E832March 2004

ARMENIAMunicipal Water and Wastewater Project

Environmental Management Plan Framework

I. INTRODUCTION

This document presents the Environmental Management Plan Framework (EMPF) which has beenprepared to ensure that the proposed Armenia Municipal Water and Wastewater Project (MWWP) isimplemented in accordance with the World Bank operational guidelines. The EMPF includesprocedures and implementation arrangements for ensuring full consideration of environmentalsafeguards in the annual investment program, in accordance with OP 4.01 as well as Armenian lawsand regulations on environmental protection and environmental impact assessment. The mainpurpose of this EMPF is to serve as a valuable tool for identifying key environmental and socialimpacts that could result from the project, proposing mitigation measures to address the mostsignificant negative impacts, and outlining the monitoring programs and institutional responsibilitiesfor implementation.

For the purpose of the World Bank Operational Policy (OP) 4.01, the project has been rated as anenvironmental category Fl (Financial Intermediary) given the fact that the exact investment itemswill not be known at the time of project appraisal.

Although no major environmental issues are anticipated, since most of investments will concentrateon rehabilitation of existing infrastructure, certain investments items to be funded under the projectmay require special mitigation measures to protect the environment and enhance health safety. Anysubproject determined to be under environmental category A would be ineligible for financing underthe project, and investments will fall under the environmental category B or C.

The budget for implementing the EMPF has been included in the project cost.

II. BACKGROUND AND PROJECT DESCRIPTION

Water supply. There are 38 towns and 268 rural populated areas within the service area of theArmenia Water and Sanitation Company (AWSC). Water supply to these populated areas isimplemented by means of about 100 systems and 730 water intake structures of these systems,through 2,500 km of water main pipelines, 3,600 km of inside-community water and seweragenetworks, pumping stations, chlorinating stations, wastewater treatment plants (WTPs) and otherstructures (according to the Report on Water Metering Project Preparation, AWWP, 2002). Theanalysis of data presented in Part I Armenia Water Supply Project Report in the framework of theArmnenia - Municipal Water and Wastewater Project shows that inappropriate technical equipmentof the networks reduces to almost 55% the general amount of drinking water intake reaching theusers and to 76% - the supplied water volume. Water is supplied to consumers according toschedules of daily supply in the range from 1 to 15 hours. Apart from failing to meet consumers'needs, losses have negative impact on the environment and causes swamping, erosion of cultivatedlands, activates land sliding, etc.

Wastewater. Domestic and industrial wastewaters from all cities of the Armenia are disposedthrough wastewater networks and collectors. The existing networks collect sewage water from 60-80% of urban areas, while rural areas mainly do not have wastewater systems and sewage water is

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entirely discharged into the RA river net. Within the areas included in this project there are 13WWTP in the AWSC service area, through which only 45-50% of the disposed sewage water isundergoing only mechanical treatment. As some structures providing for technological processes atthe WWTPs are no longer operated for various reasons, normal procedure of sewage water treatmentthey have to provide is disrupted. About 63% of the total length of wastewater collectors and netpipe works were built more than 20 years ago, and today they need to be repaired or are inemergency situation.

Sanitary and hygienic condition of water supply to the population of the Republic of Armeniain 1992-2001. During the last 10 years, inappropriate sanitary and technical condition of the waterand wastewater systems in Armenia has created difficult sanitary and epidemiological situation. Theresult is that the quality of drinking water provided to the population of the Republic is notcomplying with the state standards due to deficiencies of sanitary conditions at water supplyheadworks and within some of inner networks and the threat of outbursts of water-borne acuteinfectious intestinal diseases is constant. The number of water samples failing to meet the statestandards by microbiological indicators increased correspondingly, comprising 11.5% in 1993,13.4% in 1996, and 16.9% in 2001. The rural water and wastewater systems are in the worst sanitaryand technical condition. By the data of 2001, 64% of them were not meeting the standards, and 20%of water samples failed to meet microbiological parameters .

Within the above context, the World Bank is preparing a US$20 million loan with the objective tohelp improve water and sanitation services in Armenia so that adequate services can be provided toall customers, and the sector can contribute to the economic development of the country in anenvironmentally sound way. The project aims to achieve this objective by assisting the ArmeniaGovernment in testing and developing important aspects of the water sector reform process.

The project will include the following components:

Private Sector Participation (PSP) Component. It will promote the involvement of private sector(Operator) with international experience into the water and wastewater services in Armenia.According to the law on local self-government, communities in Armenia are responsible fordrinking water and wastewater services within their administrative boundaries. However 44 of the48 urban or semi-urban communities and more than 300 of the 950 villages transfer operationalmanagement to three public operators - YWSC for Yerevan and surrounding communities(population served - about 1 million), "Nor Akunq" company for 2 cities and 12 villages located inArmavir Marz, and AWSC elsewhere. AWSC serves 43 cities and 290 villages (with a servedpopulation of about 1.4 million). Four cities and about 600 villages, totaling about 600,000inhabitants, directly operate their services. AWSC supplies bulk water to about 100 of these villages.The MWWP will involve private operator in Armenia's water sector in order to provide servicescurrently under the AWSC responsibility. The PSP component will finance costs associated withinvolvement of the private sector (such as a management contract fixed fee and incentive bonus).

Investment Fund Component. Most of the project funds will be allocated to Investment Fund thatwill finance priority investments in AWSC branches as well as technical, economic andmanagement support, water meter installation, customer awareness campaigns, training, etc.Investments to be financed will be identified and procured by the private operator, according to WBguidelines.

I Source: Report of the Sanitary and Hygienic Agency of the RA Ministry of Health.

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Technical Assistance Component. The project will include a component to fund projectimplementation and related consultancy and training, including financial audits and audit ofoperator's technical performance.

III. LEGAL AND INSTITUTIONAL SETTINGS

A. Legal Setting

A number of relevant laws regulate water use and protect the environment:* Law on the Principles of Nature Protection (1991);* Water Code (2002);* Law on Environmental Impact Assessment (1995);* Law on Ensuring Sanitary-epidemiological Security of the RA Population (1992)* Law on Specially Protected Nature Areas (1991);* Law on the Protection and Use of Fixed Cultural and Historic Monuments and Historic

Environment (1998).

Law on the Principles of Environmental Protection (1991)

The Law on the Principles of Environmental Protection (1991) outlines the environmental protectionpolicy of Armenia. Its purpose is to ensure state regulation of environmental protection and usewithin the territory of Armenia. It provides a legal basis for the development of environmentallegislation regulating the protection and use of entrails, forest, water, flora and fauna, and theatmosphere.

Water Code (2002)

The main purpose of this Code is the conservation of the national water reserve, the satisfaction ofwater needs of citizens and economy through effective management of useable water resources,securing ecological sustainability of the environment, as well as the provision of a legal basis.

Adoption of the new Water Code generated the need for further modifications in the legislation. Inthe meantime, in view of ensured legitimacy of those modifications, the Code necessitated formationof an entire package of legislation cutting through diverse planes. As a consequence, about 7 draftlaws have now to be developed by the Government's initiative and submitted to the NationalAssembly, including draft Law on Drinking Water, which should be drafted and approved withintwo years. The Government of Armenia is drafting a number of procedures and regulations amongwhich Procedure of Implementation and Reporting on Water Resources Monitoring, StandardsLimiting Environmental Impact on Water Resources, Standards of Minimum Drinking Water SupplyRates for Population, and other normative documents will provide guidelines directly linked withwater and wastewater environmental issues.

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Law on Environmental Impact Assessment (1995)

The Law on Environmental Impact Assessment (EIA), adopted in 1995, contains the standard stepsof the EIA process for various projects and activities in Armenia. The Law on EIA is generallyconsistent with the EIA approaches followed by international conventions and developmentassistance agencies (e.g., World Bank, USAID, and EU).

Law on Ensuring Sanitary-Epidemiological Security of the RA population

The Law on Ensuring Sanitary-Epidemiological Security of the Republic of Armenia Populationadopted in 1992 sets legal, economic and institutional bases for ensured sanitary andepidemiological safety of the population, as well as other guaranties provided for by the state toexclude influence of adverse and hazardous factors on human organism and ensure favorableconditions for vital capacity of the present and future generations.

Law on Specially Protected Nature Areas (1991)

The Law defines four categories of protected areas in Armenia:* State Reserves;* State Reservations;* National Parks; and* Nature Monuments.

Law on the Protection and Use of Fixed Cultural and Historic Monuments and Environment(1998)

The Law on the Protection and Use of Fixed Cultural and Historic Monuments and HistoricEnvironment, adopted by the National Assembly on November 11, 1998, provides the legal andpolicy basis for the protection and use of such monuments in Armenia and regulates the relationsamong protection and use activities. Article 15 of the Law describes procedures for, among otherthings, the discovery and state registration of monuments, the assessment of protection zones aroundthem, and the creation of historic-cultural reserves. Article 22 requires the approval of theauthorized body (Department of Historic and Cultural Monuments Preservation) before land can beallocated for construction, agricultural and other types of activities in areas containing monuments.

Water Quality Standards (2002)

Armenia has adopted various quality standards from the former Soviet Union, including thefollowings:

* Drinking Water Quality Standards (GOST No. 2472-82 and 29183-93). This norm pertains tomicrobiological, chemical, and physical contaminants in drinking water, measured at theconsumer's tap.

* Sanitary Rules and Norms on Protection of Surface Water from Pollution (SanPiN #4630-88).The Norms set water quality norms for water units with purpose of drinking and domestic watersupply; water protection requirements in case of different household activities; sanitaryrequirements for conditions of wastewater discharge to the surface water unit, etc.

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International Conventions

In addition, Armenia has signed or ratified several other international environmental conventions,including:* Convention on Environmental Impact Assessment in the Trans-Boundary Context (Espo, 1991);* Dublin Convention on Water and Sustainable Development (1992);* Convention on the Protection of World Cultural and Natural Heritage (1993);* Convention on Access to Information, Public Participation in Decision-making and Access to

Justice in Environmental Matters (Aarhus, Denmark. 1998);

B. Institutional Setting

In Armenia, the State Committee of Water Management (SCWM) is the primary agency in charge ofwater management, whereas the Ministry of Nature Protection (MNP) has overall responsibility forwater resources and environmental protection and management, including hazardous wastemanagement. Water Resources Management Agency under the MNP is responsible for theallocation and use permitting of water resources in Armenia. In addition, the Ministry of Healthplays the lead role in controlling the spread of malaria and other water-borne diseases. Local andregional authorities assume responsibility for natural resource use and protection within theirjurisdiction.

State Committee of Water Management

In order to rehabilitate financially companies engaged in water economy, to improve their servicesto consumers, to improve the tariff policy and to implement economic reforms in this sphere, theGovernment decided to establish a State Committee of Water Management under the Government(RA Government Decision #95, dated 9 February, 2001).

Under the structure of SCWM, AWSC is responsible for operation and maintenance of the watersupply and sewerage system under its service area.

The State Committee of Water Management performs the following functions:* participates in the policy development related to Water National Plan and water resources

protection and use;* submits to the Government annual reports on water utilization by a breakdown of sources and

user companies;* executes authorized management of state stocks in companies engaged in commercial activities

like building of hydro-technical constructions, technical operation, water supply and sewerageservices in the area of irrigation, drinking water, sewerage as well as in state entities whichimplement investment projects in natural and artificial water basins in the mentioned areas at theexpense of foreign funding;

Ministry of Nature Protection

The Ministry of Nature Protection is responsible for the protection, sustainable use, and regenerationof natural resources as well as the improvement of the environment in the Republic of Armenia. Inthose areas, the MNP's authority includes overseeing national policy development, developingenvironmental standards and guidelines, and enforcement. The MNP discharges those functionsthrough the following departments:

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* department of water resources protection;* department of nature protection and nature resources use economy;* department of biodiversity and land protection;* department of hazardous substances and waste management;* department of entrails and mineral resources protection;* department of atmosphere protection;

legal department;* department of international cooperation.

Water Resources Management Agency under MNP is the key institution responsible for the waterresources management: development of National Water Policy and National Water Plan;classification of water resources by their purpose usage; participation in water standardsdevelopment and supervise their application, issue water use permits, etc.

The MNP also undertakes several functions through its structural subdivisions:* State Department of Hydrometeorology (operates 97 active hydrological stations);* State Committee of Mineral Resources Reserves;* Geological Department, SI;* State Environmental Inspectorate (SEI) and 11 Regional Environmental Inspectorates: oversee

the implementation of legislative and regulatory standards in natural resources protection, use andregeneration;

* Environmental Monitoring Centre (collects water quality data from 131 sampling points);* "Armforest" SCJSC: forest management (23 forest enterprises) and Specially-Protected Nature

Areas (14 state reservations);* Departments of Environmental Assessment: conduct environmental assessments SCJSC.

Ministry of Health

State Hygienic and Anti-epidemic Survey of the Ministry of Health of RA responsible forthe following:* participating in sanitary norms and drinking water quality standards development;* coordination of all issues related to health;* supervise implementation of sanitary norms, hygenic and antiepidemiological measures

implementation by organizations and citizens.

National Board on Water is the top consulting agency, the staff of which comprises representativesof several ministries. Main actions of the Board lead to the development of recommendations on theNational Water Policy and Program. Dispute Settlement Commission is established under thisBoard, which is authorized to settle disputes related to water use permits within the scope of waterrelations.

Regulatory Commission is responsible for establishment of tariff policy in water relations andissuing of permits for the use of water systems.

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IV. DESCRIPTION OF BASELINE CONDITIONS OF W&W SYSTEMS2

A. Production SystemsProduction systems comprise the whole set of infrastructure since the river intake, source captage ordraining gallery, well or borehole, up to the entry of the distribution reservoirs not included. It soincludes the pumping stations, in very some few cases drinking water treatment plants, thechlorination facilities and, the most important and costly of all, the feeders and water mains fromsource to the distribution reservoirs.

In general there are abundant, good quality and safe resources of water all over the MWWP serviceareas. The only problems can come from some very punctual and seasonal droughts and frompunctual contamination due to human or organizational neglect from Communities, inhabitants,farmers, but also ArmWSC branches and autonomous companies.

Some institutional problems can be mentioned at this level:- Although there are not the majority, there are still some problems of responsibility sharing:

captages are not always managed by the branch in charge of the distribution of water. Forexample, Charentsavan is fed by the Makravan captage which is managed by the Abovianbranch, Goris is fed by the Mukhuturyan sources managed by the Sisian branch, the Araratbranch is fed by the Garmi source managed by the Artashat branch. So the branch responsible forwater quality in front of consumers has no hold on the treatment or chlorination functions thatdefine this quality. So the "from source to tap" principle is not always completely respected.

- the Sanitary Protection Zone generally do not exist, and in many sites, the presence of domesticanimals, cattle and sheep breeding is obvious. The minimal hygienic practices require the tightrespect of those sanitary protection zones.

CaptagesCaptages are in general in rather bad condition, because of a lack of maintenance and repairs. Manyof these installations suffered from the earthquake of 1988. Several captages present significantleakage (Makravan captage in the Abovian branch, Getavan captage, in the Stepanavan branch, forexample).

There has been no later follow-up and the current flows entering production system and feeders arenot known, especially when there are leakages.

Moreover, there is no monitoring of the quality of the abstracted water, in particular of itsbacteriological quality, downstream in order to set priorities for chlorination to systems with thehighest risks. This kind of monitoring is important, in particular when the quality of water hasseasonal variations.

River intakesThe situation of the river intakes is worse than that of captages insofar as they are subject to theclimatic risks and to hazardous human contamination, in addition to the same problems as captages.

2 The main source of information is ICEA Report on <<Private Sector Participation in the RA Residential Areas Drinking WaterSupply and Waste Water Sector» (December 2002)

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Water treatment plantsWater resources only require a treatment for solid particles settling and, in a minority of cases,filtering. Of the more than 9 treatment plants within the project area, we will take a sample of threefor a short description of their situation in 2004:

In general, the drinking water treatment plants are not properly operating. There is no more injectionof coagulants since a long time. The filters cannot be washed as the air compressors do not operateany more. So the sand is not changed, is very dirty and, with all the equipment, may be more ahealth hazard than a health protection for the consumers. In many cases, water just go through theequipment without any effective treatment. As this transit through the plant may worsen the qualityof water, a total by-pass may be better in some cases.

Pumping StationsAs other facilities and equipment, pumping stations are generally in bad condition, as poor repairshave been carried out since 1990 due to the lack of spare parts and the interruption of commercialrelations with manufacturers from other former Soviet Union countries. Frequently only one or twopumps have been working during the last years, the other ones being progressively cannibalized andused as a source of spare parts. As an average, it seems that less than one of two pumps (or 50% ofthe pumping capacity) is presently operational in very acrobatic conditions.

Water Mains (Feeders)The overall length of the water main listed in the technical questionnaires leads to an estimate lengthof 2,500 km for the total NIWWP areas. Those water mains are mainly steel made and have anaverage age of about 25 years. So the average feeder length per branch is close to 70 kilometers, alength generally observed for a population of more than 200,000 inhabitants in Western Europe andnot 20,000 inhabitants as in RA. The frequent construction of abusively long feeder lines is one ofthe key characteristic of the RA water systems.

The flow conditions within those feeders are not controlled nor well known: nothing makes itpossible to know if the flow is under pressure or on free face (or maybe alternatively one and theother). This practice of free flow is due to the over-dimensioning and poor engineering of somefeeder lines. It increases the risks of pollution by bacterial development, as well as the risks ofcorrosion..

Chlorination stationsDisinfections are most generally carried out with chlorine gas produced in RA chemical plants. Theequipment is installed in an independent buildings or in isolated part of the principal building. 95chlorination are currently in operation and 13 are out of service.

The installations are in general in very bad condition: the equipment of Soviet origin (Lonii-100model) is generally of old technology and, above all, not maintained, by lack of spare parts andconsumables. There is, at first sight, no possible revamping of the installations, taking into accounttheir present shape, and most frequently no possibility of repair.

If there is in general no shortage of gaseous chlorine in RA, as the supply on the sites is very scarce,and although we could not get any serious physical accounting of the amount of chlorine injected ateach systems level, those amounts seem in any case quite insufficient.

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Even if, in most cases water sources are not polluted, chlorination is necessary taking into accountthe very long distance that generally separates the captage from the distribution networks. It wouldbe even desirable to re-chlorinate at the distribution reservoirs level and, in some cases, at somedistribution points, taking into account the risks of contamination by sewer leakage close todistribution pipes with negative pressures.

B. Distribution Systems

Storage ReservoirsThe total capacity of the reservoirs is about 270,000 m3 , which represents about 385 l/i/d. In someservice areas, such as Goris or Meghri, not only the storage capacity is insufficient, so requiringexpansion, but it is also concentrated in only one location, not allowing for the necessarysectorization of the networks.

The distribution reservoirs are mostly underground, and made of pre-cast concrete. They can berehabilitated and, when necessary, expanded. The distribution reservoir of Dilijan town has beendamaged by mudflows, which led to water losses and further to landslide activation. Land slidinghas damaged water and wastewater pipelines that in turn contribute negative environmental impacts.

Generally they are not sufficiently nor regularly disinfected and sterilized. Their access should becarefully protected against outsiders intrusion, but this does not seem to be the case.

Distribution networksThe development of the distribution networks in RA was mainly concentrated during the years1950-1970.

The material used is mainly steel, without any cathodic protection, nor internal or external lining.Under these conditions the lifespan of a steel pipeline may be quite short when the ground iscorrosive. The examination of the components changed for reasons of major outburst or leakage inthe streets however clearly demonstrates that the distribution pipes are the most important anddifficult problem among the numerous ones faced at branch levels.

In several cities, there are two distinct networks: for example, in Artashat, where a drinking watersupply network is fed by spring water; and a non-drinking water network is fed by artesian wells, orin Abovian, where coexist a distribution network for drinking water and an irrigation network, inGoris, Sisian, etc.

The networks are not sectorized, even when various districts are at very different elevations. Thereis so excessive pressure conducive to leakage and pipe burst in the lowest parts of some networks.The non permanence of the distribution worsens the effects of corrosion and the risks of pollution bynon tight proof, burst or blocked sewers.

C. Wastewater Collection and Treatment

Sewerage networksThe total length of the sewerage networks installed in the MWWP service areas is estimated at atotal of about 1,800 kilometers, 33% of the drinking water networks total length. Those seweragenetworks are in general in very bad condition but, as for drinking water distribution pipes, there areno reliable data characterizing this situation more concretely. Nevertheless, taking into account the

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aggressive character of transported water, one can fear a situation even more serious than for thedrinking water distribution networks.

Only 50 service areas have a sewerage network and the remaining 250+ service areas remainwithout such an infrastructure. With some few exceptions those are small villages.

60% of the volume of water billed pay the wastewater fee meaning that they enter the seweragenetwork. It can be considered that a little more than 50% of the population is connected, with amuch higher percentage for professional subscribers. In many centers equipped with seweragenetworks, the wastewater collectors of some districts have not sufficiently taken into account theongoing urbanization. So the collectors are today under-sized and completely saturated today. So theoverflows of the wastewater they cannot transport may be a serious health hazard leading to thecontamination of the drinking water network.

Wastewater Treatment PlantsThe 13 wastewater treatment plants are mostly out of service. At first sight any revamping or repairseem difficult to consider taking into account the state of the works. The same problems as for thedrinking water treatment plants may be observed in worse. So those plants are by-passed and thesewerage is discharged without any treatment to the natural environment.

However, the closing of the majority of industries led to a strong decrease of industrial pollution.

D. Purification and Health Problems

Operation and Monitoring of Chlorination StationsChlorination is in the majority of the cases carried out at captage level, whatever the distance whichseparates this one from the distribution zone that may be very long (more than 40 km is frequent).There is no example in the installations visited of re-chlorination stations at the level of thedistribution reservoirs, or even within the distribution networks in the largest service areas.

Lack of operational proceduresIt does not seem that the concept of residual chlorine necessary to have a sufficient impact at thefarthest locations of the distribution networks is understood by the operating staff. Thus, the onlyquantified data refer to the initial amount injected at the level of the chlorination station, and neverto the residual amount at various levels of the distribution networks.

The accuracy of the chlorine amounts injected is never questioned, in order to take into account, inparticular, the variability of the water quality or a an accidental pollution. It does not seem that thereare rigorous procedures for purification: the chlorine amounts, when they are known and applied, arenot adapted to the quality of the water put in distribution (seasonal variations, in particular at thetime of snow melt, in dry periods, after storm rains, accidental pollution, etc.). In general, and due tothe scarcity and costs of supplies, the chlorine concentration seems quite low considering thespecific conditions.

Insufficient quality control of distributed waterBacteriological controls carried out within AWSC cannot be reliable by lack of accurate techniquesand consumables. The operational methods seem applied scrupulously, but without adaptation andquestioning to the unexpected events and accidents. In parallel of medical controls of the Ministry ofHealth, the branches carry out controls of the chlorine contents and bacteriological analyses. The

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analyses are made in the branch laboratory or in the laboratory of the State Hygienic and Anti-epidemic Survey of RA, at the expenses of the branch in this case.

In general, the equipment of the branch laboratories is in bad condition. The reagents, glassmakingand equipment for analyses are very scarce. The laboratory assistants are not sufficiently trained.The practical laboratory control on water quality in water production facilities and internal networksis in most cases extremely insufficient and completely lacking in the rural networks.

Some employees seem too easily confident in the "purification" and the controls carried out, withoutbeing aware of the dangers inherent to the general conditions of the installations and of the risksincurred. In the event of no-conform results demonstrating a microbiological pollution, theprocedures seem applied step by step, without any clear action plan making it possible to performadditional measures and take necessary steps to avoid a possible epidemic. All seems to rest on thecommitment of the staff that makes all his possible with quite insufficient means.

Significant and numerous risks of pollutionThe quality of water is, in general, of good sanitary quality, in particular for spring water.Nevertheless, the medical risks of pollution are significant and water can be spoiled:

* at the time of storm rains and of spring snow melting;* at the captage level itself, as protection perimeters whether do not exist or are not respected,

with cattle breeding or human activities that can pollute the resource;* at the feeders level due to illegal connections and leakages;* at the distribution reservoirs level through intrusion of animals or insects which can penetrate

and involve significant risks of pollution (deaths of the animals, excrements....);* at the distribution networks level by drainage of wastewater overflow from sewers, when the

drinking water pipes are under negative pressure;* at the level of illegal or informal connections feeding polluted customers tanks that can feed

back the network;* at the level of internal customers' storage.

V. ADDRESSING ENVIRONMENTAL ISSUES

The project is expected to finance rehabilitation of the existing W&W systems and expenditures toimprove management and operations of water supply/wastewater companies, which shouldcontribute to improve the quality of life and the environment. Specific physical investments will bedefined only during the course of the project by the private operator. Although no additionalstructures of significant size are envisaged under the project, some reconstructions can entail theinstallation of new facilities. It is not expected that the project will require land acquisition or resultin involuntary resettlement, since most of the work will be done in properties owned bywater/wastewater companies, municipal land or rights-of-way assigned to municipal infrastructure.Nevertheless, in case any land acquisition or compensation issues arise, these will be addressed in amanner consistent with WB policy and relevant national legislation.

The EMPF provides water/wastewater companies with an overall framework to guide thepreparation and implementation of their annual work program, as well as reflects the environmentalguidelines and standards existing in RA. As noted in Section III above, detailed legislation forEnvironmental Impact Assessment has been enacted in RA in 1995.

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The EMPF describes procedures for deciding on whether environmental assessment categories A, Bor C are appropriate for each sub-project. Any subproject determined to be under Category A wouldbe ineligible for financing under the project. Only environmental categories B and C sub-projectsare expected. Therefore the EMPF only develops procedures for categories B and C. Proceduresand requirements to be followed for each category include requirements for public information anddisclosure, and set implementation arrangements for ensuring full consideration of environmentalconcerns in accordance with relevant national legislation and WB OP 4.01.

VI. GENERIC POTENTIAL ENVIRONMENTAL IMPACTS AND MITIGATIONMEASURES

The potential environmental impacts will vary with the subprojects depending on the project specificfeatures. In general, the environmental issues that may need to be addressed during different stagesof subprojects development will be related but not limited to:

Potential Positive Impacts:. Improvement of the public health: The project will increase water availability and improve

the physiological and microbiological quality of water supplied to consumers, which should leadto a reduction of the water-borne diseases and a general improvement in public health.

* Improvement of the public socio-economic situation: The project will improve socio -economic situation of population of 306 inhabited settlements.

. Repair and improved operation of water supply system will ensure water savings, higherquality of drinking water thus reducing pollution threat: A possible reduction in the amountof raw water used could potentially improve the sustainability of water resource use, as well asleak correction and control will prevent water contamination and activation of land sliding anderosion processes.

* Rehabilitation of pumping stations and conversion to gravity water supply will allowreducing amount of produced energy.

* Repair and improvement of wastewater collection will reduce risk of sewerage blockage andallow to discharge treated wastewater of higher quality to nature environment.

Potential Negative Impacts* Impacts from improper disposal of excavated materials and construction waste;

* Possibility for chance finds during construction, although at present no impacts on cultural andhistorical assets are expected;

* Degradation of landscapes and soil erosion;

* Loss of fertile top soil due to temporary access roads and work areas;

* Pollution of water and soil by fuel and oil products;

* Pollution of water sources by domestic animal;

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* Increased number of accidents related to heavier traffic;

* Noise and vibration disturbances;

* Landslides and landslips resulting from construction works;

* Temporary interruption of water supply;

* Temporary air pollution (dust) related to the transportation of construction materials and trucktraffic;

* Safety hazards from chlorination processes;

* Soil and water contamination by water treatment sludge (well, spring, catchments);

* Pollution of water and soil by disposal of residual solid products from mechanical and biologicaltreatment of wastewater;

* Disturbance to rivers water quality by discharged wastewater;

* Soil and groundwater contamination by extraction run-off;

* Impacts on flora/fauna.

Mitigation Measures

Standard mitigation measures will be applied.

VII. ENVIRONMENTALLY SOUND CLAUSES FOR CIVIL WORKS CONTRACTS

Most construction phase impacts will be possible to mitigate by including appropriate clauses intothe civil works contracts. Revisions of clauses should cover, but not limited to, the following issues:

* compliance with general national environmental guidelines;* protection of Natural Habitats and Specially-protected areas;* protection of Historic-cultural monuments;* adequate disposal of construction and excavation wastes;* location of construction camps, etc.

VIII. OPERATIONAL PROCEDURES FOR ENVIRONMENTAL ASSESSMENT

In accordance with the legal fundamentals mentioned above, environmental quality norms areestablished with the purpose to define standards limiting permissible environmental impact, whichare supported scientifically and ensure population health and general safety of the environment. Thesystem of normative, technical, and normative-metrological provisions on environmental protectionshall include:* maximum permissible contents of hazardous substances polluting air, water and interior;* permissible limit values for the discharge of hazardous substances;

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* quantities for application of chemical substances that have negative impact on the environment;* permissible environmental load;* size of sanitary protection zones, and other indicators.* enterprises causing adverse environmental impacts and other facilities, etc.

Environmental screenin'An Environmental screening will be undertaken to determine importance and category of EA(environmental assessment). The above documents of the Armenian legislation regulating theenvironmental field do not establish any environmental classification of projects by categoriesaccording to the importance and rate of their potential environmental impacts. The proposed annualsub-projects will be classified by EA categories as specified in the WB OP 4.01, described below.

1. Category "A" projects are considered those that are likely to have significant adverseenvironmental impacts that are "sensitive," "diverse" and "unprecedented." These impacts mayaffect an area broader than the project implementation area. EA for a Category A projectexamines the project's potential negative and positive environmental impacts, compares themwith those of feasible alternatives (including the "without project" situation), and recommendsany measures needed to prevent, minimize, mitigate, or compensate for adverse impacts andimprove environmental performance. Any subproject determined to be under Category A wouldbe ineligible for financing under the project.

2. A proposed project is classified as Category B if its potential adverse environmental impacts onhuman populations or environmentally important areas - including wetlands, forests,grasslands, and other natural habitats - are less adverse than those of Category A projects.These impacts are site-specific; few if any of them are irreversible. The scope of EA for aCategory B project may vary from project to project, but it is narrower than that of Category AEA. Like Category A EA, it examines the project's potential positive and negativeenvironmental impacts and recommends anti measures needed to prevent, minimize, mitigate orcompensate for adverse impacts and improve environmental performance.

3. A proposed project is classified as Category C if it is likely to have minimal or no adverseenvironmental impacts. Beyond screening, no further EA action is required for a Category Cproject.

Environmental documentation and document contentThe CMU will screen investment program and assign the environmental category, and inform theoperator about the type and scope of environmental documentation -- environmental assessment(EA) and/or environmental management plan (EMP) -- that needs to be prepared, the consultationand disclosure requirements, and any other requirements under the Armenian law. The operator willbe responsible for carrying out the appropriate EA/EMP for the annual investment program as wellas for fulfilling the environmental requirements and obtaining all necessary permits. The EA/EMPwill include mitigation, monitoring and institutional arrangements.

Review and approvalThe CMU through its own environmental specialist, trained in environmental assessment work andfamiliar with Bank OP 4.01 as well as with Armenian environmental legislation, will review theenvironmental reports prepared by the operator and ensure that the proposed mitigation measures areadequate. The CMU will submit to the Bank and to the MNP the environmental screening

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assessment that has to include the analysis to justify the category assigned to each subproject. Afurther control will be provided by the Company Management Board that will supervise theactivities carried out by the CMU as well as review the investment program and the environmentalscreening and assessment work with the proposed EMP. The document for the EMP to be preparedby the operator will be sent to the MNP for review and approval.

If during construction, cultural and historical assets are found, the works must be stopped and theagency responsible for prevention of cultural heritage must be notified by the Contract MonitoringUnit. Works can resume only after permit from the respective authorities has been issued.

IX. PUBLIC CONSULTATION AND COORDINATION

The Armenian Environmental Laws regulating public consultation and coordination, as well asinformation availability to public are listed below:

* "The Fundamentals of the RA legislation on Nature Protection" ensure citizen's right torequest complete information concerning the environmental situation and obtain it in time.

* The Law "On Environmental Impact Assessment" sets forth the process of assessment ofenvironmental impacts.

* The new Water Code also addresses public participation principles.

The MNP according to existing legislation is responsible for ensuring public awareness about sub-projects of all EA Categories through mass media (TV, radio, newspapers), as well as notify localauthorities and concerned NGOs about environmental aspects of a project with further considerationof their views during project preparation and implementation phases.Taking into consideration requirements of the above mentioned legislation, as well as WBguidelines for all Category B subprojects, during the EA process, operator will consult project-affected groups and local NGOs about the project's environmental aspects and takes their views intoaccount. Operator will provide relevant material in a timely manner prior to consultation withproject-affected groups and local NGOs and in form and language that are understandable andaccessible to the group being consulted. Operator should inform population about EA conclusionaccepted by DEA of MNP.

Any separate Category B project report is made available to project-affected groups and localNGOs.

X. ENVIRONMENTAL MANAGEMENT PLAN

The EMP will be based on the results of environmental screening under the investment program andwill include appropriate mitigation measures.

Environmental Management Plan consists of four components:1. Mitigation measures and institutional responsibilities for implementation;2. Environmental monitoring;3. Capacity building and training; and4. Capital and recurrent costs.

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1. Mitization measures and institutional responsibilities for implementation

Section VI presents the potential negative environmental impacts during W&W systemsconstruction and operation. For each potential impact Table 1 identifies:

* the proposed mitigation measure(s); and* the parties or agencies charged with implementing those measures, separated into:

-- executing agencies, responsible for executing the measure;-- supervising agencies, responsible for supervising the executing agencies to ensure

that they execute the mitigation measures as planned; and-- monitoring agencies, in charge of monitoring the extent of implementation and the

effectiveness of the mitigation measures and of adjusting the program if needed.

The proposed mitigation measures and institutional responsibilities are grouped as follows,depending on the identity of the monitoring agency:

World Bank: includes all measures calling on the CMU and associated design institutes to obtainEA conclusion, permits for water use and discharge and for the disposal of excavated materials,wastes, and demolition debris from relevant agencies (MNP, MoH, local and regional authorities)before the construction works are tendered out;

CMU: includes all measures implemented by contractors/operators, and other institutes, supervisedby institutes affiliated with the SCWM, and monitored by the CMU; andPartner agencies to the CMU and SCWM: includes all measures requiring some sort of monitoringby key partners of the CMU/SCWM for this project, in particular the MNP and its affiliated agencies(Water Resources Protection Agency, Geological Department, etc.), MoH, Department of Historicand Cultural Monuments Preservation, ASWC, etc.

2. Environmental Monitoring

The three categories above show the wide range of monitoring functions. For example, as amonitoring agency, the World Bank will monitor the implementation of the EMP. In contrast, actualfield measurements of environmental indicators (e.g., analysis of drinking water quality by theASWC) are more elaborate and require advance planning and budgeting.

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Table I

Summary of Potential Negative Impacts, Mitigation/Monitoring Measures and Implementing Institutions

Potential adverse impacts | Mitigating, controlling and preventing measures Executing [Supervising T MonitoringAgency Agency Agency

Rehabilitation, Construction and Improvement of W&W SystemsPollution of water sources due to * Establishment/rehabilitation of sanitary protection zones Contractor, CMU MoH,domestic animal, cattle, sheep Construction MNPbreeding sub-contractor

organizations

Pollution of water and soil as a * Provide for zones of preliminary accumulation of wastes that will Contractor, CMU MNPresult of improper disposal of cause no damage to the vegetation cover and other components of the Constructionexcavated materials and environment; sub-contractorconstruction wastes * Arrange disposal of all types of wastes according to the established organizations

procedure and in the area designated for the specific purpose.

Pollution of surface water and . Periodically check technical condition of trucks and other transport Contractor, CMU MNP,soil by fuel and oil products means; Construction Local* Store and deliver oil products in compliance with relevant standards. sub-contractor Authorities

organizations

Temporary interruption of water * Use a system of staggering schedule for water supply cut-offs W & W CMU MoH,supply reasoning from the minimum needs of water supply to population; operation units, LocalContractor Authorities

Loss of fertile top soil due to * Restore temporary roads re-using the excavated soil up to the Contractor, CMU MNP,temporary access roads and work restoration of the vegetation cover; Construction Localareas * Consider and use plant species characteristic for the landscape in the sub-contractor Authoritiescourse of restoration of the vegetation cover; organizations

* Delinete access roads/work areas carefully and prevent theirexpansion;

* Rehabilitate access roads and work areas after work completion(scratch soil with special engine, put fertile topsoil in place, etc.).

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Degradation of landscapes and * Develop efficient methods for disposal or backfilling of extracted Contractor, CMU MNPsoil erosion soils; restore the vegetation cover; Construction

* Dump excavated soils and substances only within the areas designated sub-contractorfor that purpose. organizations

Damage to trees and vegetation . Restoration of the vegetation cover; Contractor CMU MNPcover a Select optimal route/design that requires uprooting the least number of Design Org. CMU

trees;* Compensate owners of fruit trees for loss of income caused by CMU

uprooting trees.

Landslides and landslips * Perform detailed geotechnical investigation and analysis of data Consultant CMUresulting from construction before starting the works; RAworks * Respect safety rules during the implementation of works (fencing of Contractor CMU Emergency

protection zones, use of required safety cloths and means, Managementorganization of preliminary safety measures to protect local Agencypopulation).

Impacts on historic-cultural and * Survey historic-cultural and nature monuments along proposed Design CMU MNP,nature monuments conveyance lines and incorporate protection measures in design Organizations Department of

accordingly; Historical and* Arrange necessary preservation measures (establish protection zones, Cultural

by-pass these areas during transportation and other); Contractor Monuments* Cease the works as soon as historical and cultural monuments are Protection

encountered during earthworks and provide relevant information to Contractorthe State Administration for Historical and Cultural Monuments.

Increased number of road * Develop and implement traffic management plan; Contractor, CMU Stateaccidents related to heavier . Install warning and prohibitory road signs accordingly along the entire Construction Administratiotraffic load length of the routes. sub-contractor n on Road and

organizations Transport,Local PoliceDepartment

Temporary air pollution (dust) * Reduce the scope of dust-raising traffic to the extent possible; Contractor, sub- CMU MNPrelated to the transportation of * Use closed/covered trucks for transportation of construction materials; contractorconstruction materials and truck * Clean the surrounding areas from dust by water sprinkling, removal of organizationstraffic excess materials and cleaning of sites upon completion of activities.

Noise and vibration disturbances . Terminate the works at the established time, and avoid increase of Contractor, CMU MNP,noise and number of peak hours; Construction Local

. Establish schedule and other specific restrictions; sub-contractor Authorities

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Limit work to daylight hours as possible. |oranizations

Operation and Maintenance of W&W Systems

Operation of water production facilities

Safety hazards from chlorination * Continuous control of chlorination stations; Operator SCWM MNPprocesses * Training of operators; MoHR

* Installation of chlorine leak detectors;* Require protection and emergency response equipment for operators.

Soil and water contamination by * Use of approved disposal sites according the Armenian legislation. Operator SCWM MNPwater treatment sludge (well,spring catchments)

Pollution of water sources due to * Proper operation and maintenance of sanitary protection zones Operator SCWM MoHR,domestic animal, cattle, sheep MNPbreeding

Operation of wastewater treatment facilities and sewerage distribution networkPollution of water and soil by * Provide for special accumulation areas according to the established Operator SCWM MNPdisposal of residual solid procedure (safety zone, adequate containers and other); MoHRproducts from mechanical and * Meet safety standards during transportation and use.biological treatment ofwastewater.

Disturbance to water quality by * Periodically check technical conditions of WWTP; Operator SCWMdischarged waste water * Periodically tests of treated waste water quality.

Implementation of pipe blockage removal works

Soil and groundwater * Provide adequate runoff control; Operator SCWM MNPcontamination by extraction run- * Replace all destroyed vegetation and all trench surfaces, according tooff appropriate RA Legislation.

Soil and water contamination by * Refill excavation in a proper way; Operator SCWM MNP,disposal of excavated soil and * Restore pavement; Local

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waste. * Use only approved, appropriate disposal sites. Authorities

Pollution of surface water and * Periodically check technical condition of trucks and other transport Contractor, Operator MNPsoil by fuel and oil products means; Sub-contractor

* Store and deliver oil products in compliance with relevant standards. organizations

Increased number of road * Develop and implement traffic management plan; Contractor, Operator, Stateaccidents related to heavier * Install warning and prohibitory road signs accordingly along the Transport sub- Local Police Administratiotraffic load entire length of the routes; contractor Department n on Road and

* Terminate the works at the established time, and avoid increase of organizations Transportnoise and number of peak hours.

Temporary air pollution (dust) * Reduce the scope of dust-raising traffic to the extent possible; Contractor, Operator MNPrelated to the transportation of * Use closed/covered trucks for transportation of construction materials Sub-contractorconstruction materials and truck as large as practicable; organizationstraffic * Clean the surrounding areas from dust with water.

Noise and vibration disturbances * Terminate the works at the established time, and avoid increase of Contractor, CMU MNP,noise and number of peak hours; Construction Local

* Establish schedule and other specific restrictions; sub-contractor Authorities* Limit work to daylight hours as possible. organizations

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3. Capacity Buildinz and Training

This section proposes the following key capacity building and training tasks:1. organizational set-up; and2. technical assistance and training.

Organizational set-upAs the key agency in charge of executing the MWWP and of supervising and monitoring theimplementation of the EMP, the CMU will have to designate a dedicated full-time staff member(provide 1 desktop computer and 1 printer) to coordinate and oversee the implementation of theEMP. In particular, the CMU environmental specialist will:* ensure the implementation of EMP actions;* coordinate EMP actions with other relevant technical agencies;* develop annual environmental work and field visits programs;* select consultants to carry out specific EMP actions;* supervise consultants and monitor their performance; and* monitor the water and environmental permitting process.

Capacity building and trainingIn order to help MWWP/CMU to fulfill their functions in relation to implementation of the EMPF,some basic training will need to be provided to the CMU staff, covering the following areas:* basic environmental management project cycle training and environmental assessment;* development of environmental management guidelines for contractors and how they

shall be applier to the full project cycle;* establish links with International agencies and Research centers engaged in

environmental protection activity related to water and wastewater problems;* seminar and field workshop for O&M staff on W&W systems management and

environment (1 seminar for 35 persons and 1 workshop for 20 persons);* technical assistance to the CMU: 2 person-months (national historic-cultural

monuments protection specialist, and specially protected areas specialist) + in-countrytravel.

Incremental Costs of the EMP

The incremental costs of the proposed EMP are estimated at about US$ 27,000, including the costsof equipment and supplies, environmental capacity building and training. This budget also includesUS$ 10,000 to conduct detailed geotechnical study of landslide hazard areas and sites, beforerehabilitation/reconstruction works will be carried out. The budget does not include the salary of thefull-time environmental specialist in the CMU (and associate expenses) during the life of the project.

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Table 2.Summary of Estimated Costs of Proposed EMP

Cost Item Costs (US$)Environmental capacity building and training 17,000* International training for Environmental Specialist 3,500* Seminars for O&MD staff on W&W systems management and environment 4,000(1 seminar for 35 persons)* Field workshops for O&MD staff on W&W systems management and environment 3,500

(1 workshop 20 persons).* Technical assistance to CMU: 1 person-months (historic-cultural monuments protection 6,000

specialist and specially protected areas specialist) + in-country travelOther EMP Requirements with Cost Implications 10,000* Conduct detailed geotechnical study of landslide hazard areas and sites 10,000

Incremental Costs of the EMP $27,000

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