Turkey - Ankara Air Pollution Control Project

Document of The World Bank FOR OMCIAL USE ONLY Reqpot No. 6003-TU PROJECT COMPLETION REPORT REPUBLIC OF TURKEY ANKARA AIR POLLUTION CONTROL PROJECT (LOAN S-15-TU) December 26, 1985 Water Supply and Sewerage Division Europe, Middle East and North Africa Region Thi domsmat k rbrIatd ilIbUlb. sd may be ud by weelplets ady In the perfonna ofi ther ,l.l dais.. I emmiam ad otherwie be d,slmd witout WoM lak autboritlim.  CURRENCY EQUIVALENTS Currency unit: Turkish Lira (TL) 1979 US$1 = TL 47.10 1984 US$1 = TL 400 ACRONYMS BCM - Environment Protection Undersecretariat (Basbakanlik Cevre Mustesarligi) MTA - Mineral Research Institute NATO - North Atlantic Treaty Organization TKI - Turkish Coal Board UNDP - United Nations Development Program FISCAL YEAR January 1 - December 31  FOR OMCMIA USE ONLY REPUBLIC OF TURKEY LOAN S-15-TU ANKARA AIR POLLUTION CONTROL PROJECT PROJECT COMPLETION REPORT Table of Contents Page No. PREFACE ..i........................ BASIC DATA SHEET.ii HIGHLIGHTS.......................... iv I. INTRODUCTION ..1.................. II. PROJECT PREPARATION AND APPRAISAL ........... Project Origin and Preparation ........... I Project Objectives ................................. 2 Project Description .2n 2 Negotiations and Approval.............. 3 Loan Covenants................... 4 III. PROJECT IMPLEMENTATION AND COST........... 4 Loan Effectiveness................. 4 Project Implementation.4 ............................. Procurement . 5 Project Costs.................... 5 IV, INSTITUTIONAL PERFORMANCE ..............6 V. BANK PERFORMANCE.................. 6 VI. JUSTIFICATION ....................6 VII. CONCLUSIONS .....................7 A P, - Cornments frorn the Government and Executing Agency 8 F iT document has a restricted distribution and mnay be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  REPUBLIC OF TURKEY LOAN S-15-TU ANKARA AIR POLLUTION CONTROL PROJECT PROJECT COHPLETION REPORT PREFACE This report reviews the preparation, implementation and achievements of the Engineering Loan for the Ankara Air Pollution Control Project (Loan S-15-TU), for which a loan of US$6 million was made to the Governmeat of Turkey. The loan was signed in December 1979, became effective in April 1980 and was closed in July 1984 after cancellation of US$4.45 million. The Environment Protection Undersecretariat (BCM) was the coordinating agency for the project. The Project Completion Report was prepared by the Europe, Middle East and North Africa Regional Office on the basis of a review of the President's Report, the Loan Agreement, and other reports related to project implementation. In accordance with the revised procedures for project performance audit reporting, this PCR was read by the Operations Evaliation Department (OED) but the Project was not audited by OED staff. Following normal procedures, OED has sent copies of the draft PCR to the Government and executing agencies for their comments. These comments have been reproduced as Appendices A and B to the report.  - ii - REPUBLIC OF TURKEY LOAN S-15-TU ANKARA AIR POLLUTION CONTROL PROJECT PROJECT COMPLETION REPORT BASIC DATA SHEET KEY PROJECT DATA Item Appraisal Actual Estimate Total Project Cost (US$ Million) 11.25 1.80 Underrun (%) 84 Credit Amount (US$ Million) 6.0 6.00 Disbursed 6.0 1.55 'Cancelled - 4L45 Date of Physical Completion 6/83 6/84 Proportion Completed by Above Date (2) 100 100 Time Overrun (2! 23 Institutional Performance N/A Cumulative Disbursements (US$ Thousands) FY80 1.50 0.30 FY81 4.50 0.35 FY82 6.00 0.35 FY83 0.90 FY84 1.55 OTHER PROJECT DATA Original Plan Actual First mention in files - 6/78 Government Application - 8/78 Negotiations - 6/79 Board approval - 10/23/79 Loan agreement date - 12/12/79 Effective date 04/11/80 04/04/80 Closing date 12/31/83 12/31/83 /a Borrower Republic of Turkey Coordinating Agency Environment Protection Undersecretariat Executing Agencies Turkish Coal Board Ministry of Health /a Final disbursement was on 07/10/84.  - iii - BASIC DATA SHEET (Continued) KISSION DATA Month, No. of No. of Staff Date of Purpose Year Days Persons Days Report Identification 12/78 10 4 40 01/03/79 Appraisal 03/79 15 4 60 10/03/79 Supervision 05/80 4 1 4 05/09/80 Supervision 01/81 8 1 8 02/17/81 Supervision 06/81 9 1 9 07/21/81 Supervision 05/82 4 2 8 06/29/82 Supervision 12/82 2 3 6 01/10/83 Supervision 02/83 1 1 1 02/28/83 Supervision 06/83 1 1 1 06/25/83  - iv - REPUBLIC OF TURKEY LOAN S-15-TU ANKARA AIR POLLUTION CONTROL PROJECT PROJECT COMPLETION REPORT HIGHLIGHTS Loan S-15-TU, approved in November, 1979 for an amount of US$6 million, was the Bank's first and so far only loan to Turkey in the environmental protection sector. The Government of Turkey was the borrower and the Enyironment Protection Undersecretariat was the coordinating agency. Loan S-15-TU was expected to finance the estimated foreign exchange requirements covering about 53% of total project cost of US$11.25 million. Th'e project was essentially experimental and research oriented with the ultimate objective of reducing the air pollution in Ankara through investigations of promising methods of manufacturing smokeless fuel from lignite and through studies to identify alternative feasible technologies. The project contained five major components (i) alternative technology study; (iii) start-up of the coking plant at Seyitomer; (iii) development of a hot briquetting process; (iv) long term measures for pollution reduction; and (v) immediate measures for pollution control (para. 2.08). The loan became effective in April 1980 (para. 3.01)! The implementation of the project did not proceed as envisaged since it became obvious at an early stage that no feasible technological processes existed for the man'ufacture of smokeless fuel based on the poor quality Turkish lignite. Neither would the limited available lignite -- after a subsequent decision to allocate the bulk of the available lignite from the only feasible site to power generation -- be sufficient to justify the development of a gasification plant (para. 3.03-3.06).  -v - The implementation of the air pollution monitoring program proceeded well and was eventually expanded (para. 3.07). Total project costs were aubstantially reduced because of the changes in scope of work. They amounted to US$1.8 million, or 16% of the appraisal estimate (para. 3.09). The level of air pollution in Ankara remains high. Additional studies are needed to identify practital measures to be taken in the medium and long term. Greater use of nati -al gas and low sulphur oil and the construction of combined heat and power stations to meet the city's energy needs may have to be considered as part of a balanced energy program.  REPUBLIC OF TURKEY LOAN S-15-TU ANKARA AIR POLLUTION CONTROL PROJECT PROJECT COMPLETION REPORT I. INTRODUCTION 1.01 The Engineering Loan of US$6.0 million equivalent was to be used to finance the foreign exchange costs of consultant services, materials and equipment in order to enable the reduction of the severe winter air pollution in Ankara. 1.02 The borrower was the Republic of Turkey with the Environment Protection Undersecretariat (BCM) acting as coordinating agency. The Turkish Coal Board (TKI) was responsible for the implementation of the various project components with assistance to be provided by the Mineral Research Institute (MTA) for the development of a hot briquetting process. The Ministry of Health was given the responsibility for air pollution control and monitoring. II. PROJECT PREPARATION AND APPRAISAL Project Origin and Preparation 2.01 Ankara, the capital of Turkey, situated at an altitude of 800 meters and surrounded by hills, suffers from harsh climatic conditions during the winter. The topographical feature inhibits air circulation causing the chimney smoke and car exhaust to hang over the city, creating severe air pollution. Th s pollution causes general inconvenience and discomfort and also serious respiratory and bronchial diseases among the population. The peak levels of sulphur dioxide (SO2) in the air had exceeded 500 ug/m& more than once in some winters. By comparison WHO's recommended limit is 150 ugIm3. The pollution was mainly caused by the use of highly sulphurous fuel oil and poor quality lignite for heating purposes. 2.02 Turkish authorities had long been concerned with air pollution. A NATO study during 1969-72 had led to the establishment of a monitoring network and several consultants, under the auspices of the UNDP had given advice to the Government, which, inter alia, had resulted in the creation of BCM. 2.03 In the spring of 1978 the Government had asked the Bank for assistance to finance a project to help reduce Ankara's air pollution. In this coinection, preliminary feasibility studies had been submitted for Bank review on (i) a hot briquetting plant (the MTA process) and (ii)  a district central heating scheme. The Bank, however, had concluded that the proposed hot briquetting process was not sufficiently developed to justify the construction of a full scale plant and that more investigations would be required for a central heating system. 2.04 The Bank then recommended and the Government agreed to proceed with an Engineering Loan to finance the design and construction of a pilot plant for the MTA process, for modifications to TKI's coking plant (para. 2.06) and for the implementation of studies to identify other possible immediate and long-term solutions. Project Objectives 2.05 The project objectives were to develop prom.ising methods of manufacturing smokeless fuel from lignite and to investigate other possible technologies, which could provide a more appropriate clean fuel to reduce air pollution in Ankara in the future. Project Description 2.06 A plant had been built for TKI at Seyitomer by two contractors on a turnkey basis. The first part of the plant was meant to dry lignite from an adjacent mine, while the second part, the carbonization unit, was intended to produce coke. The plant had started operations in September 1976, but had been plagued with failures due to inexperience, power and water supply cuts and technical problems. Technical modifications were introduced and an attempt at restarting the plant was made in August 1978. This proved unsuccessful due again to a series of power failures and other technical problems. In September 1978 the start-up attempt had been abandoned following an explosion in the air discharge area of the carbonization unit. A Bank mission, supported by consulting specialists then visited Turkey and concluded that problems encountered in the plant start-up had not been exceptional for this type and size plant, using Seyitomer lignite. Finally, as a condition of the loan, agreement had been reached in mid-1979 on further modifications of the plant to put it in operating condition. 2.07 The MTA hot briquetting process had been under development on a laboratory scale to produce smokeless fuel by carbonizing crushed lignite and briquetting the resulting char. The test plant had been designed to produce 100-200 kg per hour. However, it had been operated only intermittently and the results had not been conclusive. 2.08 The project, which was essentially experimental and research oriented, was to have consisted of the following five components: (a) Alternative Technology Study: Consultant services to include a feasibility study, detail design, tender documents, and cost estimates to determine whether internationally known and established processes could be used to manufacture smokeless fuel using Turkish lignite; this would then also be compared with the processes employed at Seyitomer;  (b) Start-Up of TKI Coking Plant at Seyitomer: Technical and financial ,sistance to catry out the necessary modifications and stait-up operations on the existing coking plant at Seyitomer; (c) The MTA Hot Brigiuettin Process: Development of the MTA hot briquettitng process by the provision of consuliant services and funds for the design, construction and operation of a pilot plant of 2-3 ton/hour capacity; (d) Long-Term Measures for Pollution Reduction: Consultant services to review and evaluate the feasibility of producing fuel gas using Turkish lignite as an appropriate long-term measure, and to compare its economic viability with such other alternatives as district heating, geothermal energy, desulpherization of oil and distribution of propane gas; and (e) Immediate Pollution Control Measures: Procurement of monitoring equipment for the implementation of a pollution control program and such immediate pollution control measures as could be taken. Negotiations and Approval 2.09 Negotiations were conducted with the Government in July 1979. On October 23, 1979, the Board approved a loan of US$6.0 million to the Republic of Turkey and the Loan Agreement was signed on December 12, 1979. Loan Covenants 2.10 The following main covenants were incorporated in the Loan Agreement. (a) In order to assist TKI in carrying out the Project, the Borrower would cause TKI to employ consultants whose qualifications, experience and terms and conditions of employment would be satisfactory to the Bank (Sec.3.02 [al); (b) The Borrower would exchange views with the Bank with regard to the recommendations of the study for the production of fuel gas prior to committing itself to any investments (Sec. 3.07); (c) The Borrower would, through BCM, implement a pollution monitoring program satisfactory to the Bank and furnish annual reports to the Bank on the results (Sec. 3.08); and (d) The Borrower would cause MTA and TKI to enter into a protocol not later than December 31, 1979, for the provision of technical assistance by MTA to TKI in the preparation of design, supervision of construction and operation of the pilot plant for the hot briquetting process (Sec. 3.10). Because of changes in project implementation, only the covenant given in (c) above became applicable.  III. PROJECT IMPLEMENTATION AND COST Loan Effectiveness 3.01 There were two conditions of effectiveness, i.e. the-formal ratification of the Loan Agreement and the execution of the TKI Subsidiary Loan Agreement between the Borrower and TKI. The loan was declared effective on April 4, 1980, or about four months after signing. Project Implementation 3.02 The implementation of the five project components is summarized below. 3.03 Alternative Technology Stud: Terms of reference were prepared and consultant proposals were received and evaluated in 1979. However, the Turkish authorities were reluctant to proceed until an extensive survey of existing literature was undertaken by MTA to better assess the chances of success of such a study. MTA undertook the review and concluded that there was no suitable process for manufacturing smokeless fuel with the poor quality lignite available in Turkey. This was further confirmed by the results which emanated from the Seyitomer and MTA plants. The Bank concurred with the decision to drop this study. 3.04 The TKI Coking Plant at Seyitomer: The plant modifications agreed upon in mid-1979 (para. 2.06) were started, then interrupted over a payment dispute between the contractors and TKI, the operator. Modifications were eventually made and new attempts at starting up operations carried out. However, shortcomings in the plant itself, failures in power and water services and problems with the feedstock continued to impede steady operation. By 1982 Bank consultants who visited the site reported that the plant was operating and approaching the design throughput level, although the size and strength of the product were inadequate, the moisture too high and the volatile content too low. Then, during commissioning in June 1982, another explosion occurred in the carbonization unit causing severe damage. In light of this long experience of failures and poor quality product, TKI decided that the carbonization process was not viable and the unit would not be rebuilt. Nevertheless, the drying unit which was unaffected would continue to be used to dry up lignite which, after deactivisation with cool air to prevent spontaneous combustion would be sold to cement production plants. The Bank agreed to this course of action. 3.05 The MTA Hot Briguetting Process: Terms of Reference were prepared and consultant proposals were received for the design of a pilot plant. Prior to proceeding, the Bank had requested that some additional tests be carried out on the existing laboratory plant in order to further verify the viability of the process. Based on the results of these tests it was concluded that the processing method for hot briquetting was not sufficiently promising to warrant investing in a larger scale pilot plant. The Bank agreed with this conclusion. 3.06 Long-Term Measures for Pollution Reduction: The use of a clean fuel like gas for heating had been considered as a long term solution for  .i r pollution abatement. For this purpose alternative technological processes were to be analyzed and evaluated. However, shortly after the terms of reference for the required studies were agreed upon, a decision was made to allocate as much as 85% of the lignite available at Beypazari (the only feasible source within a reasonable distance from Ankara) to power generation, leaving an insufficient quantity to sustain a gas production plant. Consultant proposals were consequently not invited, and the Bank agreed with the decision not to proceed with these studies. 3.07 Immediate Pollution Control Measures: This component of the project was designed to reinforce and upgrade the limited air pollution- monitoring program already in existence. The initial batch of equipment ordered in December 1981-consisted of 17 semi-automatic stations. Another 17 similar stations wece later added. Each station covers an area of 2 km2. Subsequently the system was further improved by setting up two fully automatic stations reporting to two local centers with each center reporting by telemetry to a main control center. For pollution control purposes, four "danger" levels have been established by the Government (Ministry of Health). Depending on the measured conditions, heating has been restricted, traffic partially stopped, and offices and schools shut down. Procurement 3.08 The air pollution monitoring equipment was procured through international competitive bidding. The only other item for which Bank funds were utilized was the rehabilitation of the Seyitomer Coking Plant. Due to the proprietary nature of this plant a suitable contract was negotiated and signed with the contractor who had originally built it. Project Costs 3.09 Appraisal and actual project costs are shown below: Appraisal Actual Local Foreign Total Local Foreign Total ---------------- US$ MilMlions Alternative Tech. Study 0.20 1.10 1.30 - - - Fuel Gas Study 0.20 0.35 0.55 - - - Technical Assistance for: Seyitomer Plant 0.25 0.35 0.60 0.25 0.35 0.60 MTA Pilot Plant 3.00 3.00 6.00 - - - Pollution Monitoring Equipment 0.10 0.55 0.65 - 1.20 1.20 Physical Contingency 0.40 0.20 0.60 - - - Price Contingency 1.10 0.45 1.55 _ - - Total 5.25 6.00 11.25 0.25 1.55 1.80  -b- An overall comparison betweun appraisal and actual costs would not be meaiiingful because tt the significant changes that have occurred in the scope of the projtct. T;. I--t I t.atecd to the Seyitomer plant did not exceeO' original estdmti , whilI thu co.st ef Lhe lpollution monitoring equipmn- alttiost doubled bucause ot idditionzal tequipitment instLalled (para. 3.07). I V. lT I IUT IUNAi PERFORMANCE 4.01 The projcct imrpli1iti:1 t ;ti1.i t criud was i 'a time of important political tLhanges in Turkey. The ei,suItLii! UtnLertainLy affecLed the project in various ways, notahlLv rhe C11S:." Lfilaiouy et personnel assigned to the project, inadequate implcm ,:tatiun .oordinrat'on and delayed dlecisions. In retrospect, however, these problems were nlot relevant to the disappointing outcome of project investigatioas. V. BANK PERFORMANCE 5.01 The projecL was regularly supervised. Bank missions were adequately staffed and consultants were engaged to advise the Bank and the Borrower on various technical matters. The Bank and the consultants assisted in the preparation of the terms of references of the different studies that were to be carried out under the project as well as in the review of the design and technical specificationis for the equipment procured. 5.02 The Bank adjusted its approach to project implementation as more information and data became available and, with the Borrower, reached the conclusion that the studies and the pilot plant components should not be carried out (para. 3.03 through 3.06). VI. JUSTIFICATION 6.01 In order to reduce air pollution to reasonably low levels, clean fuel is needed for Ankara's domestic needs. The limited proven resources of natural gas and the critical shortage of foreign exchange for the purchase of low-sulphur oil made it imperative to investigate any possibility of developing, in the medium-term, smokeless fuel from local lignite. 6.02 The installation of an appropriate pollution control system was required to enable monitoring of present air pollution, to establish a warning system and to create a data base for actions to be taken on pollution control on short and long term bases. 6.03 The engineerKng loan was designed to assist the Government within the framework of thie above imperatives. As a result it has been possible to conclude that for the time being there does not appear to exist a feasib'e techniological Drocess for the manufacture of smokeless fuel based on the poor  -7 quality Turkish lignite. Neither would the litaited availability of lignite justify the development of a gasification plant. 6.04 An extensive air pollution control system has been established and is functioning well. This has enabled a number of short term measures to be taken such as the identification of priority areas where low-sulphur oil and washed lignite should be used. VII. CONCLUSIONS 7.01 The project was research oriented. It hias been concluded that the alternatives of smokeless fuel or gasification are not for the time being viable propositions. Other solutions will have to be sought. 7.02 The most promising alternative may be to supply district heating from several combined heat and power stations to be built as part of the power generation expansion program to meet the growing electricity needs of the Ankara region. The stations would be fueled by unprocessed lignite with the emissions to be controlled through high stacks and flue cleaning devices. The Turkish authorities have to decide whether to proceed further with this alternative which needs to be assessed against the alternative of expanding natural gas supplies to Ankara's households. 7.03 For abating the air pollution, the Turkish authorities are undertaking short term measures such as using (i) washed or handpicked lignite; (ii) imported coke or briquettes; and (iii) diesel instead of fuel oil. An educational campaign has also been launched for better insulation of the houses and skilled laborers are being trained to control the performance of the burners of installed boilers. 7.04 The level of air pollution in Ankara remains high despite significant efforts that have been made. A decision has yet to be made as to what measures are to be taken in the intermediate or long term. This is expected to be based on energy planning studies currently under way in consultation with the Bank. 0040W  - 8 - APPENDIX A COMMENTS FROM THE GOVERNMENT MR. CHAFFEY DIVISION CHIEr INTBAFRAD WASHINGTON, D.C. RE: THE LETTER OF MR. Y. WATANABE, DIRECTOR OF OPERATIONS EVALUATION DEPARTMENT DATED OCTOBER 21, 1985 CONCERNING THE PROJECT COMPLETION REPORT ON TURKEY OED NOTES ANKARA POLLUTION CONTROL PROJECT (LOAN S-15-TU) WE APPRECIATE THE EFFORTS GIVEN BY THE BANK IN PREPARING THE REPORT. THE REPORT IS A VERY SUFFICIENT DOCUMENT IN GENERAL. HOWEVER, WE WOULD LIKE TO ADD A FEW POINTS STATED BELOW. 1) (PARA 2.01) THE AMOUNT OF THE S02 SHALL BE READ para. 2.01 AS UG/M3 INSTEAD OF MG/M3 amended. 2) (PARA 2.01) LINE 7 NEEDS TO BE AMENDED AS QUOTE... para. 2.01 EXCEEDED 500 UG/M3 MORE THAN ONCE IN SOME WINTERS amended. UNQUOTE 3) (PARA 3.04) THE LIGNITE WHICH IS DtIED UP AT para. 3.04 SEYITOMER D PLANT DRYING UNIT IS BEING USED FOR THE amended. CEMENT INDUSTRY AND TODAY THE PLANT HAS BEEN IN OPERATION FOR THIS PURPOSE. 4) (PARA 3.07) LINE 19 NEEDS TO BE AMENDED AS QUOTE... para. 3.07 TWO FULLY AUTOMATIC STATIONS REPORTING TO TWO LOCAL amended. CENTERS UNQUOTE. THANK YOU FOR YOUR CLOSE COOPERATION. BEST REGARDS, YALCIN BURCAK DEPUTY DIRECTOR GENERAL OF THE TREASURY November 25, 1985  - 9 - APPENDIX B ZCZC DIST7305 RCA1225 OEDOD REF I TCP D.S. COMMENTS FROM EXECUTING AGENCY 248423 WORLDBANK 44335 TKI TR 11.12.1985 WORLD BANK WASHINGTON D.C. U.S.A 248423 SUB. ANKARA POLLUTION CONTROL PROJECT REF: YOUR TELEX DATED 13 NOV 85 ATTN: MR. Y. WATANABE RESPONDING YOUR RE: TELEX PLEASE BE INFORMED THAT WE HAVE SUBMITTED OUR COMMENTS ON THE SUBJECT TO MINISTRY OF FINANCE UPON THEIR REQUEST WHICH IN DUE COURSE SHALL CONTACT YOUR BANK IN THE NAME OF THE REPUBLIC OF TURKEY FOR SUB. PROJECT HOPING TO HAVE BEEN OF SERVICE IN THIS MATTER WE SEND OUR BEST WISHES REGARDS, TURKISH COAL ENTERPRISES GENERAL MANAGEMENT SALIH DERLER IHSAN SIRIN TAMER HIZAL 38793