Varun Shipping Company Limited II - 1st A and B loan tranche

completed

Environmental Review Summary (ERS)Project Name India:Varun Shipping Company LimitedRegion AsiaSector InfrastructureProject No. 007107 1. This project involves the expansion of Varun’s existing fleet of 10 ships, by acquiring five secondhand vessels of the following types: two liquid product tankers; two small chemical tankers; and one LPG carrier. The vessels to be purchased are similar to those in the existing fleet and will increase Varun’s current tonnage from 209,000 DWT to approximately 306,000 - 340,000 DWT. Varun operates modest onshore facilities, including the main office and a few single family residences. The company does not have crew housing, maintenance or dry docking facilities, and does not provide onshore services for storage and handling of cargo or handling and disposal of vessel wastes (e.g., oily ballast, garbage, sewage); these services are provided by established port facilities.2. This is 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. The review of this project consisted of appraising technical and environmental information submitted by the project sponsor, and the technical appraisal and site review completed by IFC’s staff. The following potential environmental, health and safety impacts of the project were analyzed: . air emissions; . liquid effluents; . spill prevention; . hazard control; . fire prevention; . emergency response; and . marine safety.The information provided about how these potential impacts are addressed in the development of the proposed project is summarized in the paragraphs that follow.3. All ships of Varun’s fleet are required to comply with conventions as applicable and agreed within the International Maritime Organization (IMO). These standards include treatment and disposal of domestic and industrial solid waste generated from Shipboard operations, treatment and/or disposal of domestic sewage, ballast, bilge and storage compartment waters or other effluents. The ships in Varun’s fleet comply with the requirements stipulated under IMO regulations, and are in possession of valid certificates. Varun has been proactive in complying with recent revisions of the applicable regulations for its vessels including the Oil Pollution Act of 1990 (OPA 90), which imposes additional requirements for Shipowners and Operators trading in US waters.4. Varun has a management plan in place to maintain the necessary shipping Certificates and provides the required training to officers and crew, including spill prevention, fire prevention and emergency response. Varun’s safety record is good; no major accident involving vessels in its fleet has been reported in recent years.5. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that the proposed project is being designed to meet Government of India requirements, and World Bank policies, and environmental, health and safety guidelines.6. IFC will monitor Varun’s ongoing compliance with World Bank policies and guidelines during the life of the project by evaluating environmental reports submitted annually to IFC by the sponsor and by conducting periodic site reviews during project supervision.January 5, 1996 12:50 PM