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38349-031: South Asia Subregional Economic Cooperation Airport

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38349-031: South Asia Subregional Economic Cooperation Airport Due Diligence Report August 2020 Nepal: South Asia Subregional Economic Cooperation Airport Capacity Enhancement Project CURRENCY EQUIVALENTS (as of 15 July 2020) Currency unit – Nepalese rupee/s (NRe/NRs) NRe1.00 = $0.008311 $1.00 = NRs120.31 ABBREVIATIONS ADB - Asian Development Bank ATCEP - Air Transport Capacity Enhancement Project ATPPC - Air Transport Project Preparatory Consultant BOQ - Bills of Quantity CAAN - Civil Aviation Authority of Nepal DDR - Due Diligence Report GAUC - Gautam Buddha Airport Upgrading Component GBA - Gautam Buddha Airport IC - Investment Component IEE - Initial Environmental Examination ITB - International Terminal Building KMUM - Kageshwori Manahara Urban Municipality REA - Rapid Environmental Assessment SDP - Sector Development Program SPS - Safeguard Policy Statement TIA - Tribhuvan International Airport TOR - Terms of References NOTE (i) The fiscal year (FY) of the Government of Nepal and its agencies ends on 15 July. “FY” before a calendar year denotes the year in which the fiscal year ends, e.g., FY2020 ends on 15 July 2020. (ii) In this report, "$" refers to United States dollars. This due diligence report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. TABLE OF CONTENTS PURPOSE AND STRUCTURE OF THIS REPORT PART I I. INTRODUCTION 1 A. Overview of the Sector Development Program 1 B. SDP Investment components 1 C. TIA investment components overview 1 D. Project Description (TIA) 2 E. Scope of Study 4 F. Objectives of Study 4 II. SCOPE OF LIKELY IMPACTS OF THE TIA INVESTMENT COMPONENT 5 A. Involuntary Resettlement and Indigenous People 5 B. Scale of Construction of TIA Investment Component 6 C. Anticipated Social Effects/Impacts during Construction 10 D. Beneficial Impact 11 III. CONSULTATION, INFORMATION DISSEMINATION AND DISCLOSURE 11 IV. GRIEVANCE REDRESS MECHANISM 12 V. INSTITUTIONAL ROLES AND RESPONSIBILITIES 12 VI. MONITORING AND REPORTING 13 VII. CONCLUSIONS AND ECOMMENDATIONS 13 VIII. ANNEX 13 PART II I. INTRODUCTION 15 A. GBA Investment component overview 15 B. Project Description 15 C. Objectives of Study 16 D. Scope of Study 16 II. SCOPE OF LIKELY IMPACTS OF GBA INVESTMENT COMPONENT 17 A. Involuntary Resettlement & Indigenous People 17 B. Scale of Construction of GBA Investment Component 18 C. Land Acquisition of Gautam Buddha Airport 20 D. Land Acquisition of T2 Area 21 E. Involuntary Resettlement 23 F. Use of Compensation Money 23 G. Indigenous People 24 H. Indigenous People in the context of GBA 25 I. Identification of Ethnic Groups in T2 area 25 J. Beneficial Impacts 26 K. Adverse Impacts 27 III. CONSULTATION, GREIVANCES REDRESS MECHANISM 27 IV. INSTITUTIONAL ROLES AND RESPONSIBILITIES 29 V. MONITORING & REPORTING 29 VI. CONCLUSION AND RECOMMENDATION 30 PART III I. CORRECTIVE ACTIONS FOR TIA & GBA IC 50 A. Corrective Actions for TIA Investment Component 50 B. Corrective Actions for GBA IC 51 PURPOSE AND STRUCTURE OF THIS REPORT Purpose of this report As outlined in the Inception Report (Ref: 20NP040001-RV-000-G-RPT-001) dated 26 May 2020, the Review exercise is divided into 4 phases: ◆ Phase 1 – Inception report ◆ Phase 2 – Capacity assessment and design review ◆ Phase 3 – Development of the TIA ITB review ◆ Phase 4 – Refinement As part of the assignment for “Phase 2 – Capacity assessment and design review”, this presents the Draft Social Safeguard Due Diligence Report of TIA and GBIA Investment Components. Structure of this report The report is structured in three parts: • Part I- Social Safeguard Due Diligence Report of TIA IC • Part II-Land Acquisition and Ethnic Households in GBIA Project Area Due Diligence Report • Part III-Corrective Actions Part I of the report is organized into following seven (7) chapters; a brief of each chapter is described as below: • Chapter 1 - Introduction: This section provides background of the project and description of project component and scope and objectives of the study. • Chapter 2 - Scope of Likely Impacts of the TIA Investment Component: This section summarizes scope of likely impacts of project on involuntary resettlement and indigenous people. • Chapter 3 - Consultation, Information Dissemination and Disclosure: This section discusses consultation with project stakeholders and related outcome. • Chapter 4 – Grievance Redress Mechanism: This section describes review of existing and proposed grievance redress mechanism for the project. • Chapter 5 – Institutional Roles and Responsibilities: This section describes role and responsibilities of institutions for the implementation and execution of project component • Chapter 6 - Monitoring and Reporting: This section elucidates M&E of social safeguard related issues during implementation of project. • Chapter 7 - Conclusion and Recommendation: This section highlights key findings and recommendations for implementation. 2 Similarly, Part II of the report is organized in following 6 chapters • Chapter 1 - Introduction: This section provides background of the project and description of project component and scope and objectives of the study. • Chapter 2 - Scope of Likely Impacts of the GBIA Investment Component: This section summarizes scope of likely impacts of project on involuntary resettlement and indigenous people. • Chapter 3 – Consultation & Grievance Redress Mechanism: This section discusses consultation with project stakeholders and related outcome and review of existing and proposed grievance redress mechanism for the project. • Chapter 4 – Institutional Roles and Responsibilities: This section describes role and responsibilities of institutions for the implementation and execution of project component • Chapter 5 - Monitoring and Reporting: This section elucidates M&E of social safeguard related issues during implementation of project. • Chapter 6 - Conclusion and Recommendation: This section highlights key findings and recommendations for implementation. Part III of the report is divided into two sections for Corrective Actions related to TIA IC and GBIA IC. Part: I SOCIAL SAFEGUARD DUE DILIGENCE REPORT OF TIA INVESTMENT COMPONENT I. INTRODUCTION A. Overview of the Sector Development Program 1. There is a growing international passengers' demand in Nepal. With the only international gateway in Tribhuvan International airport (TIA) and handling about half of the country’s domestic air traffic, there is a need to increase the capacity of the Nepal civil aviation sector to meet the growing demand. The Government of Nepal is developing the Gautam Buddha Airport and the Pokhara International Airport as national pride projects. On completion in about 1-2 years' time these airports will share part of international air traffic at TIA. 2. The Government of Nepal has applied for a loan from the Asian Development Bank (ADB) for Airport Capacity Enhancement Sector Development Program (SDP) to support the following components: i.) Program Component – Civil aviation sector reforms in restructuring the Civil Aviation Authority of Nepal (CAAN) ii.) Investment Component – Provide project financing for improvement of airport facilities at TIA and Gautam Buddha Airport (GBA) in Lumbini. B. SDP Investment components 3. The SDP investment components comprise the following: i.) TIA Hangar Apron ii.) TIA Parallel Taxiway Extension iii.) GBA T2 Terminal 4. These investment components shall be subject to review, including but not limited to, revised demand forecast, reviewed scope of work, reviewed engineering design and specifications, revised cost estimates, implementation arrangement, implementation schedule and procurement packages. Due diligence will be conducted on these components including environmental and social safeguards, economic and financial analysis. C. TIA investment components overview 5. Figure 1 shows satellite view of TIA. The Hangar Aprons and Parallel Taxiway Extension are to be constructed in the existing TIA site. The extents of works are demarcated in Figure 2. 2 Figure 1 - Satellite view of TIA N Source: Google Earth. Figure 2 - Existing TIA masterplan with investment components demarcation D. Project Description (TIA) 6. Tribhuvan International Airport is the main gateway for international air travel in Nepal. As per CAAN, the airport handled 124,255 aircrafts movements (including 32,439 international) and 7,327,042 passenger movements (including 4,138,563 international) in 2019. The salient details of this airport are shown in Annex-1 of this report. 7. Started in 1951, the airport has gone through succession of improvements. Major improvements of the airport have been undertaken by ADB funded programs and projects since eighties. 8. A master plan update of the airport was carried out by CAAN in 2009, which identified a number of projects for phase improvement of infrastructures and CNS facilities of this airport. Air Transport Capacity Enhancement Project (ATCEP), funded by ADB undertook implementation of Phase 1A of this master plan, which include a 300 m runway extension towards the end 02 for improving runway safety area towards runway 20; extension of existing International Terminal Building to provide additional space for departure gate lounge
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