South Asia Gateway Terminals (SAGT)

completed

International Finance CorporationA Member of the World Bank GroupEnvironmental Review Summary (ERS)Project Name: SRI LANKA: South Asia Gateway TerminalRegion: AsiaSector: InfrastructureProject No: 0079741. The project involves the extension of the existing container terminal Queen Elizabeth Quay (QEQ) into the harbor basin at the Port of Colombo. SAGT proposes to widen the QEQ by approximately 100 meters along its length thereby increasing the container transhipment capacity from 230,000 to about 1,000,000 TEU. The extension of the quay will cover an area of 12.5 ha and provide an additional 9 ha of container stacking area. Construction activities will include dredging, demolition, new building construction, and wharf and pavement construction. Utility services (i.e., water, electricity, etc.) are existing and available. No significant changes in the existing Port workforce are anticipated.2. This a category B project according to IFC’s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria. IFC’s Technical and Environmental Department staff’s review of this project consisted of appraising technical and environmental information submitted by the project sponsor. The following potential environmental, safety and health impacts of the project were analyzed:· Disposal of dredge spoils;· Liquid and solid waste management;· Shipboard waste oil management;· Demolition/construction waste disposal;· Spill/emergency response and prevention; and· Employee health and safety.The sponsor has presented plans to address these issues and to demonstrate that the proposed project will comply with applicable Sri Lanka laws and regulations and World Bank requirements. The information provided about how these potential impacts are addressed by SAGT is summarized in the paragraphs that follow.3. To expand the QEQ, SAGT will have to dredge about 100,000 m3 from an area of the harbor basin. This is an area that has been dredged repeatedly over the years by the Sri Lanka Port Authority (SLPA), and analyses of the material show moderate heavy metal contamination. Material from the harbor basin will be dumped in a designated, approved offshore dumping area to the north of Colombo over a period of 3 years. Given the expected minimal loading of heavy metals in the material, and considering its dispersion by strong currents at the dump site, the impact on fisheries in the dumping area is likely to be small.4. Prior to commencement of construction, SAGT will determine the physical and chemical quality (including the chromium, copper, lead, mercury, nickel, selenium, zinc content)of the harbor bottom sediment to be dredged/disturbed as a result of the QEQ expansion project. SAGT may either conduct their own investigation, or rely on the results of the ongoing World Bank sediment assessment project, if available. Based on this determination, SAGT will then develop a Dredging Plan for the disposal of dredge spoil commensurate with the pollution levels anticipated during dredging activities. SAGT will submit the Plan to IFC for approval.5. Sewage generated at the QEQ will be discharged into the existing municipal sewerage system through a new connection to be built as part of this project. Industrial wastewaters, such as discharges from workshops, vehicle and equipment service areas, and fueling areas, will be pretreated in an industrial wastewater treatment system prior to sewer discharge. Oily and chemical wastes removed by this treatment system will be disposed at approved off-site facilities. Solid waste will be collected, transported to, and disposed at an approved landfill site.6. The current management of waste oil and oily mixtures from ships at the Port is generally recognized as inadequate and falls short of International Maritime Organization (IMO) guidelines. To remedy this problem, Sri Lanka governmental authorities are considering proposals for development of a privately owned and operated waste oil collection and treatment facility within the Port. If the Government does not improve the Port’s waste oil reception facilities, the QEQ expansion will increase the potential for unregulated dumping of waste oil by ships. Prior to first disbursement, IFC must receive evidence that appropriate, IMO-compliant waste oil reception facilities will be available to ships served by the SAGT operations.7. There is a possibility that hazardous materials – asbestos and soil contaminated with oil -- may be encountered during construction of the facilities. Prior to first disbursement, SAGT will conduct a construction site contamination investigation, including both the structures to be demolished and the soils within the construction site, to determine the presence of any hazardous materials (e.g., asbestos containing materials, soils contaminated with oils and/or toxic compounds, etc.). Based on the results of this contamination investigation, SAGT will develop a Hazardous Construction Materials Disposal Plan describing the types of hazardous materials and debris expected to be encountered and the methods by which they will be handled and disposed. SAGT will submit the Plan to IFC for approval.8. SAGT will work with the Sri Lanka Port Authority to ensure that appropriate and expanded fire fighting and emergency response (e.g., oil spill containment and clean-up) capabilities are being considered prior to first disbursement, so that there will be no increased risks from the additional activity created by the QEQ expansion. IFC understands that ultimate responsibility for providing these services under the Concession Agreement rests with the Sri Lanka Port Authority. However, if there is a delay in the provision of these services, SAGT should provide temporary arrangements to limit the possibility of any environmental impact.9. SAGT will address all aspects of employee health and safety during construction and operation of the facilities. The company has established a Health and Safety policy, and during implementation they will ensure that employees are protected from hazards and risks in the workplace. Safety training will be provided, and a regular program of workplace inspections and audits will be established. Prior to first disbursement, SAGT will develop an Environmental, Health and Safety Plan and Manual which describes the policies and procedures for ensuring compliance with all applicable requirements. The Plan shall also describe responsibilities for implementation, training and awareness, and the monitoring, inspection and auditing programs for environment, health and safety activities.10. IFC will monitor ongoing compliance with World Bank environmental, health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by SAGT and by conducting periodic supervision.11. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that SAGT’s proposed project will meet World Bank environmental, health and safety policies and guidelines and host country requirements.