products from vehicles crossing the rivers directly.

 Soil: Decreased soil erosion resulting from the elimination of multiple earthen trucks (D, O).

557. The major anticipated direct (D) and indirect (I) environmental impacts on ecological resources during road construction (C) and operational (O) phases and correspondent mitigation measures include:

Negative  Fauna: Moderate impacts on wildlife migratory routes are anticipated in a remote prospective in the Tsambagarav (ibex, wild sheep, snow leopard), Tolbo Lake (I, C, O).  Poaching: Increased accessibility of fauna, impacts on Saiga, ibex, snow leopard and other Red Book listed species (I, C, O). o Mitigation: poaching control, in coordination with anti-poaching capacity building and raising awareness of public training for custom/border officers on illegal trade and provided by other organizations and projects. Positive  Flora: Decreased impacts on flora resulting from the elimination of multiple earthen tracks (D, O).

154

558. The major anticipated direct (D) and indirect (I) environmental impacts on socio- economic resources during road construction and operational phases include:

Positive  Economic development: Increased opportunities for economic development of the region (I, O); and unemployment reduction. (D, C, O).  Transport development: Improved access to social infrastructure (D, O).

559. The Project will have some negative and positive, direct and indirect environmental impacts on physical, ecological and socio-economic environment during the road construction and operation phases. However, as the project road section is not located in an environmentally sensitive area, no serious negative environmental impacts are anticipated. Most of the alignment traverses on or along existing tracks and it is on these tracks that the road construction will be carried out. Further, the adverse impacts during construction are temporary and could be minimized by proper planning, good construction practices and implementation of the proposed mitigation measures and monitoring programs. Thus, these impacts are not expected to pose any threat to the environment.

560. Considering the nature of the adverse and beneficial effects and their significance to the environment it can be safely determined that the development of the road section from Khovd to Buraatyn Davaa is environmentally viable.

APPENDIX I

ENVIRONMENTAL MANAGEMENT PLAN

ENVIRONMENTAL MANAGEMENT PLAN

1 Implementation

1. The Project Implementation Unit (PIU) will ensure that copies of this EMP, translated into Mongolian, are made part of the contract documents. The Contractor will be responsible for preparing a more site specific Environmental Plan (Contractor’s Environmental Management Plan) based on this EMP, prior to the commencement of construction activities. The Supervising Engineer (SE) will be responsible for reviewing and approving the Contractor’s EMP as well as ensuring that contractors comply with its mandates.

2. Before the construction activities commence, the Contractor will prepare and submit other mitigation plans and method statements consistent with the EMP to SE for review and approval. Contract documents shall explicitly indicate the requirement of these plans and also state that all environmental protection measures should be included in the bid price. These other mitigation plans include:

• Soil Erosion Management Plan will include measures to be taken during earthworks to avoid/mitigate erosion arising from cut and fill, stockpiling, and stabilization. • Aggregate/Borrow Pits Management Plan will describe work activities; technology, potential environmental impacts, and mitigation measures for aggregate/borrow pits. It should specify that borrow pits and quarries should not be in a protected area. Contractors will ensure that (i) borrow areas will be located outside the ROW, (ii) After use borrow pit areas will be graded to ensure drainage and visual uniformity, (iii) borrow pit restoration will follow the completion of works in full compliance with all applicable standards and specifications, and (vi) topsoil from the opening of borrow pits will be saved and used to re- vegetate the pits. • Spill Management Plan will document the specific requirements, protocols, responsibilities, and materials necessary to implement an emergency spill response during the first few hours of an incident. • Construction Camp Management Plan will propose preventive/mitigation measures for environmental impacts of construction camp and construction yard including fuel storage, filling station and vehicle washing sites. • Waste Management Plan for operation of contractor’s yard/construction camp will provide procedures for management of hazardous waste, evaluate the type and quantities of waste matter, as well as detail arrangements for storage and transportation of the waste. • Reinstatement / Revegetation Management Plan will be prepared by a qualified ecologist of the Contractor and will include details of revegetation, stabilization of riverbanks and embankments to prevent erosion, planting trees along the road and other appropriate environment enhancement measures. • Cultural Heritage Management Plan will deal with archeological sites that might be discovered during construction and will be prepared by the Contractor. It should contain emergency measures to be adopted in the event of unexpected discoveries, on-site training of construction staff in relation to cultural heritage, and communication procedures for response to cultural heritage issues. • Bridge Construction Method Statements for the organization and carrying out of bridge construction works will describe the proposed methodology for bridge construction over major rivers and the proposed measures for the avoidance of surface water pollution.

2 Implementation Schedule

3. The implementation schedule for the Project Cycle addresses mitigation and monitoring as illustrated in Table 55 below.

Table A1-1: Environmental Mitigation and Monitoring Schedule Phase Issue Schedule Training for PIU be completed before the beginning of Mobilization/ Pre- construction 1 time mobilization phase SE to review and approve contractor’s management plans During the mobilization phase 1 time and method statements and forward to PIU see EMP and During construction Mitigation and monitoring monitoring plan Reporting: Contractor to SE weekly/monthly During construction SE to PIU/DOR monthly PIU/DOR to ADB (through MRTCUD) quarterly

Mitigation, monitoring of air and water quality, wildlife Regularly according to During Operation corridors, efficiency of wildlife reflectors and warning signs monitoring program

3 Environmental Cost Estimate

4. During the construction phase and the operation phase, a number of mitigation and monitoring measures have to be implemented to ensure environmental management and protection. These are listed below with the associated costs in Table 56. The total estimated investment in environmental protection is $ 296,100.

Table A1-2: Environmental Protection Costs Item Unit Quantity Unit Cost Costs ($) A. Mitigation 1. Dust control day 360 200 72,000 2. Drifting snow fence m 500 8.2 4,100 3. Sanitation at construction camps lump sum 25,000 4. Reflective road studs (wildlife warning km 10 300 3000 reflectors) 5. Air pollution control equipment lump sum 20,000 6. Blasting mats lump sum 10,000 7. Protection of drinking water sources lump sum 2,000 8. Solid waste management lump sum 30,000 Subtotal (A) 146,100 B. Monitoring 1. Lab and field monitoring equipment  Air quality measurement lump sum 30,000 Item Unit Quantity Unit Cost Costs ($)  Noise measurement lump sum 25,000  Water quality measurement lump sum 30,000 2. Ecological monitoring (Administration of lump sum 50,000 SPA) (equipment + vehicles) Subtotal (B) 135,000 C. Social Aspects 1.Public consultation on EMP lump sum 5,000 Implementation 2. Grievance Redress Lump sum 10,000 Subtotal (C) 15,000 Total 296,100 Source: Consultant TA 7449-MON.

4 Institutional Arrangements

5. Key players involved in environmental management of the project are as follows:

The Ministry of Roads, Transportation, Construction and Urban Development (MRTCUD) will be the Executing Agency for the Project and through its Department of Roads (DOR) ensure that environmental management is implemented as required and report to the Steering Committee and ADB. The Steering Committee will include representatives of different Ministries and Agencies such as Ministry of Finance, Ministry of Health, MNET, and MRTCUD. The Chairperson of the Steering Committee is the State Secretary of MRTCUD. The Project Implementation Unit (PIU) will reside within the DOR with on-site offices. The PIU through the SE will be responsible for overall contract administration and day- to-day project supervision including environmental management. The Supervising Engineer (SE) will perform the following duties: o supervise site environmental management system of the contractors, and provide corrective instructions; o review the EMP implementation by the contractors; and o report EMP implementation status to the PIU/DOR on environmental inspection and monitoring results. The Contractor. In the technical specification for the civil works contract, activities to protect environment will be described. During construction, contractors will strictly implement the Contractor’s EMP and undertake self-check activities and fully cooperate with the external environmental inspectors.

6. Figure A1-1 below presents the implementing and reporting structure for the EMP.

Figure A1-1: Organizational Chart for Implementing the EMP

Source: TA Consultant’s Report. TA 7339-MON: Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

7. Bidding documents and detailed design contracts will be prepared and managed by the Department of Roads (DOR) of MRTCUD. Public consultations during the implementation of the EMP will be arranged by the SE/PIU. Construction work will be carried out by a qualified Contractor (“the Contractor”) and relevant Sub-Contractors. The Contractor will be responsible for implementing the mitigation and monitoring measures defined in the EMP. To meet this requirement the Contractor will appoint an Environmental Manager to oversee this task who will communicate closely with the SE’s Environmental/Social Specialist.

5 Environmental Monitoring

8. The monitoring framework for the Project is summarized in Table 2 in Appendix I. Monitoring activities include site supervision, verification of permits, monitoring environmental impacts such as noise, air and water pollution as well as wildlife migration routes. PIU will seek a local NGO or expert’s comments on the monitoring results.

9. It is recommended that construction contracts include that instrumental monitoring of air quality, water quality and noise levels should be carried out prior to commencement of construction to establish a baseline against which impacts can be measured. The locations for baseline monitoring may be determined in consultation with SE and MNET and local government environmental inspectors. Contingency provisions should be included for additional air and water quality, as well as noise monitoring at the request of the SE/MNET if warranted by events. 6 Grievance Redress System

10. In consultation with the MRTCUD(EA) the PIU of the DOR (IA) will, together with the local government body/bodies in the project area, establish a Public Complaints Center (PCC) in each site office. The local government bodies at the bagh, soum and aimag level will nominate an officer to act as a focal point for contact by and with the PCC.

11. The PCC will be staffed by an officer from the site office (nominated by the PIU) and will have facilities to maintain a database and communicate with Site Engineers, Supervising Engineer, PIU, Governors of aimags, soums, and bags and also with APs. The PCC’s phone number, fax, address, email address will be informed to the people through displays at the respective offices of the bagh, soum and aimag government administrations and public places. This information regarding the contacts for the PCC and the procedure for lodging a complaint at the PCC will be disseminated during the focus group discussions and household surveys that will be conducted to update and revalidate social impacts of the Project in July.

12. The mechanism suggested is as follows:

 When a problem due to Project activities occurs the AP will make a complaint to the PCC. In case the AP is unable to direct the complaint to the PCC, AP will lodge the complaint at the bagh, soum or aimag administration office where the nominated officer will accept and immediately direct the complaint to the PCC. At the PCC a complaints register/database will be maintained with the following information:

Table A1-3: Public Complaints Data Base Nature of Action Category Date Complaint Taken Further Action Feed Back

Action by Date Sent to Date

Source: TA Consultant’s Report. TA 7339-MON: Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

 Upon receipt of the complaint the PCC will coordinate with the Supervising Engineer and the Contractor to resolve the problem. The supervising engineer will have the required authority to instruct the contractor on action that should be taken for redress. PCC will update the complaints database with action taken and feed back to the complainant.

 Any complain that cannot be solved at the PCC/Supervising Engineer/Contractor level will be directed to the MRTCUD for action at the ministry level. Complaints thus directed and their outcome also will be recorded in the database. PIU director will monitor the Public Complaints register and prepare monthly report to the Director of DOR. 13. The Grievance Redress Mechanism is conceptualized n Figure A1-2 below.

Figure A1-2: Concept of Grievance Redress Mechanism for the Project

Affected people

Local Public Complaints Local

Environment Center under IA & Government

Department local government

Contractor Supervising Engineer

Source: TA Consultant’s Report. TA 7339-MON: Regional Transport Development Project Component -1 Preparing the Western Regional Road II Project. Ulaanbaatar.

6.1 Responsibilities of PCC

14. When a complain is received at the PCC it will commence the redress process immediately as follows:

o Log complaint and date of receipt onto the complaint database and inform the Supervising Engineer (SE) and contractor immediately;

o With the SE and contractor investigate the complaint to determine its validity, and to assess whether the source of the problem is due to the Project activities;

o If a complaint is valid and due to works, identify mitigation measures in consultation with SE and contractor and advise the contractor accordingly;

o Monitor the Contractor's response on the identified mitigation measures, and update the database;

o Inform the Complainant of the action taken with copies to local authorities if the complaint was directed by them;

o Undertake further monitoring in conjunction with the SE and verify the situation, and if necessary instruct the contractor of measures to be taken to avoid such complaints; and

o Report the results and the subsequent actions to the PIU/Director, DOR.

Table A1-4: Detailed Environmental Management Plan Environmental Estimated Responsibility Mitigation Measures Location Time Frame Issue Cost, $US Implementation Supervision I. Pre Construction Phase 1. Fauna Dept. of Special  Capacity building of At pre- Protected Areas Administrations of Specially Construction, Administration and Wildlife corridor Protected Areas in Hovd and Tsambagarav National Construction 50,000 Management DOR/MNET restrictions Olgii Park Reserve, and post in coordination Construction  Studying/Monitoring wildlife with WWF and phases routes and animal behavior WCS 2. HIV/AIDS/STIs, Communicable Diseases, and Human Trafficking Pre Included in construction  Awareness Raising Campaign for HIV/AIDS Project Area PIU/DOR MRTCUD 1 and local population budget construction 3. Public Consultation on EMP Implementation  Public consultations conducted to disclose information on the EMP People’s opinion and its implementation process Pre on the EMP and obtain the opinions of Olgii construction 5,000 PIU/SE DOR Implementation environmental experts and Khovd and general public on the detailed construction design in environmentally sensitive areas and other affected areas

Pre

Possible change in construction – – MRTCUD MRTCUD alignment and

construction

1 Provision for HIV/AIDS prevention campaign for workers will be included in work contracts.

Environmental Estimated Responsibility Mitigation Measures Location Time Frame Issue Cost, $US Implementation Supervision 4. Alignment Selection in Olon-Nuuruud Lake Area People’s concerns Public consultations will be Olon-Nuuruud Lake Area By the end of PMO Aimag over the project conducted with the local people to 2010 Government road, including learn their concerns over the MRTCUD environmental Project and finalize the alignment. impacts on the lakes II. Construction Phase 1. Grievance Redress  Official in charge of people’s grievance will be designated in DOR and PIU.  A leaflet outlining environmental protection measures and listing grievance contact points will be Throughout the Project Before Grievances distributed. 10,000 PIU/DOR MRTCUD alignment construction  Community leaders will be given detailed information on the grievance management process  NGOs will be informed in the same manner as the community leaders. 2. Soil  Preparation of a Soil Erosion management Plan  Areas of soil clearance should be minimized; Included in  Less erodible materials should throughout the Project the main Construction Soil erosion be selected and good area Contractor SE/PIU civil works Period compaction, placement of gabions and riprap particularly cost around bridges and culverts  Stepped embankments will be required for embankments greater than six meters.

Environmental Estimated Responsibility Mitigation Measures Location Time Frame Issue Cost, $US Implementation Supervision  Separation of topsoil from subsoil during the excavation works; reuse of topsoil as a superficial layer;  Reshaping the slope surface by notching, blazing and pocking to enhance seedling survivability;  Seeding with a fast growing native species and seed mix immediately after fill placement;  Stabilization of embankment slopes and road cuts by re- vegetation with grazing resistant plant species;  Completion of discharge zones from drainage structures with riprap to reduce erosion when required.  Down drains/chutes lined with rip-rap/masonry or concrete to prevent erosion.  Construction in erosion and flood-prone areas should be restricted to the dry season  Using geotextile for erosion control will be limited but might be justified in some locations.  Precautions in designing of roadbed in embankments;  Erection of the roadbed of rock, Included in coarsely clastic rock and sand the main Construction Permafrost In permafrost areas Contractor SE/PIU soils, civil works Period  Using natural and artificial heat- cost insulating materials in subgrade, embankment and road pavement;

Environmental Estimated Responsibility Mitigation Measures Location Time Frame Issue Cost, $US Implementation Supervision  Using non-woven synthetic materials (geotextile) in subgrade and embankment  Replacement of waterlogged soils of seasonally thawing layer and ice-saturated underlying permafrost with coarsely clastic rock and sand soils correspondingly. 3. Natural Hazards Included in Shurga bridge –  Installation of box culverts the main entrance to Hongio Construction Flashfloods Contractor RSRC/PIU  Warning signs civil works Canyon, Khasaat Pass, phase cost Buraat Pass Blowing and Construction 4,100 Buraat, Khashaat Pass, Contractor SE/PIU drifting snow  Installation of snow fencing phase 4. Air Quality  All earthwork vehicles shall be covered to avoid spillage  Material storage site should be 300 m away from residential Construction sites, Construction Generation of dust 72,000 Contractor SE/PIU areas asphalt plants phase  Water will be sprayed on the construction sites and major feeder roads twice a day during dry season  The asphalt batching plants/ crushing plants must be fitted 20,000 for with dust extraction units in air pollution Emissions from compliance with local standards control Construction Construction sites All vehicles, equipment, and equipment Construction Vehicles,  (asphalt plants / crushing Contractor SE/PIU machinery used for construction for asphalt period Equipment, and plants) shall be regularly maintained and plants / Machinery correctly operated (including the crushing use of dust filters or hoods) plants throughout the project alignment.

Environmental Estimated Responsibility Mitigation Measures Location Time Frame Issue Cost, $US Implementation Supervision  Monitoring of the basic parameters of construction Monitoring of Construction emissions near sources (carbon Construction impacts to air 30,000 Construction sites Supervising SE/PIU monoxide, nitrogen oxides, period quality Engineers sulphur dioxide, particulate matter) 5. Water Issues  Control of water flow speed by means of rip-raps, dissipation structures, grass, etc.  Storm water drainage and retention basins would be Included in Contamination of the main Construction constructed and a siltation fence Construction sites Contractor SE water bodies (where a river/stream is nearby) civil works period would be installed prior to cost commencement of construction  Contractor should develop and implement a Spill Management Plan Contamination of  Existing water wells and springs Throughout the 147.9 Pre- drinking water would be clearly marked to 2,000 Contractor SE/PIU KM construction sources prevent accidental damage from construction vehicles  Monitoring of the basic Monitoring of parameters of wastewater and Construction impacts on water affected water bodies 30,000 Construction sites Contractor/SE PIU period bodies (Temperature, suspended particles, pH, dissolved oxygen content, COD, BOD, oil products) 6. Fauna Installation of Contractor,  Installation of wildlife reflectors reflectors and Administrations of Wildlife corridor Wildlife migration routes signs – SPAs in Hovd and  Installation of warning signs 3,000 PIU restriction  Studying/Monitoring wildlife in the Project Section construction Olgii in routes and animal behavior phase; coordination with Maintenance WWF and WCS.

Environmental Estimated Responsibility Mitigation Measures Location Time Frame Issue Cost, $US Implementation Supervision of reflectors – Operation phase Restriction  No construction work will be Contractor of the to be carried out in south-east part of Associated Important Bird followed by Construction Tolbo Lake from April 15 to June Tolbo Lake, Component- PIU/DOR/MNET Area Associated phase 15 Section Buraatyn component’s Davaa to Olgii contractor  Clauses written into construction The restriction contracts: immediate firing and Project section and Construction Illegal Poaching will be prosecution of individuals associated component and post- Contractor PIU/MNET and Hunting included in involved in poaching and illegal sections construction trade, hunting, or cutting of construction vegetation contracts 7. Flora Included in the main Areas with favorable Post- Planting trees Contractor SE/PIU  Landscaping civil works conditions for trees construction cost 8. Noise and Vibration  Blasting operations shall be carried out in accordance with Law on Control of Explosives (2004). Safety  Blasting schedules shall be measures publicly disseminated in areas are included in the main Blasting where residences will be Construction civil works Cut areas and quarries Contractor SE/PIU Operations impacted by the blasting noise period including shepherds. cost  Potential structures which may 10,000 be impacted from blasting (blasting vibration will be identified prior to mats) blasting and monitored during blasting. Appropriate safety measures will be implemented.

Environmental Estimated Responsibility Mitigation Measures Location Time Frame Issue Cost, $US Implementation Supervision This applies to all blasting sites (cuts, rock quarries) during all blasting activities.  Trial blasts in less sensitive areas will be made for better blast design and identification of potential zone of influence.  Plant and equipment used in construction shall strictly conform to local noise standards.  Within 200 m of the nearest Included in Noise from habitation, construction work the main Vehicles, Plant, Construction such as crushing, concrete civil works Construction Sites Contractor SE/PIU and Earthmoving period mixing and batching, mechanical cost Equipment compaction, etc., will be stopped between 22:00 and 06:00 hours throughout the Project area, sites temporarily acquired, and all borrow areas. Monitoring of Sensitive construction Construction  Monitoring of noise levels in 25,000 Contractor SE/PIU noise levels sensitive areas sites Period 9. Historical, Cultural, and Archaeological Heritage  If a historical, cultural, or archaeological relic is encountered during construction, throughout the Project area, all activities will halt and an DOR, If needed soum/district Encountered established action plan will be Construction governor, during implemented (notification of Project Area Contractor Period Institute of Construction soum/district governor, Institute of Archeology and local police). Archeology and Works will recommence only local police after appropriate measures have been taken as requested by the appropriate authority, and confirmation has been received

Environmental Estimated Responsibility Mitigation Measures Location Time Frame Issue Cost, $US Implementation Supervision from them that works may resume. 10. Restoration of Borrow Pits and Quarries Included in After a Identified quarries and  Reinstatement  Topsoil strip (where necessary) the main completion of borrow pits along the Contractor SE/PIU of borrow pits civil works construction  Grassing the area road and quarries cost works 11. Construction Camps  Damage of topsoil  Proper construction camp  Contamination management in compliance with related to fuel Construction Camp Management storage and Plan fuelling  Proper waste management in 25,000 Contractor SE/PIU operations compliance with Waste  Sewerage Management Plan related  Proper spill management in contamination compliance with Spill  Waste Management Plan management  Planning to reduce the likelihood Design, of accidents Included in Construction, Contractor, Local 12. Road Safety road safety In all sections SE/PIU  Education of users on the risks of and Operation Police budget high speeds phases  Enforcement of traffic laws Operation Phase  Contractors will be required to clean up the ROW after construction  Garbage bins will be installed in Operation 1. Solid waste 10,000 In all sections DOR MRTCUD maintenance centers and service period stations  Staff in the maintenance centers will carry out periodical solid waste collection

Environmental Estimated Responsibility Mitigation Measures Location Time Frame Issue Cost, $US Implementation Supervision The cost of this equipment is State included in Professional  Monitoring in the proximity to Air Quality Operation 2. Air Quality Khovd and Olgii MNET Inspection towns Monitoring period Agency during

Construction Phase

The cost of this equipment is State included in Professional Water 3. Water Quality  Monitoring in proximity to major MNET Inspection Quality rivers Agency Monitoring

during Construction Phase The cost of this equipment is State included in Professional 4. Noise and  Monitoring in the proximity to Operation Noise Olgii and Khovd MNET Inspection Vibration towns phase Monitoring Agency during Construction Phase

Table A1-5: Environmental Monitoring Framework Monitoring Location and Frequency of Parameter Measurement Location Time Frame Responsibility Parameters A. Construction Phase Construction Monitoring parameter: TSP phase – Monitoring frequency: 2 times/day Contractor; Monitoring points: Construction sites and transportation roads Construction sites, Construction Operation phase B. Operation Phase Including 1. Air Quality and operation : State Monitoring parameter: TSP, CO, NO , SO monitoring of x 2 phases Professional Monitoring frequency: 3 times/day asphalt plants Inspection Monitoring points: near Hovd and Olgii Agency C. Monitoring Standard

Mongolian standard: MNS 0017-2-3-16:1988 A. Monitoring Parameters: COD, BOD5, suspended solids, oil products Construction B. Monitoring Frequency: phase – Construction phase: 3 times/day Project Area Contractor; Operation phase: 2 times/day includingShurga Construction Operation phase 2. Water Quality Monitoring points (Quantity): Bulgan River (2), Uyench River (1), Bodonch River (1), River, Buyant and operation : State Buyant River (2), Hovd River (3), and Khar-Us Nuur Lake (1) River, Khovd phases Professional C. Monitoring Standard River, Inspection Mongolian standard: MNS 4586:1998 Agency MNS 4943:2000 A. Monitoring Frequency Construction Phase: 1 time/day Construction: Operation Phase: 2 times / year Contractor; B. Monitoring Points Sensitive Operation: State 3. Noise Construction phase: Near sensitive receptors (Uyench, Manhan, Hovd, Olgii, receptors in Construction Professional Tsaganur) settlements: Inspection Operation phase: Hovd and Olgii Agency C. Monitoring Standard Mongolian standard: MNS 0012-1-009:1995 A. Monitoring Item Construction: Endangered fauna and its migration patterns. IBAs Pre-detailed Contractor; B. Monitoring Frequency design, In ecologically Operation: Seasonal observations/day and night time detailed 4. Fauna sensitive Project Administration of C. Monitoring Points design, and Areas SPAs of Khovd Wildlife migration routes and IBAs: Bulgan Nature Reserve, Bodonch Canyon, operation, and Bayan-Olgii Manhan/Khar-Us Nuur, Tsambagarav National Park, Siilkhem National Park, Tolbo phases aimags lake

APPENDIX II A

CLIMATE VARIABLES

Figure 1: Absolute Maximum/Minimum Air Temperature, оС (1995–2005)

Olgiy city, Bayan-Olgiy aimag

40

30

20

10

0

-10

-20

-30

-40 I II III IV V VI VII VIII IX X XI XII absolute maximum temperature,oC absolute minimum temperature,oC

Khovd city, Khovd aimag 40 30 20 10 0 -10 -20 -30 -40

-50 I II III IV V VI VII VIII IX X XI XII absolute maximum temperature,oC absolute minimum temperature,oC

Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

Figure 2: Absolute Minimum Temperature of Soil Surface, оС (1995–2005)

Olgiy city, Bayan-Olgiy aimag

0 I II III IV V VI VII VIII IX X XI XII -10

-20

-30

-40

-50

absolute minimum temperature of soil surface,oC

Hovd city, Hovd aimag

0 -5 I II III IV V VI VII VIII IX X XI XII -10 -15 -20 -25 -30 -35 -40 -45 -50 absolute minimum temperature of soil surface,oC

Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

Figure 3: Monthly mean precipitation, mm, and mean snow depth, cm (1995-2005) Olgiy city, Bayan-Olgiy Aimag

35.0 5 30.0 4 25.0 20.0 3 15.0 2 10.0 1 5.0 0.0 0 I II III IV V VI VII VIII IX X XI XII precipitation amount,mm snow depth,cm

Hovd city, Hovd Aimag 40.0 8 35.0 7 30.0 6 25.0 5 20.0 4 15.0 3 10.0 2 5.0 1 0.0 0 I II III IV V VI VII VIII IX X XI XII

precipitation amount,mm snow depth,cm

Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

APPENDIX II B:

WATER QUALITY

Table 1: Concentration Variations of Major Ions and Other Water Quality Substances in Khovd and Bayan-Oligii Aimag Rivers (EC is in ~S/cm; hardness is in me/l; other parameters in mg/I)

Khovd-Olgii pH TEMP EC O2 BOD SS COD-Mn F Si 2002 7.99 11.1 131 15.4 1.3 0.17 2.0 2003 7.59 11.5 139 22.3 1.3 0.15 2.1 2004 7.80 10.4 139 10.9 1.8 0.18 1.8 2005 8.11 12.8 138 10.8 2.6 0.06 2.1 2006 7.46 12.1 146 17.2 1.4 0.25 2.0

Ca Mg Na+K S04 CL HC03 TDS HARD Fe 2002 15.9 2.9 8.0 8.5 3.1 60.1 116 1.00 0.04 2003 15.3 7.3 12.3 9.1 5.8 74.4 148 1.17 0.05 2004 14.7 3.8 5.2 9.6 3.2 60.3 95.8 1.06 0.04 2005 17.2 4.6 7.3 12.7 6.6 63.7 114 1.19 0.03 2006 16.2 4.4 5.4 9.8 4.9 71.4 99.7 1.13 0.03

NH4 N02 N03 P04 2002 0.04 0.003 0.09 0.007 2003 0.05 0.002 0.17 0.004 2004 0.06 0.002 0.13 0.005 2005 0.06 0.004 0.31 0.008 2006 0.04 0.012 0.43 0.009 Buyant-Khovd

pH TEMP EC O2 BOD SS COD-Mn F Si 2002 8.08 13.6 196 19.6 5.0 0.44 3.1 2003 7.56 182 35.7 2.2 0.50 2.8 2004 7.97 183 18.7 1.7 0.37 3.2 2005 12.6 9.25 1.8 2.3 2006 9.9 9.90 2.6 2.1

Ca Mg Na+K S04 CL HC03 TDS HARD Fe 2002 21.6 3.6 13.3 21.2 5.5 80.8 161 1.42 0.04 2003 21.4 5.1 8.7 28.4 3.4 68.5 134 1.51 0.02 2004 20.4 5.8 7.7 25.7 3.3 67.6 132 1.53 0.06 2005 20.8 5.1 11.4 29.7 5.8 68.9 142 1.46 0.07 2006 23.4 5.6 6.8 21.5 4.1 72.9 134 1.54

NH4 N02 N03 P04 2002 0.20 0.134 0.61 0.006 2003 0.04 0.008 0.39 0.003 2004 0.05 0.003 0.40 0.004 2005 0.18 0.011 0.30 0.064 2006 0.07 0.017 0.15 0.025

APPENDIX IIC

LIST OF FLORA AND FAUNA

Table 1: List of Dominant Plants Zone Dominance Cerastium lithospermifolium, Dryadanthe tetrandra, Parrya exscapa, Kobresia High mountain belardii, Carex melanatha, Carex orbicularis Festuca lenensis, Oxytropis oligantha, Potentilla nivea, Stellaria pulvinata, Artemisia argyrophylla, Kobresia filifolia Festuca lenensis, Helictotrichon desertorum, Festuca valesiaca, Poa Mountain steppe attenuate, Silene repens, Arenaria capillaries, Onosma arenaria, Spiraea hypericifoloa, Agropyron cristatum, Carex pedifopmis, Galium verum Festuca lenensis, Agropyron cristatum, Krylovia eremophylla, Peucedanum histrix, Allium edaurdii, Potentilla sericea Dry steppe Caragana bundei, Caragana pugmaea, Stipa krylovii, S.kirghisorum, Festuca valesiaca, Agropyron cristatum, Artemicia dolosa, Melandrium viscosum, Saussuea pricei Stipa gobica, Agropyron nevskii, Agropyron cristatum, Artemisia frigida, Arenaria capillaries, Caragana leucophloea, Eurotia ceratoides Desert steppe Stipa glareosa, S.sibirica, Agropyron cristatum, Cleistogenes squarrosa, Allium equardii, Artemisia rutifolia, Caragana bundei, Lophanthus chinensis Stipa glareosa, Caragana bundei, Euratia certoides, Anabasis brevifolia, Stepped desert Artemisia xerophytica, Agropyron nevskii Nanophyton grubovii, Eurotia ceratoides, Stipa glareosa, Artemisia Grasses – gracilescens, Reamurea songorica undershrub desert Anabasis brevifolia, Stipa glareosa, Arthemisia xerophytica, A.hanthochroa, Ajania fruticosa, Zygophyllum pterocarpum, Ephedra sinica Euratia certoides, Reamurea songorica, Haloxylon ammodendron, Artemisia Undershrub and terrae-albae, Anabasis salsa, A. truncata shrub desert Haloxylon ammodendron, Anabasis brevifolia, Zygophyllum xanthoxylon, Reamurea songorica, Achnathuerum splendens, Leymus, Iris lacteal, Carex enervis, Kalidium Hamad foliatum, Reamurea songorica, Phragmites communis, Tamarix ramosissima, Haloxylon ammodendron, Popolus diversifolia Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

Table 2: Rare and Endangered Species of Mammals in Khovd and Bayan-Olgii Aimags English name Mongolian name Latin name Potential occurrence in the Project Area 1 Asiatic Wild Dog* Чоно, цєєвєр Cuan alpinus Bodonch Canyon in Bodonch Canyon, near Tsambagarav Nature 2 Snow leopard* Ирвэс Uncia Uncia Reserve, Shine Pass, Siilkham National Park Southern part of Bulagan 3 Asiatic Wild Ass Хулан Equus hemionus soum 4 Wild Boar Зэгсний гахай Sus scrofa nigripes Khar Us Nuur Manhan Nature Reserve, Saiga Соргог бєхєн Saiga tatarica tatarica Khar Us Nuur National Park Mongolian saiga Near Khar-Us Nuur and 5 Монгол бєхєн Saiga tatarica mongolica antelope* Manhan Nature Reserve 6 Goitered Gazelle Хар сїїлт зээр Gazella subgutturosa Manhan Nature Reserve 7 Wild mountain sheep Алтайн аргаль Ovis ammon Nearby Bodonch river in Bodonch canyon, near Tsambagarav Nature 8 Ibex Янгир Capra Ibex siberica Reserve, Shine Pass, Siilkham National Park 9 Beaver* Тєв азийн минж Castor fiber birulai Bulgan river Таван хуруут Khar Us Nur National 10 Satunin’s Jerbao Cardiocranius paradoxus атигдаахай Park Thick-tailed Pygmy Khar Us Nur National 11 Єєхлєг атигдаахай Salpingotus crassicauda Jerboa Park Note: *-are included on Appendices I and II of the Convention on the International Trade of Endangered Species (CITES). Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

Table 3: Rare and Endangered Local and Migrant Bird Species of in Khovd and Bayan-Olgii Bayan- English name Mongolian name Latin name Khovd Olgii 1 Dalmatian Pelican Борцгор хотон Pelecanus crispus + 2 Great white Egret Цасч дэглий Egretta alba + 3 Eurasian Spoonbill Халбаган хошуут Platalea leucorodia + + 4 Black stork Хар єрєвтас Cionia nigra + + 5 Whopper Swan Гангар галуу Cygnus Cygnus + + 6 Bar-headed Goose Хээрийн галуу Eulabeia indica + + 7 Swan Goose Хушуу галуу Cygnopsis cygnoides + + 8 Osprey Явлаг сар Pandion haliaeus + 9 White tailed Sea Eagle Усны цагаан сїїлт Haliaeetus albicilla + + бїргэд 10 Altai snowcock Алтайн хойлог Tetraogallus altaicus + + 11 Ring necked Pheasant Гургуул Phasianus colchicus + + 12 Japanese White napped Цэн тогоруу Grus vipio + crane 13 Houbara Bustard Жороо тоодгой Chlamydotis + undulate 14 Great Black-headed Gull Итэлгэн цахлай Larus ichthyaetus + + 15 Hodgson’a bushchat Єгєєлэй Saxicola insignis + + шулганаа 16 Euroasian pinduline Tit Уран шувуу Remiz pendulinus + 17 Henderson’s Ground Jay Хулан жороо Podoces hendersoni + Source: Government of Mongolia. 2007. EIA. Ulaanbaatar.

APPENDIX II D:

HISTORICAL AND CULTURAL HERITAGE

Road Historical and Cultural Heritage Sites Located along the Project Alignment Section

Approximately 20 tombs and 1 “man stone” are located between 0 and 2 km from the existing alignment.

Between Khovd and Olgii “San” Wall

A protective wall near Hovd town from the Manchurian time. A “man stone”, about 200m away from the existing road at Olon nuur, Bayan-Olgii Aimag.

APPENDIX II E:

PROJECT ALIGNMENT MAPS

E

Figure 1: From Bayan Enger to Khovd

Source: Consultants TA No. 7449-MON.

Figure 2: From Buraatyn Davaar to Bayan Enger

Source: Consultants TA No. 7449-MON.