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TBILISI WATER SUPPLY AND SANITATION PROJECT

ENVIRONMENTAL ASSESSMENT ANDENVIRONMENTAL

MANAGEMENT AND MONITORING PLAN

December 14, 2001

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TABLE OF CONTENTS

1. INTRODUCTION .......................................................... 12. BACKGROUND AND PROJECT DESCRIPTION .......................................................... 1

2.1. ProjectBackground ........................................................... 12.2. Project Objectives ........................................................... 32.3. Project Components ........................................................... 3

2.3.1 Project Component 1 - Repairs and Rehabilitation Fund (estimated cost - US$ 20millions) 32.3.2 Project Component 2 - Technical Assistance .........................................................42.3.3 Project Component 3 - Refinancing of PPF ........................................................... 52.3.4 Project Component 4 - Tariff Subsidy ........................................................... 52.3.5 Project Component 5 - Redundancy Payments ...................................................... 5

3. INSTITUTIONAL, POLICY AND LEGAL CONTEXT .................................................. 53.1. Institutional and Policy Context ........................................................... 53.2. Environmental Protection .......................................................... 63.3. Law on Environmental Permits and Other Environmental Regulations ......................... 73.4. Public Consultation ........................................................... 8

4. ENVIRONMENTAL OVERVIEW ........................................................... 94.1. Physical Setting ............................................................ 94.2. Environmental Status .......................................................... 10

4.2.1 Air Pollution .. 104.2.2 Solid Waste Disposal .. 104.2.3 River Geography .. 114.2.4 River Quality and Pollution .. 114.2.5 Tbilisi Sea .. 124.2.6 Groundwater Flows .. 144.2.7 Water Supply and Sewerage Systems .. 14

5. ENVIRONMENTAL IMPACT ANALYSIS METHODOLOGY ANDIDENTIFICATION OF IMPACTS ......................................................... 15

5.1. Methodology ......................................................... 155.2. Potential Impacts of the Project ......................................................... 19

6. MITIGATION MEASURES ......................................................... 206.1. Prevention program to avoid undue disruption .206.2. Measures to minimize noise and vibration .216.3. Protection of air environment from the construction dust and pollution .216.4. Disposal of demolition and excavation debris .216.5. Disposal of water treatment silt and sludge .216.6. Avoidance of underground water pollution by the construction run-offs 226.7. Prevention of chlorine releases and minimization of impacts .226.8. Prevention of accidents during construction .226.9. Control of fuels and oils .226.10. Protection of vegetative cover ..................... 226.11. Supplementary measures ..................... 22

7. OTHER ENVIRONMENTAL ISSUES .............................................................. 238. IMPLEMENTATION AND MONITORING ......................................... 239. ENVIRONMENTAL MANAGEMENT AND MONITORING PLAN .. 2410. CULTURAL ISSUES .............................................................. 29Detailed Procedures for Issue of Environmental Permits for Category II Project ........... ... 30

TBILISI WATER SUPPLY AND SANITATION PROJECT

ENVIRONMENTAL ASSESSMENT AND ENVIRONMENTAL MANAGEMENTAND MONITORING PLAN

1. INTRODUCTION

This document summarizes the Environmental Assessment and the Environmental Managementand Monitoring Plan (EMMP) to ensure that the proposed Tbilisi Water Supply and SanitationProject activities will meet the requirements of the World Bank environmental assessment policyas described in OP/BP/GP 4.01, as well as Georgian laws and regulations on environmentalexpertise and impact assessment, and will follow the sound environmental practices. The purposeof this EMMP is to identify key environmental, social and human health impacts that will resultfrom the project, propose mitigation measures to address all significant adverse impacts, andestablish a monitoring program.

The investment program is to be financed by IDA under the proposed Tbilisi Water Supply andSanitation Project. The project would finance repair and rehabilitation of components of watersupply and sanitation systems. No new structure of significant size is envisaged to beconstructed under the proposed project. Given the nature of the rehabilitation work to befinanced under the investment program, the project has been classified as EnvironmentalCategory "B" according to the Environmental Screening Section of the World Bank's OperationPolicy (OP) 4.01.

The project is expected to bring significant public health benefits through better quality of treatedwater supply and environmental benefits, such as improvements in the sustainability of waterresources through reductions in losses and diminution in its irrational use and reduction ofenergy use through higher operational efficiency.

This report is divided in ten sections. After this introduction, Section 2 presents a brief projectdescription; Section 3 summarizes the current environmental policy, institutional, policy and thelegal framework; Section 4 presents the key environmental conditions; Section 5 overviews themethodology, and identifies the impacts associated with the project; Section 6 defines themitigation measures; Section 7 presents macro-environmental issues, Section 8 describes theEMMP implementation and monitoring arrangements; Section 9 presents EMMP, Section 10describes cultural issues associated with the project. A summary of the project environmentalissues and mitigation program is presented in Table 3.

2. BACKGROUND AND PROJECT DESCRIPTION

2.1. Project Background

After a protracted decline, in the years since independence the Georgia's water sector hasexperienced an accelerated deterioration in its ability to provide continuous, reliable and safe

water and wastewater services. The situation is extreme: if no action is taken complete collapseof these services in the capital city of Georgia is possible. Beyond its grossly mis-sized anddeteriorated infrastructure, Tbilisi Water Utility (TWU) suffers from a lack of finances, poormanagement and insufficient technical skills. In the financial area alone, the situation isprecarious: collected revenues cover less than 70 percent of operating costs, average collectionfrom domestic customers is about 50 percent of billings, and the build up of arrears is extensivewith accounts payable the equivalent of about one year of non-staff expense. Although it has noresources to spare, TWLU water production exceeds 1,300 liters per capita per day - many timeshigher than in EU cities.

Water and sanitation issues in Tbilisi, as in other CIS cities, include:

Poor conditions offacilities and equipment: Although 95 percent of the population is connectedto the water supply system, only a fraction have permanent, reliable service. Water andwastewater networks and treatment plants are in a state of severe disrepair due to poor planning,inadequate design, low quality of materials and equipment used, and lack of appropriate periodicmaintenance and repair.

Inefficient operations: For the same reasons above (inadequate design, poor quality of materials,and lack of maintenance), water treatment plants and distribution equipment (pumping stations)operate inefficiently and perform badly in terms of cost/output ratios, especially in regard toenergy consumption. Losses due to leakage in the network and internal plumbing are about 45percent. Water wastage throughout the distribution system exacerbates TWU inefficiencies,adversely effects costs of production and yields over-consumption of water resources andenergy.

Financial non-viability: Unrealistically low tariff levels (USD$0.013/m3 equivalent for domesticconsumers) combined with poor collection rates (70 percent overall but only 50 percent fromdomestic consumers) put TWU in an un-viable financial situation where continued operation ispossible only by resorting to the build up of inter-enterprise arrears. The lack of capacity of theState and municipal government to finance investments and the minimal funding formaintenance results in a self-reinforcing trend to further degradation. A key issue is to persuadethe population that continued (much less improved) supply of safe water requires the cost ofservices to be recovered. Because Government is not capable of continued funding of theshortfall, and recently privatized TWU suppliers - notably for energy - increasingly will bereluctant to provide services without payment, it is inevitable (and equitable) that consumersneed to be allocated and pay more of the costs of their consumption.

Lack of human resource capacity: Poor pay and working conditions have led many competentstaff to leave TWU. While staff currently responsible for water supply operations demonstrategreat resourcefulness in keeping the dilapidated systems alive and running (albeit at a low levelof quality), there is an urgent need to upgrade the managerial and technical skills of existingstaff.

Faced with these pressing issues, the Government strategy is a forceful one and embodied in thecurrent project - transfer of Tbilisi Water and Sanitation System to an experienced InternationalWater Operator under a Lease Contract for a period of 10-15 years. A proposed project conditionwill be tariff increases for domestic customers - two-fold increase in the first year, and gradual

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increase in the following 5 years, so that at the end of the 5-year period, the domestic tariffcovers 100% of the operation and maintenance costs, and some percentage of capital costs.

2.2. Project Objectives

The main objective of the proposed project is to help the Tbilisi Municipality in improvingUrban Water Supply and Sanitation System through increasing its managerial, operational,technical and economic efficiency.

Specifically, the project will assist TWU in improving the quality and reliability of water supplythrough: (a) reducing technical water losses by rehabilitating deteriorated network sections aswell as improving network design and operations; (b) conceiving and implementing a program ofeffective demand management to reduce excessive water consumption and wastage; (c) repairingand/or replacing energy-inefficient and broken down pumping systems; and (d) increasing thequality of water by rehabilitating key elements (e.g., filter beds) of the existing water treatmentinstallations.

In parallel to these technical measures, the project will contribute in increasing economic andoperational efficiency of Tbilisi Water Supply and Sanitation Sector with a view to: (a) introduceinformation and other management systems; (b) implement advanced operational methods andachieve cost effectiveness; and (c) increase revenues through tariff adjustments, improve billcollection, and reduce arrears.

These actions along with the proposed investments will be implemented through a lease contractbetween TWU and an experienced private utility operator. Under the lease contract, the operatorwill accept the system under the lease for approximately 10-15 years. During this period theOperator will have full responsibility for management, operation and maintenance of TbilisiWater and Sanitation System, and for procurement of system investments. At the same timeTWU will remain the owner of the Assets, and will have financial responsibility for investments.Given the advanced state of deterioration of TWIU's systems and services, the severe shortage offinancial resources, and the extremely weak management and operational capacity, the proposedproject aims at reversing the present downward trend and helping to create the initial conditionsfor sustainability. If this project is successful, private sector involvement is expected to continueat a higher level of commitment and risk than possible today.

2.3. Project Components

2.3.1 Project Component 1 - Repairs and Rehabilitation Fund (estimated cost - US$ 20millions)

The Repair and Rehabilitation Fund will provide TWU with money for investments to improveO&M and support rehabilitation of the water and sewerage system. The Operator will develop anannual plan for the use of the Fund to be approved by TWU. The first annual plan (Plan) will bedue 60 days after the start date of the contract. Subsequent Plans will be due 90 days before theend of the first, second, third, and forth contract years. Any amount not expended in anyparticular year will be carried over to the subsequent year(s). After approval of the Plan by

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TWU, the Tbilisi Water System Operator will implement the Plan by procuring on behalf ofTWU works, supplies, materials, equipment, and/or select consultants in accordance with WorldBank procurement guidelines. Invoices for the purchased supplies, materials, equipment and orcontracted labor will be paid by Tbilisi Water Utility Development Bureau (TWUDB), theProject Implementation Unit from the specific restricted account or Special Account inaccordance with World Bank's disbursement guidelines.Repair and Rehabilitation Fund will be financed by the IDA Credit, Municipality of Tbilisi co-participation monies (15% of the net Project costs), and the variable monthly lease paymentspayable by the Operator.

2.3.2 Project Component 2 - Technical Assistance

TA is included to: (i) fund Project Implementation Unit (PIU) during the project; (ii) provideindependent auditors to monitor the operator's technical, environmental and financialperformance; (iii) provide consultants to establish proper financial management and accountingsystems for the PIU and for annual financial audits of TWU and the PIU; and (iv) carry outrelated studies (monitoring of social impacts and development of the regulatory framework).

3 The PIU established under TWU has overall responsibility for coordinating all projectpreparation and implementation, including the supervision of the implementation of theEMMP. The PIU will also be responsible for disseminating experience gained under thisproject and ongoing activities to other utilities. The PIU will act on behalf of TWU towardsthe Ministry of Finance (MOF) and Tbilisi Municipality, the Operator, donors, and otherGoG ministries.

To achieve the above objectives, the project provides continued funding for PIU staff recruitedduring project preparation and:

* Technical and financial auditors to provide independent assessment of base year datareported by the Operator and of the Operator's annual performance in order to verifyachievement of performance targets;

* Financial management and accounting system consultants to improve the project accountingsystem so that it complies with the Georgian laws and International Accounting Standards;

* Financial auditors to present, within six months of closing of the fiscal year, an audit of PIUand TWUJ financial statements, together with a management letter, to certify that accountingand financial controls are adequate and in accordance with internationally acceptablestandards;

* Social assessment specialists to monitor the project's impact on poverty reduction andimprovement of quality of life, namely public health.

* Advisors to help establish the necessary regulatory framework for continued involvement ofthe private sector in managing water and wastewater service provision, such as developing ofa Concession Law and setting up a Public Utilities Commission.

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* Equipment, furniture and supplies to support continued functioning of the PIU during projectimplementation.

2.3.3 Project Component 3 - Refinancing of PPF

A US$1.2 million Project Preparation Facility was used to finance project preparation, includingPIU establishment, technical and financial pilots, institutional study including lease contractpreparation, and other relevant studies. This component will refund the PPF advance.

2.3.4 Project Component 4 - Tariff Subsidy

Project implies doubling consumers' tariff upon beginning lease contract, and its gradual increaseduring the following 4-5 years to a level when tariff exceeds the O&M costs.It is anticipated that at the initial stage of the lease contract Operator's proposed tariff for systemManagement, Operations and Maintenance will exceed consumers' tariff. Applicable in this casethe Tariff Subsidy component is earmarked for covering the difference between operators andconsumers' tariffs.

2.3.5 Project Component 5 - Redundancy Payments

Current operating staff of TWU will be transferred to the future operator of Tbilisi WaterSystem. It is expected that the Operator will reduce the operating staff in order to achieveplanned staff per connection rate.

The Bank has agreed to allocate the portion of the Credit to finance the redundancy payments todismissed staff.

3. INSTITUTIONAL, POLICY AND LEGAL CONTEXT

This section provides a summary of the current institutional, policy and legal setting for theproposed water supply and sanitation project.

3.1. Institutional and Policy Context

After the disintegration of the USSR and following Georgia's Declaration of Independence,national policy focused upon the creation of a democratic legal state based upon the principles ofa market economy. The modern environmental policy in Georgia was initiated with the newconstitution delivered on August 24, 1995. The constitution stated that a healthy environment isa right for all Georgians, and that the state should therefore protect the environment and use thenatural resources so as to assure current anid future generations access to the environmentalresources that they require. The Ministry of Environment Protection (MEP) in cooperation withthe Parliamentary Commission on Environment Protection and Natural Resources began draftingnew environmental legislation.

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As a first step, the Parliament passed Laws on "Plant Protection against Harmful Organisms" and"Land Protection" in 1994. These laws regulate the harvesting of plants in nature, and the use offertilizers. They take into account the need to protect the landscape as well. The same year, theParliament passed amendments and changes in the Forest Code, while the MEP became theMinistry of Environment and Natural Resources Protection (MENRP).

MENRP, as part of the Georgian Cabinet, is responsible for the implementation of the StatePolicy on Environmental Issues. In 1994, MENRP drafted the framework of the EnvironmentalProtection Act. This was aimed at national action to provide a clean and healthy environment forall inhabitants and to protect the diversity of terrestrial and marine environments, by establishingprinciples that ensure sustainable use and development of natural resources.

Essentially, Georgia's legislative framework is of recent origin, and comprises the following'Laws of Georgia' pertaining to environmental protection:

1. "Environmental Protection Act" (1996)

2. "Environmental Permits Act" (1997)

3. "State Ecological Expertise Act" (1997)

4. "Water Act" (1997)

In the preparation of these Acts, references have been made to the legislation of other countries,including the EC, USA, and Canada.

With regard to the institutional context for this project, the state institutions concerns with theenvironmental issues relating to the development of the water supply and sanitation sector are theMOEPNR and the Ministry of Health. The latter plays a key role in the monitoring of possibleimpacts on public health, such as outbreaks of waterborne or water-related diseases. In order tosafeguard public health, the MOH takes samples from groundwater wells that are used fordrinking water production, near surface water intakes of drinking water facilities, and fromsurface water in recreational areas. While MOH's interest is confined to the safeguarding ofpublic health, the MENRP is responsible for the management of the entire water resourcessystem.

Tbilisi Water Utility (TWU), in turn, is concern primarily with supplying protected water to thecitizens, but not about preventing sewage pollution of its water sources in the first instance. Itmanages a system of infrastructure that extends into rural communities, and for which ownershipand control responsibilities are unclear for some sections. For example, sewage from upstreamcommunities is channeled to Tbilisi, combined with Tbilisi sewage within the city limits, andthen conveyed to a distant wastewater treatment plant that is owned by yet another downstreamentity or community. (Ownership of the outfall sewer is likewise unclear). Multiple ownership ofa connected water or sewer network constrains the TWU's ability to make critical and costeffective long-term network decisions.

3.2. Environmental Protection

The Law on Environmental Protection (1996, amended June 2000) is the most important piece ofenvironmental legislation to date. It describes all of the main principles of and mechanisms for

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environmental protection throughout the whole of the Georgian territories; including, territorialwaters, airspace, continental shelf and the special economic area.

Although important principles are enunciated in current environmental law, many legislative andinstitutional changes are needed to achieve their implementation. The law makes first steps indistribution of functions between institutional structures, as well as between local and centralgovernment bodies.

Local authorities are given adequate powers to manage environmental protection, and to ensureprudent utilization of natural resources, and may set more stringent environmental standardsbefore granting pennission. While this is a common feature of the law in many countries, itsefficacy is questionable, since the provision is often misused. Levels of competence being whatthey are in many newly-created departments, when in doubt it comes in handy for environmentalregulators to avoid future responsibility by setting more stringent standards.

Enforcement in any case is invariably lax mostly due to economic and institutional factors.

3.3. Law on Environmental Permits and Other Environmental Regulations

All economic related activities carried out in Georgia are subject to a system of environmentalpermitting. The environmental permitting procedure is set out in two laws: the Law onEnvironmental Permits (EP), and the Law on State Ecological Expertise (SEE), both of whichcame into force in 1997. The Law on Environmental Permits regulates procedures for issuingpermits, and covers Environmental permits, EIAs, and public information and participationissues in decision-making procedures. According to the Act, all projects are divided into fourcategories according to their size, importance and potential impact on the environment.Municipal facilities including water supply and sewerage systems falls under category II. Allfour categories must undergo State Ecological Expertise in order to be issued with a permit;however, those activities which are considered to be of the first (highest) category will, as part ofthis process, require an Environmental Impact Assessment (EIA) to be carried out by the projectproponent. Procedures for projects in Categories I and II require public hearings to be conducted,while for Category III projects, provision of public information would suffice. For Category IVprojects, public information is not obligatory.

The Government of Georgia (GOG) fully supports the following international conventions on theenvironment and the protection of nature:

* Rio Declaration

* Convention on Climate Change

* Bio-diversity Convention

* RAMSAR Convention

* Vienna Convention for the prevention of Transboundary Air Pollution

* Basle Convention for the Transboundary Export of Hazardous Wastes

* Helsinki Declaration on Environmental Protection and Human Health in Europe

* Black Sea Convention

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3.4. Public Consultation

The new Constitution adopted in August 1995 guarantees every citizen full, objective, and timelyinformation about their living environment, and allows their participation in important decision-making procedures, both as individuals and NGOs. Under Article 9 of Environmental ProtectionAct, basic Environmental Education is obligatory and universally accessible to all Georgiancitizens.

According to the World Bank's Operational Directive on Environrmental Assessment (OD 4.01),affected groups and NGOs must be consulted as part of the environmental assessment process,and the draft EIA must be disclosed to the public for review and comment prior to finalizing thereport.

Public consultation undertaken by the Project Team included

a) Submission of the Environmental Management and Monitoring Plan (EMMP) to theMinistry of Environment and Natural Resources Protection (MoENRP) - EMMP wassubmitted to the Department for Environmental Licenses and Ecological Expertise ofMoENRP for review and approval. Approval was issued by the Department on 6December 2001 (Letter No. 13-12/139 by Mr. S. Tsabadze - Head of Dept.). Commentsincluded recommendations to include requirement of approval by the MoENRP oncertain measures (reconstruction, waste disposal etc.) to be undertaken by the contractors,and to review the conditions of the license issued by the MoENRP to TWU, taking intothe consideration the reduced consumption of the water as a result of leakage reductionprograms. MoENRP acknowledges that the latter recommendation will not form the partof EMMP and will take place during the Project implementation.

b) Public Information Campaign and Publishing of the Lease Documents - The PIU as partof the Public Consultation has undertaken Public Information Campaign earmarked atinforming public on the planned activities under the TWSSP and expected outcomes ofthe Project. The PIU made Lease Documents (that outline, inter alia, policies andprocedures to be followed under the Project) available to the public for the review andcomments. Lease Documents were distributed among all key stakeholding state agencies,and the society. Comments were incorporated into the final version of the LeaseDocuments.

Implementation of the EMMP will be monitored and publicized during the implementation ofTWSSP by the PIU. Regular reporting to, and inspections by the MoENRP and other relevantstate agencies will form the basis for the State monitoring.

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4. ENVIRONMENTAL OVERVIEW

4.1. Physical Setting

Cradled in the Caucasus mountains between the Caspian and Black Seas, Georgia is bordered byRussia on the northern side, by Turkey and Armenia to the south, and by Azerbaijan to the south-east and east. Tbilisi, the capital city, is nestled in a valley through which flows the MtkvariRiver. The city has a population of about 1.4 million.

The main part of the Tbilisi City region is situated at the eastern end of the Trialeti Range, whichis divided into two asymmetric parts by the Mtkvari. Latitudinally directed parallel ranges(Annazi, Lisi, Mamadaviti, Tabori, and Teleti) characterize its right part. Right-bank tributariesof the Mtkvari River and small depressions separate them. The left part is relatively low andcharacterized by terrace relief.

The highest point within the city is on the Funicular Plateau 725m, with the highest summit ofUdzo (1418 m) outside the city borders. Hillsides are intensely dissected in several places bynumerous gorges. Throughout the city these gorges have been filled up and developed intosuburbs like Davitashvili gorge, Funicular gorge, Leselidze Gorge, etc. Geologically,Palaeogene and Neogene sediments build up the territory of the city. Quaternary deposits ofdifferent ages overlay them.

Tbilisi has a moderate climate. Dry and hot summers and temperately cold winters arecharacteristic of the area, which is transitional between dry sub-tropical and temperately humidsub-tropical climates. Annual average ambient temperature fluctuates from +7.40 to 12.70 C.The coldest month is January, with average ambient temperatures of +0.3° to 0.90 C. Thewarmest month is July with an average temperature exceeding 240 C and absolute maximal of400 C or more.

According to available meteorological data for the lower parts of the city, average annualatmospheric precipitation is about 560 mm. Maximum precipitation occurs in May (from 78 mmto 149 mm). January is the driest month (19 mm to 39 mm) According to the rainfall distributionin the city, the precipitation is good in spring and poor in winter. The seasonal share ofprecipitation is as follows: Spring - 186 mm (34% of annual); Summer - 169 mm (30%);Autumn - 132 mm (23%); and Winter - 72 mm (13%).

Thickness and duration of the stable snow cover changes in Tbilisi according to absolutealtitudes. In the populated area of the city, stable snow cover is rare and melts quickly. Firstsnow comes in December and the last during the second half of March.

Predominant winds are from the north-west and south-east directions. North-western winds havehigh speeds and are stormy in nature. In peripheral areas wind speeds reach 25-30 m/s.

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4.2. Environmental Status

4.2.1 Air PollutionIn a report dealing primarily with water supply and sanitation, a discussion on air pollution andsolid waste disposal may be considered out of place. Nonetheless, it is briefly dealt here alongwith other issues necessary to present a comprehensive glimpse of the environmental problemsfacing the city and the region.

Of all Georgia's cities, Tbilisi has the highest air pollution levels. Most of the air pollution inTbilisi arises from transportation vehicles (72%), and the thermal power plant consuming fuel oiland natural gas.

The emission of air pollutants by motor vehicles into the ambient air of Tbilisi is listedchronologically in Table 1.

The figures in the Table are considered to substantially underestimate the actual quantities andallow for the amount of fuel supplied to the public sector only. There is no informationregarding the private sector use of fuel or vehicles. The significant drop in air pollution after1991 results from the slow down in economic growth and decline of industrial activities in thecity. There is a dire need to prevent worsening of the air pollution situation in Tbilisi, on accountof its location in the valley, and the possibility of atmospheric inversions trapping the airpollutants and resulting in episodal morbidity and mortalities.

Table 1: Annual Air Emissions by Motor Vehicles in Tbilisi (Thousand Tons).

Year Pollutant Emissions1980 166.21985 246.11986 258.21987 271.31988 288.91989 294.11990 223.51991 139.61992 36.3

4.2.2 Solid Waste DisposalThe Municipality of Tbilisi has 3 authorized landfills, all of which are poorly managed and inpoor condition. A further 16 dumping sites, unauthorized and uncontrolled, exist within the citylimits. Several private companies contracted by the Municipality are currently providing wastecollection and disposal services in two districts of Tbilisi.

Before 1992, over 40 industries in Tbilisi used or generated radioactive materials or waste.Traditionally, all radioactive waste in Georgia was stored at a burial site near the Tbilisi airport,

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however since 1982 there have been no new deposits at this site. It is not known where any laterwaste has been stored, but it is feared that a significant amount of radioactive waste may bestored at individual industrial premises. Equally troubling are accounts that such waste iscommonly deposited into the municipal landfills.

4.2.3 River GeographyThe Mtkvari River represents the main hydrographic unit of Tbilisi city, as indeed it is of thewhole of Georgia. Originating in Turkey, it flows for approximately 300 km through Georgia,draining about 15,000 sq km, or 23 % of the country. Upstream of the capital the Mtkvari isjoined at Mtskheta by the Aragvi, the catchments of which provides virtually all of Tbilisi'swater supply. Flowing through Tbilisi and Rustavi before entering neighboring Azerbaijan, theMtkvari discharges into the Caspian Sea.

Within the city the Mtkvari flows through a 25 km course. The average inclination of the riverbed is 2.24 m per 1 km. Seasonal discharges are as follows: Spring - 48.5% of annual discharge;Summer - 26.9%; Autumn - 13.7%; Winter - 10.9%. The average annual discharge near Tbilisiexceeds 200cubic meters/s. The "Ortachalhes" hydro-electric power station located on the riverregulates the water level.

4.2.4 River Quality and PollutionWhile the river is relatively unpolluted when it enters Georgia, the Mtkvari is severely degradedby the time it flows into Azerbaijan, an important transboundary issue between the two countries.In 1990, a joint Georgian Green and Azerbaijani Green Team conducted a reconnaissance of theMtkvari river through Georgia. Their report concludes that the river's water quality declinesmost severely between Hashuri and Rustavi, with pollution peaks immediately below Gori,Tbilisi and Rustavi.

Mtskheta, the old capital, and Tbilisi itself, as well as settlements in the Aragvi River valleydownstream of Zhinvali reservoir are theoretically served by piped sewerage. All flows aresupposed to be conveyed through long lengths of sewers to Gardabani about 30 km south-east ofTbilisi, and treated there in a 1000 Megalitre/day (ML/d) Sewage Treatment Plant (STP). Inpractice, the Gardabani STP is non-operational, as is the outlet from the town scheme atMtskheta, and unabated pollution of the Mtkvari's water resources occurs all the waydownstream of Mtskheta.

Even in Tbilisi itself, collection sewers along each bank of the Mtkvari river convey only 45% ofthe city's sewage into a 27 km x 3.3 m diameter outfall past Rustavi to Gardabani. (Gardabaniitself is not connected to the STP and only about half of Rustavi town is sewered).

The remaining wastewater flows discharge untreated directly into the Mtkvari River because keylinks in the system have never been constructed. Not that the passage of the wastewater throughthe Gardabani STP makes any significant difference, because the STP is in such a seriously-dilapidated condition. Some of its units, like the sludge digesters, have never been completed.Even the completed units are in a severe state of disrepair and many of them are completelydisused. The wastewater undergoes a ritual passage through some physical 'treatment' units inthe STP, allowing some reduction in BOD and suspended solids, before it is discharged into theMtkvari River.

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Fortunately as a result of the leaking water mains and infiltration of groundwater into the sewers,the sewage entering the STP is of such low strength that further pollution of the river isminimized.

Tbilisi has the oldest water supply system established in Georgia in 1887 and virtually all issourced from the Aragvi river, a major tributary of the Mtkvari. At the present day, Tbilisi'swater resources are impounded by the Zhinvali reservoir in the upper river valley. The ZhinvaliHydro-electric scheme on river Aragvi was constructed in 1985 by the 'State Company forHydro Energy Construction' and the reservoir serves electricity generation, water supply, andirrigation. The Zhinvali reservoir has a capacity of 520 million cubic meters (Mm3 ) and has acatchment area of 1900 square kilometers.

Even at source, the Aragvi river is not protected against sewage pollution: several small villagesand the resort community of Pasanauri are in the catchment area. These communities eitherdischarge untreated sewage directly into the reservoir or have sewage disposal systems thatwould allow sewage to be washed into the reservoir during heavy rains. Thus the potential forfecal contamination of the source water is very much present.

Water from the hydro scheme outlets into a I Mm3 Reregulating Pool about 10 km downstream.From the Pool, water reaches Tbilisi in two ways. About half is transported by gravity over adistance of 32.5 km from the Pool to the Tbilisi Sea; by closed conduit, tunnel and pipe. Thebalance flows back into the Aragvi from which it is again abstracted using infiltration ponds andshallow wells.

The sewage from major settlements along the entire 30 km stretch of river downstream ofZhinvali reservoir is conveyed through a long sewer down to Mtskheta. One of the chief reasonsfor sewerage in the Aragvi river valley is the dependence of public water supply in Tbilisi ongood quality water from the infiltration schemes situated along the river. Even so, severalvillages including Natakhtari and Misaktsieli (about 12,000 population in total) have nosewerage service.

However, most sections of the sewer are severely damaged and sewage from villages likeZhinvali, Dusheti, and Bulachauri never reaches Mtskheta and Tbilisi, but infiltrates into theground or flows directly into the Aragvi river. To make matters worse, long lengths are locatedin the protected sanitary zones of the artificial recharge and river bank filtration schemes forwater supply. The damaged sewage collectors even cross the sedimentation ponds of theinfiltration schemes at Bulachauri and Choporti. Biological contamination of the Aragvi riverand of the river filtrates produced at Bulachauri occurred several times in 1996. This is ofparticular concern as the river filtrates receive chlorination treatment only before beingdistributed as drinking water in Tbilisi.

4.2.5 Tbilisi SeaIn 1951, an artificial lake was created near Sarngori by impounding water on the north side ofMakhata mountain, in a natural upland depression where 3 saline ponds were situated. Later thiswas named by the population as the "Tbilisi Sea". The storage capacity of the Sea in 1958 was308 Mm3. By 1984 this was said to have decreased to 156 Mm3, with a water surface area of 11sq km, a width of 1,200 m, a length of 9,000 m and a maximum depth of 28 m.

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Initially, the Sea was intended to receive flows from the Iori River by means of an irrigationcanal system. With the completion of the transfer main from the Reregulating Pool, the Sea isalso fed by the excess flows not immediately required for potable water. Thus it serves as anatural sedimentation basin during normal times. Typically excess flows are about 3 cu mJs,however during snowmelt the Zhinvali water is too turbid for economical treatment and thewhole flow is turned into the Sea. For a period each year (usually about a month) the transfermain is closed down for repairs and maintenance, and whenever the water transfer is interruptedfrom the Reregulating Pool, the Tbilisi Sea acts as a storage basin. For about a month beforesuch periods, the Sea is filled up with additional supplies of water. Since its construction theTbilisi Sea has never been desilted.

The transfer main serves two water treatment plants (WTPs), Grmagele (directly) and Samgori(by pumping). Since 1957 the Tbilisi Sea has been used to supply raw water to the WTPs whendirect supply via the transfer main is unavailable or unsuitable (from 1 m3/s in 1957, to 1.5 m3/sin 1967 and from 9 to 10 m3/s nowadays).

Therefore the Sea level varies considerably - according to the water flow from the Iori River andthe inflows from the Reregulating Pool, and use for potable water and irrigation.

The catchment of the Tbilisi Sea is characterized by a dry, warm climate, and minimumatmospheric precipitation, so the Sea has come to be used as a multi-purpose reservoir for watersports and recreational purposes, as well as irrigation and water supply.

Investigations carried out over many years have shown that multi-purpose usage of Tbilisi Seanot only impacts on the environment but also completely changes the living conditions of peoplesettled throughout the adjacent area. The difficult social and economic situation in Georgiaduring recent years has largely forced people to use the Tbilisi Sea for short periods ofrecreation. This, in its turn, has caused a rise in ecological, recreational and aesthetic problems.

In summer the Tbilisi Sea hosts about 1,000 people a day for recreation, especially from thosedistricts which are close by (Gidani, TEMQA, Nadzaladevi, Vazisubani and Varketili).Increased anthropogenic influence on the Sea has caused worsening of the water quality andposes an ecological risk to the surrounding environment.

The first-ever comprehensive survey and study of the Tbilisi Sea has been conducted byAQUAMEDIA, an NGO specializing in water quality studies. According to the study, 100% ofrespondents considered the existing conditions of the Tbilisi Sea and the adjacent area asunsatisfactory. 17% of respondents reported the cleanliness of the Sea area as satisfactory. 70%of respondents reported the condition and vegetative state of the beaches and adjacent areas assatisfactory, but 80% considered the beaches to be poorly maintained.

In the opinion of respondents the number of people on the shores during summer is extremelyhigh. People swim in prohibited areas, despite the warning signs. 100% of surveyed peoplestress that the Tbilisi Sea and adjacent land is used for watering cattle and as pasture.

The practice of car-washing causes the risk of water pollution by oil products and detergents.Detergents are highly stable in water and do not readily degrade. They create froth and suppressthe natural self-purification processes in the Sea.

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In the resort facilities situated in the areas adjacent to the Sea live refugees and displaced peoplefrom various conflict zones of Georgia. The sewers serving these resorts are degraded and life-expired while due to numbers and excessive waste and consumption of water, the seweragenetwork is substantially overloaded.

To make matters worse, a length of sewer passes around the Tbilisi Sea terminating in a pumpingstation which does not function for much of the time on account of acute power shortages.Sewage then overflows directly into the Sea at a point directly opposite the intake for theGrmagele WTP.

Although the Tbilisi Sea appears to be able to handle existing anthropogenic pollution by meansof self-purification processes, there are no grounds for complacency. Increased human impacton the Sea is increasing because anthropogenic influence increases day by day. Consequently,the risk of pollution becomes higher as exemplified by recent epidemic of Amebiasis.

Since the Tbilisi Sea is used for supply of potable water it belongs to the "Ist category" ofreservoirs and as such should be protected against contamination.

As the Operator will be responsible for supplying safe water to the customers, he will prepareand implement the programs for raw water sources protection, including Tbilisi Sea. Investmentswithin these programs will be financed by the Project funds.

4.2.6 Groundwater Flows

The Tbilisi sewerage system has many reported problems, quite apart from the missing links.Many sewers are damaged, leak into the groundwater or are improperly connected to the largecollectors.

Low pressures in leaking water mains can result in groundwater being drawn into the watersupply, with risk of contamination. Cracked and broken sewer pipes and pipe joints form a routefor ground water to leak into the sewerage system or for foul water to leak out. Blockages in thepipes cause leakage of foul water and sometimes surface flow which also finds its way into thesoil.

Where sewers are damaged in the same area as leaking water mains, the risks to health becomesevere.

The project will address this problem via properly planned and financed works, that will beaimed at prevention of contamination of groundwater. Works will be financed from the Projectfunds, and implemented by the Operator through works contractors.

4.2.7 Water Supply and Sewerage SystemsThere are six distribution zones in Tbilisi. Water is supplied by gravity to the lower city, alongthe Mtkvari river, while pumping is required to service higher areas. Elevations vary from 350m to 1400 m. Water usage is extremely high by world standards. The estimates of per capitaconsumption vary widely from 800 to in excess of 1,000 liters per day. If it is accepted that the

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maximum 'real' demand for water is no more than 250 liters per person per day, as is typical forother cities in Europe, then clearly much of the water used is lost through leakage, wastage, orotherwise unaccounted for.

The distribution system of Tbilisi consists of cast iron and welded steel pipes. Most of thesystem is life-expired and in urgent need of replacement. Before 1990, the TWVU used to replace30 to 35 km of water pipes per year, whereas only 2 km of pipe have been replaced per yearsince 1990. Levels of leakage have increased consequently. Also, even though local soils arevery corrosive, the pipes are given no protection by way of protective coatings or cathodicprotection.

In situations where leaky water supply pipes are located next to leaky sewage collectors, crosscontamination can occur when the water supply is interrupted (due to power failure) and negativepressures are allowed to develop in the pipes. In Tbilisi, outbreaks of intestinal diseases oftenoccur from the adjacent damage of water supply and sewerage system' s.

According to the MENRP there are 87 pipes that discharge directly to the Mtkvari that officiallyought to be connected to the municipal sewer. This mainly concerns illegal connections betweenthe sewer system and the rainwater system (storm water overflow system). Lack of funds aresaid to be the main obstacle for changing this undesirable situation.

There is a separate water system for city irrigation of parks and trees in Tbilisi, which is operatedonly during summer time. Raw water is taken from Mtkvari river. The system is subordinatedto TWU, which operates the pumping station and the primary distribution. The irrigationnetwork in the parks itself is not managed by TWU.

5. ENVIRONMENTAL IMPACT ANALYSIS METHODOLOGY ANDIDENTIFICATION OF IMPACTS

5.1. Methodology

Specific investments to be funded from the project's Repair and Rehabilitation Fund will beidentified by an international water operator to be recruited under the project. Developmentprojects generally involve a multitude of adverse as well as beneficial impacts. It is neitherfeasible nor desirable to consider all of them. In practice, only those which are most likely, andthose which may have severe adverse consequences can be examined. The Scoping Process helpsdo just that. Scoping of impacts involves identification of probable environmental impacts,short-listing them, and validating them through field visits.

Identification of impacts is a major step in the ETA process, and leads on to other steps such asquantification and evaluation of impacts. In order to identify and evaluate the impacts associatedwith each sub-project, it is necessary to establish a general checklist and describe the existingenvironmental quality in the area under development and the activities of the sub-project whichmay cause environmental impacts.

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While a number of techniques are available for identification of impacts, the "Network Method"which involves understanding of the 'cause-condition-effect' relationship between an activityand environmental parameters is proposed for use by the international water operator.

This method identifies the impacts that would be triggered by the proposed activities andprovides a "Road Map" type of approach for the identification of second and third order effectsfrom the primary impacts. The major advantage of this type of approach is that it allowsidentification of the impacts by selecting and tracing out the events as they are expected to occur.

The purpose of this exercise is to account for the project activities and identify the type ofimpacts which would initially occur. The challenge in constructing 'cause-condition-effect'networks is achieving the degree of detail necessary for informed decision-making. If theenvironmental condition changes are described in too much detail, with all possibleinterrelationships, the resulting impact networks would be too complex to be really useful.

An example of the impact network is shown in Figure 1 for one candidate investment - "WaterTreatment and Clear Water Storage".

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|Rehabilitation of water production facilities|and distribution network

Primary Safe & Sludge Noise Improved Financial: Impacts potable generation generation water supply imposts

. water & disposal | on Community

.............. 1..AHealth Risk

~ Secondary : Improved Consumer Groundwater Impairment of Savings in

,Impacts . Health satisfaction contamination land / receiving publicdue to leachate water quality expenditure

Tertiry : Reduced NtEhneTriacs Morbidity/ Social well-being Economic

imortality PI Gains lo Economic Output17

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The most probable primary and secondary impacts, both adverse as well as beneficial, of proposedinvestments should be summarized according to the sample given in Table 2. These then would bevalidated by field visits to the actual sites.

Table 2: Checklist of Potential Impacts Associated with Implementation of Proposed Investments

c w

CL M~~~~~~~~~~~L

CD~~~

O0 2

:'i~~~~~ :oE.o t E3i {- '= iE 2 ff 0 0 C 00

> E 0 e_ 0) >

.2 E o z Cs ~ 0 . 0. a z *A 0044i

| 0 Pote77 7|Potentiaz Benficial Impacts

Note that many of the beneficial impacts may be long-term, while adverse impacts can be short-termtransitory impacts, which are capable of being reversed or mitigated by suitable remedial measures.

For instance, urgent repairs to water and sewer mains may involve cordoning off roads over shortstretches, diversion of traffic for brief periods, etc. This may result in temporary discomfort or airpollution and noise pollution for the people in the vicinity. But these are transitory and reversibleimpacts which could be mitigated to a large extent. The beneficial impacts are more long lasting andfar outweigh the transitory adverse impacts.

In the selection of projects to be financed, maximization of environmental benefits should be one of theconscious criteria adopted. For example, a candidate investment is priority repairs to water and sewerlines. The priority classification should be based on prevention of cross-contamination as a firstpriority, and replacement of corroded water mains and leaking sewers, etc in key areas s a secondpriority, with a view to maximizing public health and environmental benefits.

Projects selected for financing should not impact on any cultural, religious, or historical monuments, orbiological diversity (no endangered species of flora or fauna) . The projects also should not entail anydisplacement and/or involuntary resettlement of people. Since most of the rehabilitation work will be

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done in properties and facilities owned by TWU or located in rights-of-way assigned to municipalinfrastructure, the proposed project will not entail any resettlements and will cause no impacts tostructures of cultural importance.

5.2. Potential Impacts of the Project

Potential impacts of the project would relate to:

Improvement in Public Health: The project will increase the reliability of the water supply service todomestic customers and significantly will improve the quality of water (especially physical andmicrobiological parameters) supplied to the consumers, which should lead to a reduction in morbiditywith water-borne diseases and a general improvement in public health. This is the most importantbenefit of the project. Proper monitoring and testing procedures would have to be implemented andfollowed.

Effect on groundwater flows and watertable: General groundwater flows and average watertable willnot be adversely affected by the proposed project, as extraction of groundwater will not be increased.

Protection of water sources: The Operator will prepare and submit the program for protection of thewater sources. The program, upon approval by the TWU and responsible Governmental authorities willbe implemented by the utility operator.

Disposal of water treatment sludge: Sludge from the water treatment's sedimentation pond cleaningduring both implementation and operation is a potential source of soil and water contamination.Appropriate disposal and utilization procedures of sludge will be defined and enforced.

Safety hazards from chlorination process: Chlorine, as a poisonous gas, is always a source of hazard tohuman health. Chlorine used for water disinfection will be subject to standard measures of protectionand air control.

Pollution by construction run-offs: Negative impacts to groundwater are expected to be temporary andof minor significance. Civil works will be conducted during very short time, and weather conditions inTbilisi will contribute to the limitation of such effects. Additional measures and enforcement of localnorms for protection of groundwater will be implemented.

Temporary inconvenience during repair and rehabilitation works: These impacts will occur during therehabilitation works on transmission pipelines and distribution network, usually for a short-term andaffect different people at different times. The negative effects include dust from construction activities,noise during trench excavation, possible effect of vibration on old buildings, restriction on access tobuildings, closure of roads and section of roads causing increased traffic, and movement ofconstruction traffic. For residents of the streets where these works are being conducted, these impactswill be felt but only for a short period. Impacts will also be moderate for people using or passingthrough the affected areas. Appropriate mitigation measures and construction methods will be in place.

Disposal of demolition debris: Demolition debris will be generated during the rehabilitation works ontreatment plants, transmission pipelines, and distribution network. These effects will be localized, andwill be minimized by means of appropriate removal and disposal procedures.

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Damage to existing utilities: Old water networks, electricity and telephone lines may be inadvertentlydamaged during the rehabilitation works. Therefore, the necessary measures will be taken in theconstruction phase, including coordination and clearance with the appropriate government agencies.

Safety hazards from construction activities: No major hazards are expected the construction of theproposed project elements, as long as proper construction practices and safety procedures are applied.

Spillage offuelfrom construction: The use of fuels and oils will be very limited given the small size ofthe works, and therefore potential impacts are of little significance. However, proper constructionpractices must be ensured to avoid contamination of soils and water.

Damage to trees and vegetative cover: The impacts on vegetative cover will be short-term, localized,and associated with construction. They can be mitigated by adopting proper measures and contractprovisions with the contractors.

Damage to cultural resources: No archeological or cultural resources are expected to be encounteredduring project implementation since works consist in rehabilitation of existing systems whereexcavations have been conducted before.

6. MITIGATION MEASURES

The required mitigation measures for the project are standard and widely use in construction practicessupervised for achievement of international standards of quality. Having an international operatorrunning the operations of the utility under a lease contract with specific environmental clauses willensure compliance with these measures.

During project implementation, specific environmental management plans will be requested.

The following mitigation measures shall be adopted and applied to the project when required:

6.1. Prevention program to avoid undue disruption

There will undoubtedly be some short-term inconvenience and traffic disruption. To avoid undueinconvenience the construction program that will be prepared by the Operator and submitted to theTWU for review and approval should include the following:* Specify the work implementation sequence for pipeline rehabilitation, such that local

inconvenience is avoided to the maximum extent feasible.* Specify the coordination measures for water service interruption, such that cut-off periods are

reduced to the minimum possible.* Specify the method of construction in highly congested areas to minimize access disruption, such

as trench-to-truck construction and provision of plates to provide access over trenches. Properaccess to daily businesses will be guaranteed to the maximum extent practicable ways.

* Require the constructor to secure approval of construction staging and lay down areas.

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* Require the constructor to use traffic routing for implementation of construction works. Safe trafficand safety signals and lighting should be in accordance with local regulations. Safe detours andwalkways for pedestrians will be implemented as necessary.

Construction will be carried out by the contractors, who will be responsible for implementing thesemitigation measures. Relevant clauses will be included in the contracts between the Operator andcontractors.

6.2. Measures to minimize noise and vibration

During construction, noise can be minimized through scheduling and specific restrictions forparticularly noisy activities. To the extent possible, excavation and related works in residential areasshould not be undertaken from sundown to sunrise. Routine control on maintenance all equipment usedfor construction and transportation will be required to ensure reasonable noise levels. In built up areas,excessive vibration from heavy machines during construction will be avoided to the extent possible toreduce any damages to the surrounding areas. Manual excavation will be adopted in certain cases.Local construction standards will be followed if they specify more stringent requirements.

6.3. Protection of air environment from the construction dust and pollution

The contractors will employ dust suppression measures during the construction process andtransportation of materials, such as periodically sprinkling water in certain areas and removal of excessmaterials from the sites. All street surfaces, sidewalks, and construction sites will be cleaned uponcompletion of activities.

To reduce vehicle emissions the contractors will use traffic routing. Also it will be required to provideroutine control on maintenance all equipment used for construction and transportation of materials, andto use the equipment only when required.

6.4. Disposal of demolition and excavation debris

The current construction norms and regulations of Georgia require proper measures for the removal ofdemolition debris from the sites. This material will be removed from the site and will be disposed of atan approved location. Salvaged material will be stored at a designated location and protected fromerosion.

6.5. Disposal of water treatment silt and sludge

The existing Georgian construction standards require special measures for handling collection andburial of the water treatment sludge. Only approved locations will be used for these purposes. Sludgewill never be disposed of in permeable soils or in the proximity of surface waters or buildings.

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6.6. Avoidance of underground water pollution by the construction run-offs

The current construction nonns and regulations of Georgia require proper measures for protection ofgroundwater from construction run-offs. Construction sites will provide for adequate runoff anddrainage control. All vegetation destroyed will have to be replaced, and trench surfaces will have to berestored to a condition at least equal to that existing before work, to prevent increased erosion.Negative impacts to groundwater are expected to be temporary and minor in significance.

6.7. Prevention of chlorine releases and minimization of impacts

To prevent potentially serious threats to operators' health, chlorine systems shall operate under vacuumto prevent leakage, chlorinators shall be constructed of materials resistant to chlorine corrosive attack,and chlorine leak detectors shall be installed inside the chlorination facilities. Protective and emergencyresponse equipment will be required in chlorination facilities.

6.8. Prevention of accidents during construction

The contractors shall take all necessary precautions for the types of civil woks involved, specially inresidential areas and those with high circulation of persons and vehicles. All construction andrehabilitation works should be carried out with keeping the safety equipment rules, and health andsafety regulations. Safety measures will be adopted to protect the personnel involved in the works.Public access to construction sites will be properly restricted. Internationally accepted practices andactive regulations should be assisted regarding restoration of construction health and safety.

6.9. Control of fuels and oils

All aboveground storage tanks and drums will be stored on low permeability bases able to contain110% of the stored volume. Proper measures will be taken to prevent spillage during equipmentmaintenance activities. Pouring fuels or oils into soils or drains will be prohibited. Activeenvironmental requirements on the subject will be followed as to the treatment and disposal ofresidues.

6.10. Protection of vegetative cover

As a general principle, all vegetation destroyed will have to be replaced. Ornamental trees that need tobe cut will be properly replaced.

6.11. Supplementary measures

* All wood used during construction will be procured from authorized sources.* Solid waste (other than demolition and excavation debris) such as wood, paper, glass, plastic and

trash in general, will be properly collected, separated, stored, and disposed.* All construction sites will be kept clean and in good sanitary conditions.

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7. OTHER ENVIRONMENTAL ISSUES

Environmental concerns at a macro level (for instance, the question of Aragvi river and Mtkvari rivercontamination with sewage) have to be tackled at several levels, including legal, technical, andinstitutional levels, warranting greater and sustained financial inputs over a longer period of time.

Macro issues are also interlinked with improvements in the other sectors of the economy, like theenergy sector, without which it would be impossible to run a sewage treatment plant or pumpingstations. While innovative technologies that use less energy could partially solve the problem, they arelikely to require greater technical and financial resources.

Until these pre-conditions are satisfied, it would be impossible for GOG to meet its treaty obligationsin respect of pollution of the International Waterways such as the Mtkvari River. A comprehensiveproject to arrest pollution of the Mtkvari all along its course through Georgia is therefore urgentlyrequired.

8. IMPLEMENTATION AND MONITORING

The EMMP will be implemented by the International Operator. The provisions of the EMMP and theobligation to implement the Program will be incorporated in the lease contract to be signed betweenTbilisi Water Utility and the utility operator. The operator will be required to produce annualEnvironmental Management and Monitoring Plans.

Tbilisi Municipality and other relevant Governmental Authorities of Georgia will be responsible forenforcement of applicable local regulations. Supervision of compliance with the EMMP will beundertaken by the Engineer tasked, inter alia, with environmental functions in the ProjectImplementation Unit (PIU) as part of his/her technical supervisory duties. It is envisaged that the PIUwill hire Environmental Officer who will have overall responsibility to coordinate environmental issueswithin the Project. Training of the PIU staff on environmental aspects related to Water Supply andSanitation system is also recommended.

As per Georgian Environmental Assessment regulations, once the contractor identifies rehabilitationworks (reconstruction works, waste disposal and etc), they should be subject to separate approval byrelevant authorities within the Ministry of Environment and Nature Protection - see Appendix 1.

Similarly, water permits issued by the Ministry of the Environment Protection and Natural Resourcesto TWU will be subject to periodic revisions to account for the successful implementation of reductionof physical water losses.

All contracts for small construction works will include requirements for implementation of the specificmeasures as per EMMP provisions and good construction practices. Daily control and monitoring ofconstruction works will be part of responsibilities of the utility operator. The quality of drinking watersupply will be monitored according to international and local standards using new laboratory

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equipment to be financed by the TWSSP. Water quality and safety will be one of the key performanceparameters in the lease contract. Compliance with these performance standards by the Operator will beensured through inspections by the TWU and respective state authorities. The Terms of Reference ofAuditing firm who will be tasked with financial and technical auditing functions will includeexamining of EMMP implementation.

9. ENVIRONMENTAL MANAGEMENT AND MONITORING PLAN

The rationale for an Environment Management Plan arises from the fact that many of the adverseimpacts could be mitigated or eliminated by implementing appropriate measures during the pre-construction, construction, and operational phases of the project. A summary of the environmentalmanagement plan for mitigation of relevant impacts is presented in Table 3.

Further, Environmental impacts are dynamic in nature. Therefore they need to be monitored , andcorrective steps taken on time. The implementation of mitigation measures as outlined in the foregoingsection, and impacts of the project during construction and operation of phases should be monitored.The monitoring plan should provide for periodic revision, if necessary, during project implementationand with changing environmental conditions, and in order to provide a basis for the evaluation ofproject impacts, measured against baseline conditions.

A project monitoring committee consisting of representatives from Tbilisi Municipality, TWU,MENRP, Ministry of Health, Traffic Police, Highway authorities, etc. is suggested for day to daysupervision of the monitoring activities.

8. Cost of the Environmental Management and Monitoring Plan

All project investments are aimed directly or indirectly at improving the quality of water supplied andgeneral public health. Circa US$ 20 Million will be invested into rehabilitation of Water and SanitationSystem in Tbilisi within Tbilisi Water Supply and Sanitation Project. Investments will be made fromRepair and Rehabilitation Fund supplemented by IDA Credit sources, and Tbilisi Municipality Co-participation monies.

Financial costs associated with the implementation of the environmental mitigation and monitoringmeasures have been estimated as follows:

Measures during network rehabilitation works ina water supply and distribution systems US$ 15,000Measures during treatment plants rehabilitation works 10,000Salary of Environmental and Supervision Officer (48 months) 35,000General monitoring expenses (sampling, laboratory tests, logistic support) 25,000Operational Safety and Environmental Plan, including training 30,000Legal assistance (review of environmental regulation as part of thelegal review for the preparation of the management contract) 5.000

TOTAL US$ 120,000

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It may be noted that many of the mitigation measures require inter-agency coordination and do notentail any significant cost inputs. Many of these measures can also be carried out in tandem with theproject schedule and do not warrant separate time inputs. The cost of mitigation measures will be borneby works contractors, who will make the necessary provisions for mitigation as part of their contracts.These provisions involve good construction practices and will be included in the cost estimates andcontract prices for the construction works.

Costs associated with the PIU Engineer in charge of environment, general monitoring expenses, andlegal assistance, have been budgeted in the project as part of the Project Implementation Unit budget(PCU).

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Table 3. Environmental Management and Monitoring Plan

Component and Potential Negative Mitigation Opportunities Responsible Party for Monitoring Requirements Responsible Agency forActivity Impact or Concern Implementing Monitoring and

Mitigation Enforcement (in orderof involvement)

A. Construction Environmental

Rehabilitation of Soil and water Use only approved, appropriate Utility operator, Small Periodic inspection of plant TWU/Projectwater production contamination by water disposal sites; follow construction works contractors rehabilitation activities Implementation Unit (PIU);facilities and treatment sludge standards. Municipal Dept. for thedistribution Environment; Ministry ofnetwork Environment and Natural

Resources Protection(MOENRP);

Groundwater pollution Provide adequate runoff and drainage Utility operator; Small Periodic inspection of TWU/PRU; Administration ofby construction run-offs control; replace all vegetation destroyed works contractors construction activities Geology;

and restore all trench surfaces; followactive construction norms andregulations

Soil and water Use only approved, appropriate Utility operator; Small Periodic inspection of TWU,PIU; Municipal Dept.contamination by disposal sites; remove debris directly works contractors construction activities for the Environment;improper disposal of and promptly; properly store and MOENRPdemolition debris and protect salvaged material; collect,waste separate and properly dispose waste;

follow construction standards.

Spillage of fuel and oil Store tanks and drums on 1 10% Utility operator; Small Periodic inspection of TWU/PIU; Municipal Dept.capacity bases; forbid pouring into soils works contractors construction activities for the Environment;or drains; enforce adequate equipment MOENRPmaintenance procedures; follow localregulations.

Damage to trees and Replace all vegetation destroyed; use Utility operator; Small Periodic inspection of TWU/PIU; Municipal Dept.vegetative cover authorized wood sources only. works contractors construction activities; for the Environment

monitoring of wood sources

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Component and Impact or Concern Mitigation Opportunities Responsible Party for Monitoring Responsible Agency forActivity Implementing Mitigation Requirements Monitoring and

.____________________________ _________________________ E nforcem ent

Socio-EconomicRehabilitation of Noise and vibration Establish schedule and other Utility operator; Small works Periodic inspection of TWU/PIU; Municipal Dept.water production disturbances to residents and specific restrictions; limit work to contractors construction activities for the Environment:facilities and businesses daylight hours as possible; municipal agency fordistribution network equipment to have noise construction supervision

suppression devices and propermaintenance; limit excessivevibration in built-up areas; followlocal standards.

Dust generation Dust suppression measures: water Utility operator; Small works Periodic inspection of TWU/PIU; Municipal Dept.sprinkling, removal of excess contractors construction activities for the Environment;materials, cleaning of sites upon municipal agency forcompletion of activities. construction supervision

Reduced pedestrian and Establish work sequence and Utility operator; Small works Periodic inspection of TWU/PIU; municipal agencyvehicle access to residences methods (trench-to-truck, steel contractors, Traffic police construction activities for construction supervisionand businesses plates) to minimize access

disruption; provide altemativesafe access as possible;implement detours and walkways.

Temporary water supply Establish coordination procedures Utility operator Monitor coordination of TWU/PIU; State Sanitaryinterruptions for cut-offs; minimize time for cut-offs Inspection

replacement operations; usenighttime scheduling asnecessary.

Increased traffic Use traffic routing; ensure Utility operator; Traffic Periodic inspection; monitor TWU/PIU; Municipal Dept.inconvenience (emissions, coordination with local Police; Small works coordination of traffic for the Environment; trafficcongestions, longer travel authorities; routine control and contractors routing policetimes) maintenance of equipment.

B. Operation Environmental

Operation of Soil and water contamination Use only approved, appropriaie Utility operator Periodic inspection TWU/PIU; Municipal Dept.rehabilitated water by water treatment sludge disposal sites; authorization by for the Environment;production facilities MoENRP, follow Georgian MoENRP

standards.

Implementation of Contamination by runoffs, Same basic construction measures Utility operator Periodic inspection TWU/PIU; Municipal Dept.leak detection and demolition debris, waste, and norms as during construction for the Environment; Sanitaryreduction programs fuel and oil spills; and phase. Epidemiology Station

damage to vegetative cover.

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Socio-EconomicOperation of Safety hazards from Specify vacuum-operated Utility operator Periodic inspection TWU/PIU; Municipal Dept.rehabilitated water chlorination process corrosion-resistant systems; for the Environment; Stateproduction facilities install chlorine leak detectors; Sanitary Inspection

require protection and emergencyresponse equipment for operators.

Implementation of Noise, vibration, dust, Same basic construction measures Utility operator; Small works Periodic inspection TWU/PIU; Municipal Dept.leak detection and reduced access, traffic and norms as during construction contractors for the Environment; trafficreduction programs inconvenience, water supply phase. police; State Sanitary

interruptions, and safety Inspection; municipal agencyhazards to workers, for construction supervisionpedestrian and vehiclcs

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10. CULTURAL ISSUES

It has been demonstrated time and again that water supply and sanitation projects cannot besustained if they are divorced from the cultural realities and habits of the people.

The historical reasons for the high rate of water supply in Tbilisi have already been discussed.There is also a cultural dimension in that water had always been supplied by the government free ofcharge along with the other essentials of life. The country's enornous water resource potential onlysuppressed the hidden cost of processed water, which has escalated over the years.

With the disintegration of the Soviet Union, Georgia's economy collapsed and is only slowlyshowing signs of recovery. Some people are not able to come to terms with the transition to themarket economy which the country has embraced, and they still feel that water should be suppliedfree to them, no matter at what cost to the country as a whole.

There is also this cultural preference for drinking running water, as against stagnant water comingout on opening a tap. As a result, the community water fountains in Tbilisi are never equipped witha tap, and are allowed to flow continuously, resulting in the waste of water as well as energy.

These are great mindsets which need to be overcome through a process of education and persuasionif the investments in water supply are to be made sustainable.

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Appendix 1

DETAILED PROCEDURES FOR ISSUE OF ENVIRONMENTAL PERMITS FORCATEGORY 11 PROJECT

1. After the receipt of a detailed application for the environmental protection permission ofa Category II activity the Ministry of Enviromnent of Georgia shall be obligated to carryout procedures provided for by the law, which cover the expertise of the activity andpublic participation in the decision-making process on the issue of the permission.

2. In 10 days following the receipt of the application for public information, the Ministry ofEnvironment of Georgia shall be obligated to provide the publishing of application and abrief annotation of the planned activity to which the information on the date and venueof public discussion of the issues related to implementation of the activity should beenclosed; In view of the above, the Ministry of Environment of Georgia shall:

* ensure the publishing of the inforrnation in press;* receive and discuss public comments in writing within 45 days following the publishing

of the information.

3. The copy of the application shall be kept in the body of the Ministry of Environment ofGeorgia where the review of the evidential documentation on the activity is planned andthe public representatives shall be able to familiarize themselves with the application(with the exception of the part containing commercial, industrial and state secrets)within the entire period of application review.

4. In order to ensure public participation in the process of the issue of the environmentalprotection permission for the activity, the Ministry of Environment of Georgia shall beobligated to carry out a public discussion within 2 months at maximum after the receiptof the application, with the participation of the investor, the Ministry of Environment ofGeorgia, local administration bodies and public representatives;

5. Maximal term for the review of the evidential documentation of the activity followingthe receipt of the application at the Ministry of Environment of Georgia shall be 2months. During this period the Ministry of Environment of Georgia shall be obligatedto:

* carry out the state ecological expertise of the evidential documentation;* determine the compliance of the activity or its separate part with the legislation of

Georgia in force* determine the compliance of the activity or its separate part with the standards in

effect of the condition of the environment in Georgia;* determine the measures the elaboration of which shall be necessary for the reduction

of the impact on the environment in case the activity is implemented;* adopt a decision on the issue of the environmental permission for the activity taking

into account the environmental impact assessment conclusion and public opinion.

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