INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 06/03/2013 Report No.: AC6950 1. Basic Project Data Original Project ID: P083108 Original Project Name: RAIL TRADE AND TRANSPORT FACILITATION Country: Azerbaijan Project ID: P146125 Project Name: Rail Trade and Transport Facilitation AF Task Team Leader: Jacques Bure Estimated Appraisal Date: Estimated Board Date: June 27, 2013 Managing Unit: ECSTR Lending Instrument: Sector: Railways (90%);Other domestic and international trade (10%) Theme: Infrastructure services for private sector development (50%);Corporate governance (25%);Trade facilitation and market access (25%) IBRD Amount (US$m.): 220 IDA Amount (US$m.): 0 GEF Amount (US$m.): 0 PCF Amount (US$m.): 0 Other financing amounts by source: Borrower 0.00 0.00 Environmental Category: B - Partial Assessment Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [X] or OP 8.00 (Rapid Response to Crises and Emergencies) 2. Project Objectives The project development objective is to "improve railway services in Azerbaijan, as well as the competitiveness, financial sustainability, operating and cost efficiency, and capacity of the Azerbaijan Railways (ADY) in particular along the transport corridor toward Georgia (east-west corridor)". 3. Project Description The project finances some key elements of the Government's Rail Investment Program that will improve service on the East West mainline from Baku to the Georgian border, which carries most of ADY's traffic. The Government's Rail Investment Program includes rehabilitation of track and replacement of signaling, electric power supply, and locomotives for the corridor. The project also supports railway sector reforms through financing technical assistance for modernization. The original project collectively financed activities under four below components while the additional financing will finance components 1, 3 and 4: Component 1: Rehabilitation of East-West Main Line Provision of goods, works and services to: (a) rehabilitate about 240 km of mainline track; (b) convert power supply on the East-West Main Line; and (c) upgrade signaling, compatible with the new 25kV AC power supply system. Component 2: New Mainline Locomotives Provision of goods and services in order to provide mainline 25kV AC electric locomotives to operate on the east-west corridor. Component 3: Modernization of ADY Services Provision of works, goods, services and training in order to: (a) support the implementation of some activities in the framework of the Borrower's Government Program for the Development of Azerbaijan State Railways 2008-2011, including, but not limited to, for the transition to the International Financial Reporting Standards and legal restructuring of the ADY; and (b) improve its oil spill prevention capacity. Component 4: Project Implementation Support of the PIU for effective implementation of the Project, through provision of goods, consultants' services and training 4. Project Location and salient physical characteristics relevant to the safeguard analysis The project addresses the Azerbaijan side of an Azerbaijan-Georgian transport corridor, which is the most heavily used corridor and part of the larger corridor from Baku to Georgian ports that carries in particular transit oil traffic. 5. Environmental and Social Safeguards Specialists Mr Daniel P. Owen (ECSSO) Ms Gulana Enar Hajiyeva (ECSEN) 6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: The rehabilitation of rail track, the conversion to 25 kV power supply system and the renewal of the signaling are the primary investments of the project covered by the EMP – the EMP will be updated once the design for the signaling renewal is available. The rehabilitations will allow more efficient transport of goods such as crude oil and oil products. Impacts are expected to be temporary and related to the direct rehabilitation of these rails tracks and set up of potential new power substation, replacement of sleepers, reballasting replacement of tracks, including: noise in residential areas; rehabilitation of the track; dust and exhaust emissions from equipment; vibration; and waste management, possibly including hazardous wastes, for example when replacing old transformers. The metal wastes and oil stained wooden bars from rail and sleeper replacement will be collected into special containers and transported to a disposal site. The new power supply and locomotives will be significantly more energy efficient, and track upgrades will significantly reduce risks of derailments related to track condition. No land acquisition through expropriation is anticipated, nor is loss of access to income expected. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: Long-term impacts of the project are expected to be positive due to more energy efficient power supply system and locomotives, as well as due to the introduction of the Oil Spill Response Plan. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. N/A 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. The implementing agency - Azerbaijan Railways (ADY) - has been a member of the Railway Organization for CIS Countries since 1992. This organization provides guidance to its member countries on environmental matters, spill management and procedures for the transport of hazardous materials. In order to analyze the potential environmental impacts and identify mitigation measures and implementation arrangements for the project, the ADY prepared the Environmental Management Plan (EMP) in 2007 and updated in 2010. The identified impacts include: (i) Impact on air quality: dust and exhaust emissions from operation of construction equipment will be mitigated by using water spraying, ensuring proper ventilation of internal areas and regular checkup of engines. (ii) Impact on water: contamination of water by discharge of untreated waste waters during the construction phase will be mitigated by mechanical treatment and/or disinfection of water prior to discharge into water reservoirs. (iii) Impact on land: impact caused by excavation during construction / rail and sleepers replacement and by improper disposal of wastes, metal garbage and oil stained wooden bars will be mitigated by taking/disposing of excavated materials from/at approved sites; collection, transportation in covered containers and proper disposal of wastes during and upon completion of construction phase. (iv) Impact of noise and vibration in residential areas, caused by operation of the construction equipment will be mitigated by keeping noise level below maximum permissible level for each type of equipment. Since the project restructuring does not envisage any changes to the nature of track rehabilitation activities, the original EMP remains applicable for the purposes of restructuring. The replacement of signaling system is considered by a separate specific EMP (already envisaged by the project overall EMP and currently under preparation) which is subject to Bank's prior review and approval. The Metrology, Standardization, Certification and Ecology Department of the Technical and Production Service (TPSD) in ADY is responsible for environmental management including the development and implementation of this EMP, and is based in Baku. TPSD has 3 staff in the central office that has specific responsibility for environmental management. Environmental issues are managed on a day to day basis through local departments each having a staff member assigned to environmental matters. The local departments in ADY are responsible for the preparation of Ecological Passports and action plans for each section of rail line in their district. These passports are issued by the Ministry of Ecology and Natural Resources (MENR) and include limits for pollution. They are renewed every 3 years following MENR audit. In order to ensure overall compliance with the passport conditions, the TPSD carries out regular inspections of ADY operations. The capacity of ADY is assessed to be relatively good in relationship with the type of works foreseen. Staff are cognizant of good practices and their responsibilities for environmental management, emergency response and spill management as well as transportation of dangerous goods and wastes. The project will provide capacity building (training, procedures, equipment) related to the prevention and response capacity for rail related oil spills that may result from derailment or regular operations. Training and operational budget required for ADY to carry out its monitoring functions for this EMP are included in the project. The TPSD will have primary responsibility for the implementation of the EMP. The TPSD will ensure inclusion of environmental provisions into construction / rehabilitation and locomotive purchase contracts, and will supervise operation of contractor to ensure compliance with the environmental provision of the contracts. ADY is expected to understand all the conditions under which the social safeguard OP4.12 policy would be triggered. ADY will need to communicate to the Bank immediately in the event this scenario arises in order that appropriate measures for compliance be taken. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Azerbaijan State Railways (ADY), potential users / passengers of the east-west transport corridor, local communities residing along the corridor (likely to be affected by the project), local executive authorities and baladiyyas (municipalities) are the key stakeholders. The preparation of the Environmental Management Plan has initiated a process of consultations with beneficiaries and stakeholders. When the draft EMP was available for disclosure, ADY carried out public consultations in all rayons along the corridor, with participation of representatives of local communities, municipalities, local governments, NGOs. During the consultations safeguard issues, measures envisaged by the EMP to mitigate potential impacts were discussed, and all issues raised by the audience were addressed by ADY. The EMP has been placed at the Aarhus Convention Centre of the Ministry of Ecology and in executive authorities' offices along the route of the rail corridor. Public has been informed through the local newspapers on availability of the EMP in English and Azeri for review. The specific EMP which is being prepared for the replacement of the signaling system will also undergo a round of public consultation to be duly recorded. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 01/08/2007 Date of "in-country" disclosure 04/04/2007 Date of submission to InfoShop 05/30/2007 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Pest Management Plan: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? N/A If yes, then did the Regional Environment Unit or Sector Manager (SM) N/A review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated in the N/A credit/loan? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank's Yes Infoshop? Have relevant documents been disclosed in-country in a public place in a Yes form and language that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities Yes been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project Yes cost? Does the Monitoring and Evaluation system of the project include the Yes monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the Yes borrower and the same been adequately reflected in the project legal documents? D. Approvals Signed and submitted by: Name Date Task Team Leader: Mr Jacques Bure 05/28/2013 Environmental Specialist: Ms Gulana Enar Hajiyeva 05/28/2013 Social Development Specialist Mr Daniel P. Owen 05/28/2013 Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Mr Daniel P. Owen 05/29/2013 Comments: AF is essentially covering a financing gap and is not proposing any extension or other change in the nature of activities to be financed, I can confirm the ISDS is cleared as acting RSC. Sector Manager: Mr Juan Gaviria 05/29/2013 Comments: Per acting Regional Safeguards Coordinator's concurrence, I confirm this ISDS is cleared.