India - Sustainable Development in the Singrauli Region : Towards an Action Plan

Document of The World Bank FOR OFFICIAL US ONLY MICROFICHE COPY CONFIDENTIAL Report No. 10634-IN CONFIDENTIAL Report No. 10634-IN Type: (SEC) KENALY, TR/ X80301 / D10051/ SA2IN INDIA: SUSTAINABLE DEVELOPlVENT IN THE SINGRAUL REGION TOWARDS AN ACTION PLAN A DISCUSSION PAPER MAY 15, 1992 INFRASTRUCTURE DIVISION h INDIA DEPARTNENT SOUTH ASIA REGION This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not othervise be disclosed without World Bank authorization. TABLE OF CONTENTS EXECUTIVE SUMMARY ................................................................... i I. OBJECTIVES ......................................................... ........... 1 II. SECTORAL AND REGIONAL CONTEXT 2................................................ 2 Location. ................................................................ 2 Population .............................................................. 2 Settlement Types........................................................ 3 Infrastructure. ............................................t.....0...... 4 Employment.............................................................. 5 Resource Base and Development........................................... 6 National Significance of the Reon7.................................. 7 Development Scenarios.................................................... 7 III. STATUS OF STUDIES AND BANK PROJECTS.......................................... 9 Studies.............................................................. . 9 Completed Studies.................................................. 9 On-going Studies................................................... 12 Proposed Studies................................................... 13 General Conclusions of Studies..................................... 14 Further Work.... ............... ..o....... ........................ 16 Projects................................................................. 16 Completed Projects.... ............................................ 17 On-going Projects.................................................. 18 Proposed Projects................ ................................. 19 IV. ENVIRONMENTAL SETTING......................................................... 20 Air Pollution..... ....... .............................................. 20 Water Pollution........................................ ............... 21 Degradation of Forests.......................... ........................ 22 Agricultural L& nd 2............... ........................................ 22 Land Constraints and Lack of Landuse Planning............................ 23 Infrastructure and Service Deficiencies.................................. 24 Sanitation and Solid Waste Management.................................... 24 Inadequate Resettlement and Rehabilitation Programs...................... 24 Slum Development........................................................ 26 V. KEY ISSUES FOR SUSTAINABLE DEVELOPMENT ........................................ 27 Pace and Nature of Development........................................... 28 Institutional Strengthening.............................................. 28 Financial Management Issues.................... ......................... 32 Employment and Poverty....................................... .......... 33 Pollution Control and Environmental Management.......................... 33 VI. TOWARDS AN ACTION PROGRAM...................................................... 35 Short Term Actions...................................................... 35 Medium Term Actions...................................... ............... 40 VII. NEXT STEPS..................................................................... 43 APPENDICES......................... ................................................ 44 A. DEVELOPMENT OF THE SINGRAULI REGION......... 45 B. EdF SUMMARY TABLES OF ENVIRONMENTAL FACTORS AND MITIGATION MEASURES. 49 C. WORLD BANK PROJECTS IN THE SINGRAULI REGION................................... 66 D. STUDIES OF THE SINGRAULI REGION................................................ 71 EXECUTIVE SUMNARY 1. Objectives. The rapid development of the Singrauli region, based on coal mining and thermal power generation, has created major pressures on the physical and social environment. Unless the environmental prQblems of the region and their underlying causes are addressed promptly, the environmental situation will inevitably worsen as the region further develops to meet India's growing demand for energy. This paper is to serve as a basis for discussion with the Government of India (GOI) on the environmental problems and future sustainable development of the region. It is hoped, through discussions, to reach some common understandings on the development of the region and on the implementation of an action program, which the Bank and other multilateral and bilateral agencies could support. 2. Status of Studies on the Region. The Bank has been directly involved in 8 studies on the region (at a total cost of US$ 4.9 million). One major study - the Electricite de France (EdF) "Environmental Study of the Singrauli Area" - has recently been cpmpleted. The other studies, which have narrower, more focused subjects, are nearing coppletion with the final study expected to be completed by September 1992. Another study of the region - "Singrauli : Regional Development Plan - Phase I1" - has been piepared by the GOI, Town And Country Planning Organization (TCPO). Phase II of this work is to be the preparation of a "Development and Environmental Strategy for the Singrauli Region". Bilateral aid donors are assisting by funding some of this work. The Japanese Grant Fund has supported studies to develop programs of priority environmental actions and the United Kingdom Overseas Development Administration has indicated its interest in funding the preparation of the strategy study. 3. Status of Bank Proiects in the Region. The Bank has been involved in five lending operations in the coal and power sectors totalling approximately US$ 882 million. In addition, it is financing the Uttar Pradesh Urban Development Project (Loan #2797), one component of which provides for investments in urban services of US$ 2.4 million in the Shaktinagar area of the region. There is one power project currently in preparation for Bank financing. It involves the expansion of the Rihand and Vinidhyachal power stations. A number of bilateral aid donors - the United Kingdom, Japan, and the former Soviet Union - have also been involved in financing projects in the region. 4. Environmental Issues. Research on the region has pointed to important problems of pollution of the physical environment as a result of industrial and mining development. These include groundwater contamination, contamination of surface waters near the Kanoria Chemical Plant due to the discharge of mercury and pesticides, ash slurry discharge from the ash ponds into the Rihand reservoir, high levels of dust pollution and critical nitrous oxide levels in certain areas. 5. Research has also emphasized the associated impacts of development on the physical and social environment of the region. These have been caused by population growth, with the large influx of migrants into the region, and the L-settlement and rehabilitation of people moved to satisfy the demand for land by industrial and mining activities. Problems have included unemployment, particularly of the original 'ocal pGpulation, inadequate resettlement and rehabilitation compensation, inadequate housing and the growth of slum settlements, inadequate sanitation and pollution of drinking water sources and degradation of forest resources. These problems have been accentuated by infrastructure and service deficiencies, poor landuse management and inadequ&.e resettlement and rehabilitation policies. 6. Impacts on the social environment and resulting social tensions reflect the dual nature of the economy in Singrauli. Those who enjoy the benefits of permanent employment in the industrial economy (often the better skilled migrants), also generally avail of adequate infrastructure and services since they live in company owned and operated, project townships. Outside of this industrial economy are the rest of the population, many of whom work as casual laborers in the industrial sector. These people (largely oustees,' locals and unskilled migrants) live in areas that are poorly serviced in terms of 1basic facilities, 7. Ke Issues for Snatainabli Develpmen. Development has occurred in a weak institutional context, without planning or coordination of'investment decisions or such decisions reflecting the full cost of the resultant environmental degradation. Landuse management, and environmental controls and their effective enforcement, have been weak. Major issues for the sustainable development of the region include: - the pace of development, which will primarily be dependent on the expansion of coal mining and power generating capacity; - institutional strengthening and the development of effective governance and institutional arrangements; - the strengthening of financial management including the generation of resources to fund the provision, operation and maintenance of necessary infrastructure and services; - the ability of the regional economy to create employment opportunities particularly for the original, agriculturally based inhabitants of the region; and - the establishment of effective environmental management measures whereby appropriate environmental standards are set, outcomes are monitored, and incentives are put in place to encourage compliance or discourage non-compliance. 8. These issues can be addressed through the design and implementation of a sound development process through which the costs and benefits of development decisions including their environmental implications are weighed, competing interests are balanced, priorities are set and decisions taken, resources are collected and allocated, and regulations and standards enforced. In Singrauli, the creation or evolution of such a process is inhibited by institutional weaknesses, including the lack of adequate financial and staffing resources, and by unclear legal and functional jurisdictions between (LLL) the numerous central and state government agencies involved in the region. Jurisdictional questions are complicated by the region falling across the boundary of two States - Uttar Pradesh (U.P.) and Madhya Pradesh (M.P.). 9. The problems of the region underline the need for a development and environmental strategy to guide further development in a sustainable manner. An important focus of such a strategy should be the strengthening of institutions and institutional arrangements. A key lesson of development in the region to date is that the pace of development should not exceed the capacity of the development process and institutional arrangements to successfully accommodate growth. Existing problems are the direct result of this occurring. The conclusions of research on the region imply that the pace of further development should be commensurate with the capacity of the development process to establish and enforce appropriate environmental protection measures, to adopt and monitor environmental standards and regulations, and to undertake broader management of the physical.and social environment, embracing such issues as land and watershed management, resettlement practices and infrastructure and ser*ices provision. 10. Although the EdF study concluded that the direct problems of mining and industrial pollution are less critical than originally expected and that the further development of these operations can be accommodated with the introduction of standard environmental protection measures and the better operation and maintenance of facilities, arrangements for the control of industrial pollution remain an important issue. Overall, it is difficult to be sanguine about the institutional capacity of authorities in the region to apply and enforce environmental protection measures or to better operate and maintain industrial facilities. For this to occur in practice will require major strengthening of institutions in the region, in conj-.nction with the introduction of improved technologies. 11. Devlopment and Environmental Strategy for the Region. The preparation of a development and environmental strategy for the Singrauli region is necessary to give direction to the GOI's and the two State Government's future investments in the region. A strategy is required to bring the complex array of development, environmental and institutional issues in the region into focus, to define the broad directions development should take if it is to be environmentally sustainable and incorporate acceptable environmental standards, and to define a development process by which decisions on the future development of the region over the longer term can be taken. In the preparation of such a strategy, it will also be possible to identify and prepare high priority infrastructure and services investments for implementation and to identify options for strengthening institutional capacity. 12. Action Program in the Short and Medium Tevms. The problems associated with development to date and the prospect of further development over the short to medium term, require that actions be taken now both to rectify existing problems and to ensure further development occurs in an environmentally sustainable manner. Details of actions proposed for the short and medium terms are in Chapter VI. (iv) 13. In the short ter actio;:s Lhould be aimed at alleviating, where possible, existing critical environmental and social concerns and should also aim to contain the pace of regional development to a level able to be accommodated by an e-rolving development process without undue strain. Short term interventions might be made in such areas as pollution control, watershed protection, and the prov4.sion of critically needed urban infrastructure and basic services. The following actions would help address the immeciate problems of the Singrauli region. * Prompt preparation and implementation by each agency in the coal, power and industrial sectors of "priority environmental actions" for addressing pollution problems identified in the EdF "Environmental Study of the Singrauli Area" and the environmental feasibility studies which are nearing completion. - Selective interventions to address other critical environmental and social concerns identified in the EdF and TCPO studies and in the Area Reforestation and"Watershed Protection Study which is nearing completion. - Proposed new investments - such as the National Thermal Power Corporation (NTPC) power generation project which is being prepared for Bank financing - should be subject to detailed environmental assessment as an integral part of project design, embracing both the direct effects of the proposed investment on the physical environment and its impact on the broader social environment. For such proposals to proceed, they should include a program of priority environmental actions to address any negative environmental impacts and to strengthen the environmental management capacity of the organization. They should also encompass any actions necessary to address environmental problems resulting from previous or on-going operations of the agency on the region. 14. Over the medium term, but siarting immediately, actions should be directed at fostering a development process which meets GOI's laudable environmental standards and at supporting investments and institutional strengthening compatible with these standards. The GOI and the two State Governments could pursue the following actions over the medium term: - the strengthening of regional institutions and regional coordination arrangements; - the completion of the proposed "Development and Environmental Strategy for the Singrauli Region"; - implementation of the strategy along with processes for its on- going monitoring and review; - the development and implementation of the priority social infrastructure and other environmental enhancement investments (v) identified in the strategy study, possibly through a Bank financed Singrauli regional infrastructure project; - the development and implementation of further investments in the coal, power and other sectors in the region which are compatible with the strategy and satisfy the requirements of detailed environmental assessment. 15. Next Stepr. The next step is to discuss this paper with the GOI in late May or early June. TKANALEY\CsWP51\SINGRAULl3EXESUM3.SDP MAY 15, 1992 I. OBJECTIVES 1.01 This paper is intended to serve as a basis for discussion with the Government of India (GOI) on the problems and future sustainable development of the Singrauli region.1 1.02 The paper summarizas key environmental and development issues in the region and points to the need for a development strategy and the implementation of an action program for the Singrauli region. It drawr on recent studies (completed and ongoing) as well as experience from the Bank's involvement in investment r.,jects (mainly thermal power and coal) in the region. The approach adopted recognizes that in order to address the complex rang3 of environme...al and developmental issues in the region, a multi- sectoral and inter-disciplinary approach is required. 1.03 An action program is proposed for the future involvement of the GOI and the State Governments of Uttar Pradesh U.P.) and Madhya Pradesh (M.P.) in the regidn.over the short and medium terms. The assistance of bilateral and multilateral,agencies, such as the*Bank, will be necessary to suppoft the timely and effective implementation of such i-program. An*action program is necessary to address the iide diversity of issues that are threatening the sustainable development of the region. A continuation of exl-.ing practices will inevitably see a worsening of environmental problems with implications both for the welfare of the region's residents and the productivity of the region's industrial base. 1.04 It is hoped through discussions with the GOI to arrive at some common understandings on the development of the region and to define and implement an action program for the region for the short and medium terms. 1.05 Efforts to address the problems of the Singrauli region will depend on the actions of the GOI and its agencies and of the State Governments of U.P. and M.P.. The Bank hopes to be of assistance in these efforts. To this end, it has financed the "Environmental Study of the Singrauli Area" unde:taken by Electricite de France (EdF) and actively participated in the preparation of the "Singrauli : Regional Development Plan - Phase I" undertaken by the Town and Country Planning Organization (TCPO) of the GOI Ministry of Urban Development (MUD). These are the two main studies completed on the region to date and the source of most of the information referred to in this paper. Bilateral aid donors also are interested in assisting the sustainable development of the region. The Japanese Grant Fund has supported studies to define specific environmental mitigation measures and the United Kingdom Overseas Development Administration has indicated its interest in funding the preparation of a Development and Environmental Strategy for the Singrauli Region. 1 This paper was written by Trevor Kanaley (SA2IN) and Anita Nirody (Consultant). Major contributicns were made by Thomas Blinkhorn (SA2DR), Donald Brown (ASTIF), John Courtney (INURD), and Argun Ceyhan (SA2EG). 2 I. SECTORAL AND REGIONAL CONTEXT Location 2.01 The Singrauli region is located in an isolnted, topographically rugged area on the border ol the states of U.P and M.P. in Nortbrn India. (Figure 2.1) 2.02 - Prior to industrial development in the 1960s, Singrault was relatively sparsely populated ant agriculture was the dominant lar The construction of a reservoir on the Rihand River by the Uttar Pradesh .ate Electricity Board (UPSEB) in 1960-1961 for hydro-electric power generation and the discovery of major coal reserves, provided the impetus for industrial deNelopment in the region. Six thermal power plants, two hydro-electric power plants, coal mines and related industries have now been established. The region hs.a whole is still predominantly agricultural with rapid urbanization, .41 high populationdensities, mining and industrial activity concentrated in pockets around the Rih#nd reservoir. Covering an area of 470 km2, the reservoir is the major so.irce of water for industrial consumption. 2.03 The current operational definition of the Singrauli "region" has been established by the TCPO. It defined a planning area of 3,131 km2 around the Rihand reservoir. A smaller sub-set of this region was used by the consultant's EdF in their "Environmental Study of the Singrauli Area," commissioned by the National Thermal Power Corporation (NTPC). EdF confined its study to a "core area" of 2,180 km2 located in a 15 km band around the reservoir where industrial and coal mining activities are concentrated. Any reference to the Singrauli "region" in this paper denotes the TCPO planning area; any reference to the "core area" is to the EdF area of analysis. PoRulation 2.04 The TCPO has estimated that population in the Singrauli region increased at an average annual rate of 9.9% from 234,000 in 1971 to 696,000 in 1991.1 If this growth rate is maintained, the TCPO estimates the region's population will increase to around 1.4 million by 2001 (Table Al, Appendix A). Population growth is primarily due to migration from outside the region (Punjab, Delhi, Bengal), and is heavily concentrated in the core area of rapid industrial expansion. TCPO estimates that about one-third of the present population in the region are migrants. The migrants fall into three main groups: permanent employees in the power plants and industrial and services sectors, contract laborera brought into the region for construction activities (often living in labor camps), and others who often establish small trading activities or seek employment as day labor. The latter tend to live in shanty towns. Literacy rates in the region are low. TCPO estimates about 15% of the population in the region are literate compared to 43 percent for India as a whole. 1 Population estimates are based on the 1981 census. Details of the 1991 census data on Singrauli are not available. 3 Figure 2.1: The Singrauli Region ,-l" Pradesh . - AND vlsnno- Madhya Pradesh . I ---...- Singrauli Region Boundary (TCPO) - - - Core Area Boundary (EdF) State Boundary Power Plants/Project Townships Ocher Urban Towns Main Industrial Areas JAW Main Coal Mining Area 5 0 5 10 15 ka Settlement Types 2.05 The types of settlement in the Singrauli region reflect the dual economy and the imposition of industrial activities and townships on a relatively backward and isolated agricultural region. 4 2.06 The region contains the illowing main settlement types: (1) 401 mainly rural villages; (2) two urban areas, Renukoot and Pipri, near the eastern shore of the reservoir;2 (3) 19 "project" townships that have been develolped by the power, mining and industrial operations in the last two decades to support their activities; (4) resettlement colonies that were established for those displaced by the Rihand reservoir and industrial, power, and mining activities; (5) shanty towns and; (6) labor camps comprising makeshift housing arrangement.i for casual laborers employed in the power plants and coal mines. 2.07 Information on the size and populatfi. characteristics of these settlements is not available, although it is estimated by the TCPO that about 35% of the population in the region live in the proje7t townships. Infrastructure 2.08 Transport and communications infrastructure in the region is poorly developed. The regional road network is sparse though well maintained. It is used aeavily by coal and other industrial transport vehicles. There are six railway stations in the region one of which (located in Renukoot, see Figure 2.1) has an indirect connection to major cities. Varanasi is the major city near the region. It is located 250 km away or about five hours away by road. There is one private airstrip (for the aluminum plant). The topography is rugged and makes express connections difficult; telephone connections are very poor. 2.09 The availability and standard of social infrastructure - drinking water supplies, sanitation facilities, housing, schools, medical facilities - in the region varies widely. The project townships are relatively well serviced with the provision and operation and maintenance of facilities undertaken by the organizations establishing the townships. The remaining settlements are poorly serviced. The institutional base has not been 2 The 1991 census defines urban areas as follows: a) all places with , municipality, corporation, cantonment board or notified town area committee; b) all other places that satisfy the following criteria: minimum population of 5%00; at least 75 percent of the male working population engaged in non-agricultural activities; a density of at least 400 persons per km2. According to the census, those areas that do not satisfy the above conditions are treated as rural, and the smallest area of rural habitatian is normally called a village 5 established t.*- finance, construct and maintain such services. Infrastructure deficiencies are a major problem for those living outside the project townsips. Emoloyment 2.10 Employment is an important issue in Singrauli and particularly for the original inhabitants of the region. With low literacy levels and poor skills, these people are often ill-enuipped to work as permanent employees in the industrial sector and often work as casual laborers. However, the number of unskilled jobs is limited. Some migrants, on the other hand, are better educated and skilled than their local counterparts and can compete more successfully for permanent jobs in the industrial and associated commercial sectors. The Edf study estimates that only 20 percent of the permanent jobs in the core area go to locals. They maintain that the quasi-saturation of the labor market underscores the need to explore the employment potential of agriculture. The study indicates that if small scale irrigation is made more . systematic itthe fertile Waidhan plain (M.P.), it would be possible to create 20,000 additional jobs, that is equivalent to the potential employment of 10 power stations. Presently, relations between the miorants and locals is antagonistic and is likely to deteriorat;4 in the future with the increase in the number of migrants in the region. This friction is further emphasized by the higher standard of infrastructure and service provision in the project townships with their large migrant population and by the inadequate policies which have governed resettlement and rehabilitation - policies which mainly affected the original inhabitants of the region. 2.11 Approximately 12 percent of the region's active population are employed in coal mines, power plants and large and medium industries (Table 2.1). Agriculture, small trading activities and day labor are the primary occupation for the remaining 88 percent. Table 2.1: Employmnt i Industrlee, Power Plants aid Coal Mine i the Singrauli Region Employem Employees % of total (# of poreone) Industries 9,288 28 Thermal Power Plante 9,716 30 Coal Mines 13,935 42 Tt2M 100 * Total Population (1990): 696,000 Active Population (1990): 280,000 Sosoe Adapted from TCPO Report, September 1990 2.12 Differentials in infrastructure and employment provision in the region directly reflect the dual nature of the economy in Singrauli. Those who enjoy the benefits .f permanent employment in the industrial/modern economy (mostly the migrants), also generally avail of adequate infrastructure and services since they live in project townships. Outside of this 6 modern/industrial economy are the rest of the population, many of whom work as casual laborers in the industrial sector. These people (largely locals and oustees) live outside the project townships and in areas that are poorly serviced in terms of basic facilities - drinking water supplies, sanitation, schools and housing. Attempts at job-training programs for these people (such as NTPC's recent attempts at training for employees of the Vindhyachal Super Thermal Power Plant) have largely been ad-hoc and unsuccessful. Resource Base and Development 2.13 The development of the Singrauli region has been based on the availability of abundant supplies of water and coal. 2.14 Singrauli contains the largest coal depostts in India, with total coal reserves estimated at 10,850 million tons in 1990' enough to fulfill fuel requirements t> generate 20,000 4W of electricity for.the next 130 years.3 The construction of the Rihand reservoir has created a reliable supply of fiesh water. The combination of these resources has provided the basis for the development of thermal power plants wh'h in turn have attracted other related industries and commercial activity. There are six thermal power plants on the shores of the Rihand reservnir and two hydro power plants, with a total installed capacity of 6760 MW in 1990. Coal for all thermal power projects in the region is met by the Singrauli coalfields. Coal is also exported to other parts of the country. 2.15 A number of ancIllary large, medium and small scale industries with linkages to the coal and power sectors have been established in the region over the last few decades. Large power-based industries include: the Hindalco aluminum plant (established in 1962); two chemical plants, Kanoria Chemicals (established in 1964), that produces chlorine, caustic soda, fertilizers and pesticides and Hi-Tech Carbon, that produces carbon black; and the Dala cement factory near the Obra reservoir. Other industries which have located in the region include handlooms, oil mills, flour mills, and khadi (spun cotton) units. 2.16 There has been no detailed analysis undertaken of the economy of the Singrauli region or of the linkages both within the regional economy and to the wider Indian economy. It is clear, nevertheless, that the rate of migration and population growth, infrastructure demands and the expansion of the regional economy will be dependent on the level and timing of future investments in the coal and power sectors in the region. 2.17 The rapid development of the region to date has been based on individual investment decisions to exploit the rich resource base. The organizations making these investment decisions have paid little attention to the wider social and envirunmental implications of their decisions and there have not been the government and institutional arrangements in place to ensure wider development and environmental implications are adequately accommodated. As a result, a range of environmental and socio-economic problems are apparent 3 TCPO study estimate 7 in the region, including air and water pollution, deforestation, competition for scarce land, displacement of people to satisfy the increasing demand for land by industrial and mining activities, infrastructure and service deficiencies, and population unrest due to unemployment and forced involuntary displacements. These problems underlie the need for a development and environmental strategy and associated management arrangements to guide the further development of the region in a sustainable manner. National Significance of the Region 2.18 The Singrauli region is important for national economic development. One of the largest coalfields in India is located in the region and development of this resource is still only in its initial phase. Coal is being mined for thermal power generation at stations within the region. It is also being supplied to thermal power stations outside the region, primarily to Kota in the state of, Rajasthan and to other Thermal Power Plants in western India. Singrauli currently has installed generating capacity of 6760 MW and accounts f6r approximately 11 percent of the total operating electricity generation capacity in the country. 'Electricity from Singrauli is supplied primarily to the Northern Region in India consisting of the states of Punjab, Haryana, Jammu & Kashmir, Rajasthan, Himachal Pradesh and Delhi. The region provides an essential input to the development process in these states. 2.19 Looking to the future, the further development of the region's resources appears inevitable. Over the past two decades, the consumption of electricity in India has grown approximately twice as fast as total commercial energy consumption from all sources and now accounts for more than 30 percent of the latter. Nevertheless, shortages have prevailed throughout the country and averaged an estimated 13 percent of electricity requirements. The GOI's strategy for meeting the future demand for power has involved an accelerated program for the development of coal-fired thermal plants, particularly those that can be installed near or at open pit mines. The fact that coal reserves in Singrauli can fuel a substantially larger generating capacity than presently installed combined with the high demand for electric power in India have led to increasing pressure for further expansion and development of the area. Projects totalling 3750 MW of new capacity (45 percent increase) have already been proposed. One project is currently in preparation for Bank financing involving the expansion of the Rihand and Vindhyachal power stations. Development Scenarios 2.20 EdF his analyzed three development scenarios for the region based on different levels of energy production:' I Developed by EdF in their "Environmental Study of the Singrauli Area." Their area of analysis is the "core area," and hence population figures are smaller than the TCPO definition of the region. 8 *Scenario 1 is the current situation where power generating capacity, industrial production and coal production are placed at 1990 levels. In the current scenario, total generating capacity stands at 6760 MW. Under the current scenario, the population stands at 450,000 in the core area. * Scenario 2 is one of intermediate capacity growth under which power projects that are already in or near the construction phase would be implemented. This scenario is the most likely in the short to medium term and assumes the addition of 3750 MW of generating capacity to the existing capacity of 6760 MW. Total operating capacity under this scenario would be 10510 MW. In this scenario, the population will increase by 78 percent to 800,000 persons in the core area. * Scenario 3 or that of maximum capacity growth is a longer-term scenario that assumes very large additions to existing capacity. Total operating capacity under this scenario would be 18500 MW. Under maximum capacity growth, the populated is expected to increase by a further 25 percent to reach 1 Million in the core area. 2.21 EdF concluded that the drect environmental impact of further development of coal resources and thermal power stations would be limited in Scenario 2 and marginally increase in Scenario 3 if standard environmental protection measures are introduced and with the better operation and maintenance of facilities. Nevertheless, the study also points to significant environmental problems in the region in the current and future scenarios. These include dust pollution and critical nitrous oxide levels, groundwater contamination, surface water pollution due to industrial effluents, such as from mercury released by the Kanoria Chemical Plant, from overburden dumps in the mining areas, and from ash slurry discharge from the ash ponds into the reservoir. The study emphasizes that the indirect environmental impacts of development (e.g on landuse, socio-economic problems) would be considerable. Under scenarios 2 and 3, pressure on land is expected to increase with the influx of migrants due to accelerated construction and industrial activities. Since people are likely to be displaced by future industrial activity, resettlement and rehabilitation will remain a major issue. Relations between migrants and locals are also likely to worsen as competition for jobs increases. The EdF study highlights the need for point-source environmental protection measures. As importantly, it draws attention to the effects of further development on the broader social and physical environment and to the need for increased employment opportunities in agriculture, effective development and environmental strategies and associated institutional and management measures if the region is to develop in a sustainable manner. 2.22 The following section (Section III) summarizes the status of studies (completed, on-going and proposed). The environmental setting (Section IV) emerges from the conclusions of these studies. 9 III. STATUS OF STUDIES AND BANK PROJECTS STUIES 3.01 While there are many gaps to be filled, the information base on Singrauli and on the relationship between development in the region and the environment has slowly expanded over the past few years. This period has seen a number of studies on the region or aspects of its development undertaken. Throughout this report, where references are made to developments in the region, the source of information is these studies. 3.02 The Bank has financed, been the executing agency or directly undertaken 8 studies on the region over this period that are in various stages of completion. One major study - the EdF "Environmental Study of the Singrauli Area" - has'recently been completed. All of the other studies are nearing completion with the final study expected to be completed by September 1992. The total cost of these studies is estimated at US$ 4..9 million. ' Another study of the region - "Singrauli : Regional Development Plan - Phase I" -has beed prepared by the TCPO, Government of India. A further study is proposed to follow-on this TCPO work and prepare a "Development and Environmental Strategy for the Singrauli Region". In addition to the above, three background papers synthesizing information based on existing studies have also been prepared by the Bank. A summary of the status of studies on Singrauli is at Table 3.1. 3.03 This section will very briefly summarize the status of studies on Singrauli. Further details may be found in Appendix D. The section will also provide some general comments on what additional work is necessary to fill gaps in our understanding of the region and to facilitate actions to address the problems of the region. Completed Studies * Environmental Study of the Singrauli Area (Cost US$ 4.5 million) 3.04 This study was initiated in May 1988 by the National Thermal Power Corporation (NTPC), (a GOI enterprise responsible for thermal power generation) and undertaken by a joint partnership of the French companies EdF and Charbonnages de France (CdF), with work subcontracted to various partners in India. The study was financed from the proceeds of a World Bank loan under the Singrauli Super Thermal Power Project (Credit 1027-IN). It was completed in March, 1992. 3.05 The principal objective of the study was to identify the environmental impacts of the development of the region under three energy scenarios (current, medium-term and long-term). Alternative means of mitigating environmental impacts were examined. The study zone was defined as a 15 km band around the Rihand reservoir comprising the main industrial and mining areas. 10 Table &1: Staus of Studies on Singrau 1am Studies World Bark 0Cst (US$) Funding Completion Date Responsbilly Sponesr Source A. Studio Comp I Environmental Study (EdF) SA2EG NTPC 4,500,000 World Bank March 1992 (IDA credit 1027-IN) li Regional Development Study (TCPO) NONE MUD not available MUD/GOI Sept1990 (Draft) B. Backaround Papers Caoleled JGF/INURD January 1992 I Environmenti Profile & Questionnare INURD NONE 13,400 JGF August 1991 II Soolo Economic Issues Paper INURD NONE 3,300 JGF August 1991 Il Summary of EdF Report INURD NONE 3,300 TOTAL 4,520, 000 C. Studies Ongoing I Cement Industry Pollution Control ASTIF NONE 16,800 JGF May 1992 II ReforestationWatershed Protection SA20R NONE 30,000 JGF May 1992 1i Reclamation of Coal/Flyash/Red Mud ASTIF NONE 250,000 JGF May 1992 Iv Air pollution from Power Plants ASTIF NONE 40,000 JGF June 1992 v industr.Poll. Control for Specific Factories ASTIF NONE 18,200 JGF May 1992 vi Resettlement Study INURD/SA2DR NONE 15,000 JGF May 1992 vil Institutionall/Administrative Optiona SA2DR NONE 30,000 JGF September 1992 TOTAL * 400,000 _ _ D. Studies Pped I Dev. & Env.Regional Planning Study SA21N iUD 1,000,000 ODA Early 1994 (U.K) (estimated) (proposed) GRAND TOTAL- 5,920,000 Abbreviatlon ASTIF (Asia Technical Industry and Finance Division); EdF (Electricite do France): GOI (Government of India); INURD (Urban Development Division); JGF (Japan Grant Fund); MUD (Ministry of Urbr i Development ODA (Overseas Development Administration); SA2DR (India Department, Office of the Director); SA2EG (India Department, Energy Division); SA21N (India Department, Infrastructure Division); TCPO (rown and Country Planning Organization). 11 3.06 The study pointed to some important problems of pollution of the physical environment as a result of development. These include groundwater contamination, contamination of surface waters near the Kanoria Chemical Plant due to the discharge of mercury and pesticides, ash slurry discharge from the ash ponds into the Rihand reservoir, high levels of dust pollution and critical nitrous oxide levels in certain areas. Nevertheless, the general conclusion of this research is that the direct physical environmental impacts of development are less critical than originally expected and that, with standard environmental protection measures and better operation and maintenance of industrial facilities, the further development of the region's resources can be successfully accommodated. However, it is difficult to be sanguine about the institutional capacity of authorities in the region to apply and enforce environmental protection measures or to better maintain industrial facilities. For this to occur in practice would require major strengthening of institutions in the region, in conjunction with the introduction of improved technologies. In the case of environmental protection, monitoring and enforcement mechanisms are weak. Enhancing environmental monitoring and enforcement capabilities is a key issue to be addressed if environmental quality is to be improved. 3.07 The study also emphasized the associated impacts of development on the environment - population growth, unemployment particularly of the original local population, infrastructure and service deficiencies, resettlement and rehabilitation issues, land constraints and lack of land use planning and management issues. It concluded problems in these areas are more critical than direct industrial pollution. These problems stem from the absence of effective regional government and administration, institutional weaknesses and from inadequate land use planning and land management. * Singrauli : Regional Development Plan - Phase I 3.08 This study was prepared by the TCPO of the Ministry of Urban Development (MUD), Government of India and completed in March, 1991. The Bank has been indirectly involved in this study providing comments on the terms of reference and the draft report. In consultation with the Bank, it was always envisaged that this work would form the basis for a follow-on study to prepare a "Development and Environmental Strategy for the Sing.auli Region" (this proposed strategy study is discussed later in this section). 3.09 The main objective of this study was the preparation of a draft regional land use plan. The study provides a compendium of information on the region, assesses the current state of development in the region and its impact on various sectors, and identifies several critical development zones and priorities for investment, especially with regard to land constraints and social infrastructure requirements. 3.10 The study forms a useful basis for the preparation of the development and environmental strategy for the Singrauli region. While it tends to be static and does not analyze development options, governance and administration issues or financing options, such matters are to be included in the proposed strategy study. 12 * Norld Bank. Urban DeveloRment Division Background Papers 3.11 The Urban Development Division at the Bank has completed the following three background papers on Singrauli for the urban environment program. This work consolidates and draws some general conclusions from the results of existing studies on the region. - Environmental Profile of the Singrauli Region and an Urban Environmental Indicators Questionnaire on the Region (Cost US$ 13,400) - A background paper summarizing the EdF Socio Economic Report (Chapter 3 of the EdF Study) (Cost US$ 3,300) - A background Socio Economic Issues Paper on the Singrauli Region (Cost US$ 3,300) On-oing Studies 3.12 Two sets of activities financed by the Japan Grant Fund are being undertaken. -The first is a set of four environment feasibility studies that attempt to address point source pollution problems in the short-term. The second set of three studies looks at some broader institutional and socio- economic issues. Environment Feasibility Studies 3.13 Four environmental feasibility studies are currently nearing completion. They are noted below. The studies are to define specific environmental mitigation measures. The total cost of these studies is approximately, US$ 325,000. The studies are being managed by the World Bank and undertaken by consultants. Each of the studies includes a review of performance and a feasibility study of corrective action. * Air Pollution from Thermal Power Plants (Estimated Completion June 1992; Consultants: Tata Energy Research Institute, Delhi. Cost US$ 40,000) * Industrial Pollution Control for Specific Factories (Estimated Completion May 1992, Consultants: Shriram Engineering. Delhi. Cost US$ 18,200) * Cement Industry Pollution Control (Estimated Completion May 1992. Consultants: Holtec Engineering. Cost USS 16.800) * Reclamation/Reforestation of Coal. Fly Ash and Re: lud (Estimated Coamletion May 1992. Consultants: Bromwell and Carrier Inc.. USA. Cost US$.250,000) Institutional and Socio-Economic Studies 3.14 The second set of studies financed by the Japan Grant Fund focus on broader aspects of development in the region. * Area Reforestation and Watershed Protection (Estimated Completion May 1992, Consultants: 3 local, one international. Cost USS 30,000) 13 * A Study on Urban Relocation and Rehabilitation Issues (Estimated Completion May 1992. Consultants: 1 international. 2 local. Estimated cost US$ 15.000) * A Background PaDer on Institutional and Administrative Otions for the Singrauli Region (Estimated Completion September 1992. Consultants: 1 international. Estimated cost US . 30.000) 3.15 The Reforestation and Watershed Protection study assesses the scale of the deforestation/watershed degradation problem in the Singrauli region, and makes recommendations for dealing with the problems in a more effective, sustainable manner. Special attention is given to social, watershed/forestry and institutional aspects. The relocation and rehabilitation study examines how the issues of shelter, employment and local participation interact at the community level by examining two relocation settlements in Singrauli. The paper on institutional and administrative options for the region is to'define and analyze the advantages and disadvantages of 'various possible forms of administration of the region taking into consideration the wide range of central and state government organizations with an interest in the region, the cross-state-border boundaries of the region and the need for local participation in decision making. In considering possible forms of administration, this paper will examine the institutional arrangements adopted in analogous regions in other federal systems of government. Proposed Studies * A Develooment and Environmental Strategy Study for the Singrauli Region 3.16 As noted above, this study is proposed to follow-on the TCPO regional development study. The principal purposes of the study are: (a) to prepare a development strategy for the Singrauli region which is environmentally sustainable and incorporates acceptable environmental standards; (b) to make recommendations on infrastructure and services requirements and on arrangements for their financing and operation and maintenance; S (c) to identify and undertake initial preparation of high priority infrastructure and services projects suitable for financing by domestic and international development assistance agencies; (d) to make recommendations on strengthening administrative and financing arrangements for the region and on processes for the on- going implementation, monitoring and review of the strategy; (e) to identify and, where possible, reconcile different development priorities through the use of an open planning process that encourages the active participation of all parties with an interest in the region's future. 14 3.17 The terms of reference for this study have now been agreed with the GOI and it is anticipated this work will proceed in the second half of 1992 using foreign and local consultants at an estimated cost of US$ 1.0 million. It is expected this study will be funded by the United Kingdom Overseas Development Administration. The Ministry of Urban Development is to be the client for this work and the Bank the executing agency. General Conclusions of the Studies 3.18 Research on the region and particularly the EdF and TCPO studies - the main studies completed to date - have reached the following main conclusions. i) Pollution of the physical envtronment is a major problem in.such areas as groundwater contamination, contamination of surface water near the Kanoria Chemical Plant due to the discharge of mercury and pesticides, ash slurry discharge from the ash ponds into the Rihand reservoir, high levelA of dust pollution and criticaX nitrous oxide levels in certain areas. ii) Problems associated with direct degradation of the physical environment from point source pollution should be manageable in the future if the coal mining and power operations and other - industries adopt standard environmental protection measures and improve the operation and maintenance of facilities. However, the introduction, monitoring and enforcement of such measures will require major institutional strengthening. iii) The development of the region is resulting in serious problems of degradation of the broader physical and social environment and these problems will become critical with further growth if the present ad hoc development process continues. These problems are related to population growth through migration, pressures on forest and agricultural land, inadequate rehabilitation and resettlement practices, the very limited availability of employment opportunities, and infrastructure and service deficiencies including access to potable water and environmental sanitation facilities. To address these issues requires developmert and environmental strategies and effective regional government and institutional arrangehments. iv) There is inadequate provision of basic infrastructure and services in the region. Roughly 65% of the population (primarily those living in villages, resettlement colonies, shanty towns and labor camps) do not have adequate access to basic infrastructure and services. v) Migration into the region has occurred at a rapid pace; it is expected to continue with additional industrial activities planned for the future. 15 vi) Resettlement programs for people displaced by industrial and power activities have not been successful. Problems have centered on compensation; the provision of alternative employment opportunities; and the provision of shelter with adequate access to basic infrastructure and services. These shortcomings need to be redressed and future resettlement undertaken through a more organized process that better accommodates the views of those directly affected. vii) There is an inevitable conflict between traditional land use practices and the development of industzial areas. This is exacerbated in Singrauli by the absence of sound land management policies and practices. viii) Institutional weaknesses and unclear jurisdictions across state boundaries and between organizations are major constraints to effective regional and en*ironmental management. 3.19 Nevertheless, while knowledge of the region's problems Has improved, the studies provide little guidance on how these problems might be systematically addressed. The EdF study, for example, after a detailed data- gathering exercise concludes its analysis at a very general level by stating that environmental protection measures and associated management issues will have to be addressed to resolve the problems of the region. However the study does not indicate in detail how these changes might be operationalized and implemented. In the case of the four environmental feasibility studies funded by the Japan Grant Fund, final reports are under preparation. On the basis of draft reports received to date, it appears that these reports have further increased the information base on the reginn but vary widely in the quality of their analysis and conclusions. They d not, as yet, provide the intended clear insights into addressing point source pollution problems envisaged in their terms of reference. These problems are to be corrected in the final reports. 3.20 The TCPO study and the proposed Development and Environmental Strategy Study are intended to provide operational recommendations. The intended outcomes of this work are recommendations for a development and environmental strategy for the region, for specific investments in infrastructure and services prioritized according to their importance, and for strengthening regional administration and institutions. It is also intended that this work address the issue of the process for guiding regional development and environmental management. The TCPO study was a first stage in this work. While it has weaknesses and omissions, it provides a useful basis for moving onto the more detailed work envisaged in the proposed second phase - the Development and Environmental Strategy Study. The strategy study will draw heavily on the information, recommendations and action programs from other studies on the region. 16 Further Work 3.21 There are some important gaps in our understanding of the region and the linkages between development and the physical and social environment. These include: i) the dynamics of the regional economy and the linkages between investments in the mining and power sectors and migration and employment, and infrastructure and service requirements; Li) demographic data and projections based on the 1991 census; iii) the identification of the prospective level and timing of future investments in the region in the short and medium term; iv) the identification of the location, scale and types of infrastructure and service deficiencies.in the reglon and the priorities foritheir provision; and v) the analysis of governance and management arrangements, including for environmental monitoring and managemant and for the financing of infrastructure and services, and how they might be strengthened. 3.22 The Development and Environmental Strategy Study will address these issues. PROJECTS 3.23 The Bank Group's involvement in the development of the Singrauli area consists of five lending operations in the coal and power sector involving loans totalling approximately US$ 882 million. In addition, the Bank has agreed to provide financing (2.4 million) for urban infrastructure and services in one area town (Shaktinagar) under the Uttar Pradesh Urban Development Project. A summary of the Bank's involvement in projects in the region is at Table 3.2. One power project, which includes among other investments, the expansion of the Rihand and Vindhyachal Power Plants is currently in the Bank's project pipeline (FY 1993) with an estimated loan of US$ 400 million. It is also possible that pollution mitigation in Singrauli could be financed from the on-going India Industrial Pollution Control Project (Loan 3334-IN, US$ 124.0 million, estimated closing date December 1997). This project supports GOI's efforts in identifying and implementing a cost- effective program for industrial pollution monitoring, control and abatement. 3.24 In addition to the Bank Group, bilateral organizations have also financed thermal power and coal projects in the region. The Rihand Thermal Power Plant and Amlohri coal projects were financed by the U.K., Vindhyachal Thermal Power Plant by the former Soviet Union, and Anpara B (extension to the existing State power plant) by Japan. .17 Table 32 Wodd Bank Irwolves nin Projea i t Singraull Regin 1. PAEC mdoan Ee App-al -oplet amount (S to de date dae millio1n) I Singraull Themal Power Plant (credit 685-IN) 1t0.0 150.0 April 1977 June 1984 II Singraull Thermal Power II (credit 10274N) 300.0 300.0 May 1980 June 1989 III Rihand Power Transmialon (loan 2555-IN) 202.0 191.5 May 1985 Dec.1992 (et.) Iv Dudhichue Coal Project (loan 2393-IN) 109.0 90.0 May 1984 March 1993 (eat) v UP Urban Dev.Project (Shaktinagar component 2.4 0.0 Feb.1984 March 1995 loan 2787-IN (ee.) vi UP Power Projects (Obra component, Loan 2957 31.1 47.1 (for the June 1988 suspended *IN) whole project) TOrAL 884.5 Completed Bank Proiects I * Singrauli Thermal Power Project (Credit 685-IN. approved April 1977, completed June 1984, USS 150 million) 3.25 The central objectives of this project were to assist in the institutional strengthening of NTPC and the construction of three turbo generating units for the first thermal power plant in Singrauli. The Project Completion Report indicates that the it was executed satisfactorily. While no ecological problems were envisaged during its initiation, a number of people initially displaced during the construction of the Rihand reservoir, were displaced for the second time due to land acquisition under the project. Most property owners were fairly compensated but people without land seem to have been adversely affected. The resettlement and rehabilitation colonies established still lack many basic facilities and alternative employment opportunities for those affected remains a problem. * Second Singrauli Thermal Power Project (Credit 1027-IN approved May 1980. completed June 1989. US$ 300 million)) 3.26 This project consisted of the installation of two 200 MW and two 500 MW thermal power generating units and associated transmission facilities. The project was designed to comply with the applicable environmental quality standards prevalent in India at that time. In this project, 1901 hectares of land were acquired affecting 15 villages. Compensation was given to 1,450 families and a limited number of project affected persons were given on-the- job training by NTPC. However, no alternative employment opportunities ;;ere found for a number of project affected persons because of their low level of skills. 18 On-goin Bank Proiects * Riband P(ver Transmission ProJect (Loan 2555-IN anoroved May 1985. estimated completion December 1992. US$ 202 million) 3.27 The objectives of the project are to continue with the institutional building of NTPC and the Central Environment Authority (CEA), and to assist NTPC in meeting the electricity demand in the Northern Region by providing a linkage between the Singrauli and Rihand thermal power plants and the main load centers in the region. The project is currently under construction and no significant ecoLogical or resettlement problems have been identified. * Dudhichua Co&l Proiect.(Loan 2353 - IN anoroved May 1984. estimated completion March 1993. USS 109 million) 3.28 The project consists of construction and start-up facilities for an open-pit mine in the Singrauli coalfield. The project will also support institutional development of Coal India Limited in open-pit mining procedures, project management, budgeting and cost control. Air pollution caused by dust is the main environmental hazard in this project. * Uttar Pradesh Urban Develooment Project - Shaktinagar Component (Loan 2797-IN approved February 1984. estimated completion March 1995. USS 2.4 million out of a total of USS 150.0 million) 3.29 The Shaktinagar urban area was among those targeted by the Uttar Pradesh Urban Development Project for investments in slum upgrading, sites and services, water supply, drainage, low cost sanitation, and traffic engineering and management. The loan for the Shaktinagar component has not been disbursed to date. This appears to be due to the unwillingness of the State Government to provide funds for infrastructure provision in the region. It considers the problems of the area to be a Central government concern. * Uttar Pradesh Power Project - Obra Component (Loan 2957 --IN a2proved June 1988. suspended April 1991. US$ 31.1 million out of a total of US$ 350.0 million) 3.30 In keeping with the project objectives of meeting electricity demand in U.P. and effecting institutional, operational and financial improvements in UPSEB, the Obra component of the project consisted of the reinforcement of the coal handling systems at the 1,000 MW Obra "B" thermal power station in the Singrauli area including: the installation of an additional coal handling syster of 1,000 ton/hour; and, the acquisition of 220 wagons for the transportation o." coal from the coal mines. The project was suspended in April 1991 because the project agency (UPSEB) did not comply with the financial covenants and some components of the action program. 19 Proposed Bank Projects 0 NTPC Power Generation Proect - FY 1993. Estimated-loan XSS 400 million 3.31 The proposed project will comprise a time-slice of NTPCIs least- cost investment program which currently includes up to eleven different coal and gas-based power stations. Extensions of the Rihand and Vindhyachal power stations - 2x500 MW for each station - are part of NTPC's investment program and are expected to be included in the proposed project. The project is currently in pre-appraisal stage and appraisal is expected to be in the beginning of June 1992. The project is likely to include a specific cor:ponent to strengthen NTPC's environmental management capability and to provide for a program of priority environmental actions. Negotiations are expected to be in September 1992 and.the project is expected to go to the Bank's Board for approv'al.in late 1992 or early 1993. 20 IV. ENVIRONMENTAL SETTING 4.01 Singrauli is an example of the problems associated with rapid development and industrial growth in an isolated agricultural region, as evident in many areas of the developing and developed world. Rapid development and associated population growth in the region have brought major pressures to bear on the physical and social environment, the infrastructure base and local institutional capacity. This has led to a deteriorating physical environment, infrastructure and service deficiencies, land constraints and settlement issues, and to social problems and tensions between the original agriculturally based "local" inhabitants of the region and the new, generally better educated migrants attracted to the region by employment opportunities in the developing industrial economy. 4.02 As is frequently the case in such regions, these problems have been exacerbated in Singrauli by the qncoordinated process of development, the absence of environmental and land use planning, institutional weaknesses and by the inadequate resettlement and rehabilitation programs for those mainly local inhabitants displaced by industrial and mining activities. There has also been little scope for the original inhabitants to participate in the benefits of the growing industrial economy. Their employment opportunities are highly restricted as they do not generally possess the education and skills necessary to participate in the industrial workforce and to compete with migrant labor. In addition, they have not benefitted from improved infrastructure and service provision which has mainly been provided to date by the new industries themselves in project townships to their workforce. 4.03 The degradation of the physical and social environment in Singrauli is a manifestation of the negative externalities associated with the development of coal mining and other industrial activities in the region. While the economic benefits of the development of the region are felt nationwide, the environmental costs are concentrated in the region itself and particularly on the region's original inhabitants. 4.04 This section will discuss the main areas of tension in the region between development and environmental sustainability. The EdF study contains a useful summary of environmental mitigation measures necessary to address key environmental problems of the region. This summary is quoted in full at Appendix B. Air PollUtion 4.05 Problems of air pollution in the region are primarily related to dust. The major source of dust is soil erosion followed by coal mining activities. In general, the EdF study concluded air pollution from dust has not reached critical levels for health with the exception of some specific locations at or near some coal mines where the Indian standard for dust (SPM) in industrial areas is exceeded. For example, 50 percent of the residents near the Bina mining area have been found to suffer from broncho-pulmonary diseases - symptoms of coal dust inhalation. SPM levels in the vicinity of other industrial areas are significantly below the Indian standard. 21 4.06 Air pollution from the thermal power plants and other industries is not as yet a major problem. While thermal power plants are the major generators of gaseous effluents and none of the region's six power plants are equipped with desulphurization controls, the PdF study indicates that at present, neither SO2 nor NO. have attained critical values. However, very localized critical values exceeding the Indian standard have been found close to urbanized areas with congested traffic zones and along main roads. 4.07 As for the future, dust pollution is expected to increase with the further development of the region due to population influxes and mining and industrial development activity that will contribute further to soil erosion. In the absence of environmental and land management measures, EdF concludes dust pollution will become a critical factor in the region in a maximum capacity growth scenario (Scenario 3). Without remedial actions, sulphur concentrations are also expect;d to marginally exceed the Indian standard with the further development of. the region and NO. concentrations are expected to reach critical values in the intermediate capacity growth scenario (Scenario 2). Water Pollution 4.08 With respect to water quality, groundwater does not generally meet the standards for drinking water requirements. This is a major problem as 78 percent of the population in the villages rely on wells as their major source of drinking water. While the major cause of pollution is faecal contamination of open wells, water quality in some wells has also been affected by the presence of cadmium and mercury caused by seepage from the ash ponds located near the wells. The Rihand reservoir is the only large source of water to meet drinking water standards after simple treatment and is the major source of drinking water supply to most of the project townships. The townships have water supply networks and treatment plants of various capacities provided and maintained by the companies concerned. 4.09 The Rihand reservoir is also the primary source of water for power generation, coal mining, ancillary industries, and other related activities in the region. Water quality in the reservoir is primarily affected by its use as a cooling pond for hot water discharges from the six thermal power plants; by the overburden dumps in the mining areas (a result of opencast mining procedures in Singrauli) that are prone to erosion, and by the use of the reservoir for ash dikes to dispose of the large amount of flyash produced by the thermal power stations. Nevertheless, EdF concluded that overall water quality in the reservoir is at acceptable standards and with minor treatment is suitable for drinking purposes. The conclusion appears at odds with other parts of the EdF analysis. For example, EdF also points out that the most critical pollution to surface waters comes from mercury and pesticides released by the Kanoria Chemical Plant and that water samples from surface waters near the Plant indicate mercury levels to be 50 times the Indian effluent standards. 22 Degradation of Forests 4.10 Degradation of forests in Singrauli 1-as been occurring for at least the last century as the demand for agricultural land and forest products has increased. The decline in the area and quality of forests and associated problems of soil erosion and siltation, have accelerated with the recent developmeut of industrial and mining activities, but have not reached critical proportions. 4.11 The recent study Area Reforestation and Watershed Protection (referred to in Section III, see Appendix D for details), indicates that while the forest areas around the Rihand reservoir are currently relatively intact and well-stocked, the acceleration of industrial activities (both current and planned) is degrading this resource rapidly. To protect forest lands, the study recommends improved forest and land use management practices combined with improved employment opportunities in the industrial economy for the local inhabitants of the region. 4.12 The study notes that settlement in forested areas by people displaced during the construction of the Rihand reservoir in the 1960's led to a significant loss of forested areas. At least 44 percent of the people in the core area around the reservoir were displaced during its construction. The resettlement process was poorly planned and unsystematic, resulting in land grabbing and forest clearance around the reservoir and in the hills. Occupation on larger, more fertile tracts was usurped by the more powerful upper caste project affected persons, while tribal populations and lower castes were forced to retreat into and clear more marginalized and erodible forest uplands less suitable for agriculture. Inability to obtain sufficient income by increasing their agricultural productivity, lack of permanent employment opportunities and the doubling of population, left the newly dispossessed with no option but to subsist by exploiting forested areas. High fuelwood prices and increasing demand are placing even greater pressures on forested areas. 4.13 The study also notes that forests in the region have been affected differently, depending on their location. For example, natural forest cover decreased in the forest districts of Renukoot in U.P. and East Sidhi in M.P from 50 percent of the total area in 1971 to 28 percent in 1990. However, some other forest districts (particularly south-east of the reservoir) were relatively unaffected. Agricultural Land 4.14 The construction of the Rihand reservoir in 1960-61 and the development of mining and industrial activities have also brought about significant changes in agriculture. A large area of relatively fertile land (460 km2 or 15 percent of the total area of the region) was submerged under water by the reservoir. In the Waidhan plain, M.P., some 40 km2 has been appropriated for power plants and associated townships. In 1989, about 70 km2 of land was in the process of conversion from agriculture to other uses. New development projects are now proposed for the richest agricultural lands in the region in the Kachen and Mayar River valleys in M.P. which will result in 23 the further loss of agricultural lands. The area under cultivation and yield per acre is not enough to meet the food requirements of a growing population. The shrinkage of productive agricultural land and of the forests which sustain it, is thus fueling a trend towards decreasing food self-sufficiency, as seen in regional grain, dairy, vegetable and fruit deficiencies. Increasingly food is having to be imported at high prices. 4.15 While a decrease in land available for agriculture in the region is inevitable with the substitution of other land uses, the extent to which this occurs and the associated costs can be reduced by effective land management. The institutional base for effective land use planning is very weak in the Singrauli region and it appears little attention has been paid in the development process to protecting where possible more productive agricultural lands. Looking to the future, no significant modifications in the current land use pattern are expectedlin the short to medium term scenario of intermediate capacity growth (Scenario 2) as, while capacity will.be increased, no new power or mining sites are proposed to be developed. Pressure on land is expected to increase, with the influx of migrants during the construction stage of new plants, but this will decrease once they are in operation. Under maximum capacity growth (Scenario 3), however, land will be required for new power stations and mining operations. As noted above, industrial development plans in the Kachan and Mayar valleys (M.P.) is expected to significantly decrease the area of Singrauli's richest agricultural lands. Land Constraints and Lack of Land Use Plannina 4.16 Since 1971, the land use pattern of the region has undergone considerable change with the large scale concentration of economic activities around the Rihand reservoir. These developments have heightened the competition for land for industrial and residential purposes. Rapid growth is taking place within a development corridor squeezed between the mine concession areas and the Rihand reservoir. Much of this area has already been taken up by the thermal power plants, residential colonies and railways leaving virtually no land for oustees or the increasing numbers of service population. It is in the densely over-developed core of Singrauli where the environmental externalities of development are most strongly felt. 4.17 These problems are exacerbated by the absence of land use planning and effective land management. There is virtually no planning among the major land users (mines and thermal power plants). Project townships are of very low density, and consume more land than neckssary. The living conditions in these areas are in sharp contrast to those in shanty towns and rehabilitation colonies. Some of the ash disposal ponds are too large, having heights in excess of 20 meters and areas of the order of several hundred acres. The mine companies do not have well conceived and executed mine extraction and overburden plans focussed on minimum disturbance. Too many mines appear to be opened concurrently with inadequate planning given to full extraction and restoration. Topsoil is not being retained for restoration, the overburden dumps are not adequately consolidated and planted, and runoff is a major problem. The transmission line corridors are also wasteful of space. This sporadic spread of development is costly to service by roads, drainage, 24 sewerage and water supply. The pressure on land has induced land speculation, displacements and increased social tensions. Infrastructure and Service Deficiencies 4.18 The project townships with infrastructure and services provided and maintained by particular industrial organizations are the only areas in the region with more or less adequate facilities. These townships, which accommodate about 35 percent of the region's population, are largely self contained entities with potable water supply, drainage, sewerage and/or septic tank facilities, solid waste collection, educational and health facilities. The provision and usage of these facilities is restricted to the township residents. . 4.19 The remaining 65 percent of the population In the region has variable but generally very poor access to essential infrastructure and services. In terms of drinking water, wells are the only sol4rce-of water for 78 percent of the villages while tap water is available only in 2 villages. The well water does not meet the standards for potable water. Urban areas supplied through water networks drawing on the Rihand reservoir often suffer from frequent water shortages. Health care services &re also underdeveloped. Only 33 percent of the villages had some health facilities including the presence of a registered medical practitioner within a distance of 5 kilometers. Basic educational facilities are also lacking, with 33 percent of the villages devoid of primary educational facilities. Sanitation and Solid Waste Management 4.20 Details of the treatment of human and solid wastes are not available though both the EdF and TCPO studies indicate that treatment is inadequate. EdF has noted that household effluents are generally released into the subsoil without any treatment and that a significant cause of water pollution in villages is faecal contamination around ground wells. Inadequate Resettlement and Rehabilitation Programs 4.21 The number of people displaced by industrial activities in the Singrauli region is unclear. Estimates of those displaced during land acquisition for the construction of the reservoir, power and mining projects range from 100,000 to 200,000 persons. Since most of the displacements occurred in the 1960's and early 1970's (population in 1971 is estimated at 240,000), it appears that almost one half of the population in the region at that time may have been subject to displacement at least once. There is also information to indicate some groups have been resettled several times. The EdF study indicates that only about one-third of the ousrtees have been compensated for the loss of their land. 4.22 Resettlement colonies have been developed in Singrauli since 1977 to accommodate people displaced by the power plants and coal mine projects. There are two types of resettlement colonies - those developed by NCL, the coal company and those developed by NTPC, the power company. A resettlement study on Singrauli (see Appendix D for additional details) found the following 25 distinctions between the NCL and the NTPC resettlement colonies in terms of the procedures, norms and approach that they follow: i) While NCL develops its own resettlement colonies NTPC transfers the funds to the district administration for the same. Thus in the case of power projects the responsibility for developing the site and providing infrastructure lies with a different agency, while the coal company is directly responsible for the performance of its resettlement colonies. ii) The norms of the companies also differ with respect to eligibility a) for a plot, b) for a job and c) in terms of compensation rates for land and houses. a) NCL offers a 60' by 40' plot of land to every adult male member of an ousted family, while NTPC offers one plot per title holder, irrespective of the number of families that share that title. b) According to NCL norms, oustees with holdings of 0.5 acres or more are ellgible for one job per family. Under NTPC norms, which requires fewer unskilled workers in comparison to NCL, only those with a land holding between 1-5 acres are considered for a job. c) NCL, which acquired a majority of its land subsequent to NTPC's acquisitions pays higher land compensation rates than NTPC (Rs. 7700/acre paid by NCL as compared to Rs 4500/acre paid by NTPC). iii) While NCL plans its resettlement colonies as extensions of existing villages (it acquires agricultural land from an existing village, demarcates 60' by 40' plots and provides the required infrastructure), NTPC tends to establish new villages. 4.23 Information on the relative performance of the two approaches is not available. It is clear, however, that policies aimed at resettlement and rehabilitation (R&R) have been inadequate. The main problems have centered around alternative employment opportunities, compensation, the location of colonies and the lack of provision of basic services. 4.24 R&R programs have primarily focused on providing "physical" amenities. The displaced families are neither settled on a sufficient area of agricultural land, nor have the public sector companies responsible for relocating them provided sufficient employment opportunities to create a livelihood in alternative occupations. 4.25 Compensatory measures in R6R programs have been inadequate. Problems related to compensation include: a) very low rates of cash compensation: those receiving cash compensation cannot purchase equivalent land with the m.ney received. b) institutional delays in assessment and payment of compensation where R&R in Singrauli is handled by the local authorities (Special Area District Authorities or SADA's) of both the states, U.P. and M.P. 26 c) the payment of cash compensation to only those who have valid property deeds, thus excluding many who live on unregistered lands. 4.26 Infrastructure and service deficiencies are major problems in rehabilitation colonies. A study4 of some of the rehabilitation areas indicates that only 40 percent of the houses have wells and the nearest water pumps were found to be unserviceable in more than half the cases. 25 percent of the households live in extremely unhealthy and/or dangerous conditions (subject to periodic flooding, close to industries and ash lagoons). However, the study on resettlement suggests that rather than the level of service provision, it is improved access to permanent jobs and the location of resettlement colonies that aire of critical importance to the residents of these colonies. 4.27 The poor location of the resettlement colonies, increasing unemployment, and lack of infrastructure and amenities, have been a major source of frustration for the local inhabitants of the region. Slum Development 4.28 Along with industrial development and the establishment of project townships has been the growth of slums in the region. A significant but unknown number of people in the region are squatting in shanties on state or agricultural lands and along roads and rights of way. The study conducted by TCPO indicates that most of the slum dwellers in the Shaktinagar-Audimore area have come from south Bihar and eastern Uttar Pradesh, and most of them are either employed in NTPC or NCL as casual laborers, They live in shanties, have little or no access to infrastructure such as water, electricity and adequate sanitation facilities and their illegal occupation of land could subject them to further displacements. A similar situation exists in the labor camps of contractors hired by the power plants and coal mines. These camps are disorganized, squalid and unsanitary with virtually no services. 5 EdF study sample consisted of 1049 households in five NTPC colonies and 344 households in the rehabilitation colonies of the NCL and UPSEB. 27 V. KEY ISSUES FOR SUSTAINABLE DEVELOPMENT 5.01 The key dilemma for decision makers is how to undertake development of the Singrauli region so that it is environmentally sustainable and incorporates acceptable environmental standards. It is clear from the region's rich resource base that further development will occur to help meet the growing demands for energy in the Indian economy. The litany of issues and problems associated with the development of the region have been discussed in previous sections but it is not clear how these, and other issues which will emerge, can be effectively addressed in a practical, concerted manner as development occurs over what will be a substantial period of time. This Section identifies and discusses some of the key issues which will need to be resolved if development of the region and protection of its physical and social environment are to be compatible. 5.02 The key issue for the sustainable development of the region is the design and implementation of a sound develooment process within the region through which the costs and benefits of development decisions including their environmental implications are weighed, competing interests are balanced, priorities are set and decisions taken, resources are collected and allocated, necessary investments and programs are undertaken, and regulations and standards enforced. Such a development process is inevitably an issue of governance, it cannot be achieved through a narrow development plan based on the specification of rigid development and environmental criteria. Such a plan wo-.4 ,-on become irrelevant, the hostage of obsolete assumptions. 5.03 Typortant requirements for a development process to be effective include: - the involvement of all parties with an interest in the region in decisions which affect their interests; - adequate information, including through the monitoring of development activities and their environmental impacts; - strong, effective institutions with adequate financial and skilled staffing resources; - institutional and administrative arrangements which provide for clear functional responsibilities of agencies, effective coordination of activities, and where necessary the enforcement of decisions; - administrative arrangements and financial/pricing instruments which provide clear "sIgnals" to guide the activities of the various parties involved in the development process; - the implementation of specific action programs and investments within the context of a long term strategy that can accommodate changing regional conditions. 28 5.04 The building of such a development process in Singrauli will take time. It involves major institutional strengthening. The process developed will reflect the constitutional, legal, administrative and cultural heritage of India and the region. The Bank is not in a position to directly advise on the appropriate or most effective process. It can, however, provide information on processes and administrative arrangements adopted in similar regions in other countries and point to the factors which have made them more or less successful. It can also in concert with the GOI, the States, and other multilateral and bilateral ager.cies with an interest in the region finance or undertake studies and investments designed to foster the emergence of an appropriate development process. The proposed Development and Environmental Strategy Study, the terms of reference for which have been developed in consultation with MUD and the United Kingdom Overseas Development Administration, is designed towards this end. 5.05 Key issues that need to be addressed in building a development process iti the region and in achieving sustainable development are discussed below. The Pace and Nature of Development 5.06 The pace of development in Singrauli is primarily dependent on the expansion of coal mining and power generating capacity. These are public sector investment decisions. Development of the region and the pace of such development is directly within the ambit of government. EdF concluded that with the implementation of power projects that are already in or near the construction stage, a total operating capacity of around 10,510 MW in the medium term is the most likely scenario along with a rapidly increasing population (EdF estimates by around 76% in the core area). Over the longer term, EdF envisaged further investments and population growth in the region. 5.07 A key lesson of development in the region to date is that the pace of development should not exceed the capacity of the development process to successfully accommodate growth. Existing problems are the direct result of this occurring. The EdF conclusions imply that the pace of further development should be commensurate with the capacity of the development process to establish and enforce appropriate environmental protection measures, to adopt and monitor environmental standards and regulations, and to undertake broader management of the physical and social environment, embracing such issues as land management, resettlement practices and infrastructure and services provision. 5.08 The pace of development of the region which could be successfully accommodated is difficult to assess. This is one of the issues to be addressed in the proposed development and environmental strategy. Institutional Strengthening 5.09 Irrespective of the precise accuracy of the EdF growth projections, they give an indication of the order of magnitude of likely developments in the region and of the measures necessary for this development to be environmentally sustainable. What is clear, however, is that the 29 development process and associated institutional base does not exist to establish, implement, monitor and enforce the environmental standards and controls EdF recommends or to undertake broader planning of the social and physical environment and related infrastructure and service provision. 5.10 A development process to address these matters will take time to develop and needs to involve the wide diversity of central and state government agencies, public and private sector corporations, local government, and non-governmental and community organizations with an interest in the development of the Singrauli region. An integral part of the process is public participation and accountability. While in many respects an appropriate institutional framework already exists in the region, it has not proven capable of addressing the problems of regional development. The form is there but it lacks substance. The performance of individual organizations and the coordination arrangements between them need to be substantially strengthened. This challenge of building up institutional capacity, the weakest link'in the development chain, will- require a systematic program of .institutional strengthening over the longer term. . 5.11 The evolution of a sound development process based on effective institutions and coordination arrangements will face significant barriers. Institutional weaknesses, including the lack of adequate financial and staffing resources, and unclear jurisdiction across state boundaries are-major constraints to effective regional and environmental management in the Singrauli region. Institutional weaknesses, for example, have led to the ineffective enforcement of environmental regulations and monitoring of environmental standards. Unclear legal and functional jurisdictions of national and state government agencies and corporations have resulted in a lack of coordination across levels of government. Weak institutions, weak enforcement capacity, poor jurisdictional arrangements leading to lack of coordination, narrow-based or centralized decision-making, ineffective or near-absent consultative and participatory mechanisms and most important, lack of political will, are all symptomatic of the inadequate arrangements for government and public administration in the region. 5.12 The following institutions operate at the central, state, local and community level in Singrauli and will have important roles in the evolution of an effective development process: 0 (i) Central Government 5.13 At the Central Government level, key players in the Singrauli region include the Ministry of Urban Development (MUD), the Town and Country Planning Organization (TCPO), the Ministry of Energy (Power Department), the Ministry of Coal (Coal Department), Coal India Limited (CIL) and the Department of Environment, Forests and Wildlife within the Ministry of Environment & Forests. The main Central Government corporations operating in the region are the National Thermal Power Corporation (NTPC) and National Coalfields Limited (NCL). 5.14 MUD is responsible for ensuring coordinated development of the Singrauli area in consultation with the States of Uttar Pradesh and Madhya 30 Pradesh and the other ministries and agencies with an interest in the region. The TCPO is responsible for preparing a regional plan for the area taking into consideration socio-economic, environmental and other pressing issues. (ii) State Government 5.15 The key areas of infrastructure and service provision, land use planning, zoning controls, and environmental protection are predominantly the responsibility of the states. Both UP and MP have established Special Area District Authorities or SADAs (one in each state) with branch offices in Singrauli, who are empowered to act as municipalities. Although the SADAs seem to have been accorded extensive powers, they are inadequately staffed, under-equipped and poorly financed. At present, the government organizations of the states of U.P. and M.P. and their SADAs are not effective in undertaking their functions within the region. The failure of public management and the scarcity of financial and technical capacity has resulted in the widespread deficiency of.planning, environmental controls and infrastructure and services provision in the region. Coordination of activities between the SADA's and other"state bodies such as the Public Works Department, the Land Registry Department and UPSEB and with central government bodies and private corporations also appears to be weak. 5.16 The management of the region is complicated because Singrauli is located on the border of two states - Uttar Pradesh and Madhya Pradesh. This gives rise to two problems. First, the region is subject to divergent laws and second there is unequal administrative capacity, with the MP administration having greater access to skilled manpower and resources than the UP administration. Overall though, the state administrations have been relatively quiet role players, lacking resources and skills. There also appears to be a perception within both states that Singrauli is a low priority and a "problem" for the central government. This may reflect a view that the region's growth has largely been the product of the operation of central government corporations and central government resources should be used to rectify any resultant problems. (iii) Public and Private Corporations 5.17 Public and private corporations are the major employers in the region and studies conducted by EdF indicate that they are also some of the biggest and most powerful players in' the region. The public sector firms include, the NTPC, NCL and the Uttar Pradesh State Electricity Board (UPSEB). Private corporations include Kanoria Chemicals and Hindalco Aluminum Ltd. which are owned by the Birlas (a leading industrial house). The political and economic power of these large corporations is an institutional concern since they are able to largely ignore directions from state agencies. It is essential that these large corporations are consulted on and represented in any development process within the region. (iv) Local Government 5.18 Local institutions consist of the District Assemblies (Zilla Parishad) and Village Councils & Assemblies (gram panchayat and gram sabha). 31 It appears these bodies have not, as yet, been able to fully-perform their functions of local representation, and, where necessary, resource mobilization and service delivery. The District Assemblies in each state are consultative bodies elected for a five year term and control local infrastructure and services. They are administratively and financially weak. Roughly 70 percent of their funds go towards development and 30 percent towards administrative purposes. Village Councils in the area are smaller representative bodies which are closest to the people. While their interest in municipal affairs tends to be genuine their activities are greatly hampered by their lack of skills and resources. With the designation of villages as "notified" or urban areas by the M.P. SADA upon its creation in 1978, the village councils are practically defunct in M.P. The process of designating villages as "notified" areas in U.P. by the U.P. SADA is underway and is likely to lead to the abolition of the village councils in that State. (v) Non-Governmental and Community Organizations 5.19 Four major non-governaintal organizations supported by smaller committees and groups operate in the area. The Udvasit Kisan Mazdoor Parish.d (UKKP) or the Assembly of Expropriated Peasants and Workers was founded in 1986 to defend the interests of those whose lands have been expropriated. A trade union, the Udvasit Pariyojana Shramik Sanghatana (UPSS) or the Organization of Workers Expropriated by Development Projects is closely associated with the UKMP and is particularly well-established within the Shaktinagar power station area. The Gobindpur Ashram, situated north of Muirpur in U.P., was founded in the 1950's and is involved in several community development activities such as water harvesting programs, vocational training and education. The Lokhit Samiti defends the interests of those ousted from their lands. 5.20 These organizations have played an important role in the process of grass-roots mobilization and of drawing wider national and international attention to the issues of resettlement. However, the study on "Resettlement in Singrauli: Negotiations, Land and Employment," (see Appendix D for additional details) points out that oustees are now largely able to organize independently of these NGOs and that the NGOs are finding difficulty in maintaining their influence. It notes, for example, the UKMP is practically defunct, with the number of branch offices having declined from 11 to 2 and with only about 10 workers continuing to be actively associated with this organization. The apparent decline in significance of the NGOs may reflect their success in creating awareness of the rights of displaced people who are now able to independently or within informal community groups press for their demands. 5.21 The study on "Resettlement in Singrauli: Negotiations, Land and Employment" also notes the presence of a large number of small informal community groups in the Singrauli region. While these groups are not directly involved in the decision-making process, they appear to serve as effective lobby and special interest groups. 5.22 Despite some grass roots activity, particularly with respect to resettlement issues, there is no effective formal mechanism for public 32 participation in the Singrauli region. District assemblies, and political parties are some of the mechanisms through which participation occurs. District assemblies have proven to be rather inactive due to their lack of resources, and political parties have not often served as effective channels for participation because they are not often represented locally. As stated earlier, local representation structures such as the village assemblies are being abolished as villages are designated as urban or "notified" areas. Non- governmental organizations and informal community groups have proven by far the most effective channels of communication with the government. Financial Managment Issues 5.23 A sound development process for the region raises fundamental issues of governance. One of these is government finance. To be successful, the development process will require resources to fund: - the coordination of agencies and groups with an interest in the region's deielopment; - the establishment, implementation, monitoring and enforcement of environmental standards and controls; - environmental planning and management; and - the identification, provision and on-going operation and maintenance of necessary infrastructure and services both to meet the needs of the local population and the dumands of industry. 5.24 While such activities will probably be the functions of a number of agencies, they require that agencies have a clear definition of their functions and adequate funding. At present in the region, functional responsibilities are unclear and there has not developed a regime of taxes and user charges (particularly focused on the public and private sector corporations with operations in the region) and inter-governmental transfers (possibly through a regime of matching grants from central and state government sources), necessary to underpin administration costs, environmental measures and the provision of infrastructure and services to the resideuts of the region. To the contrary, the arrangements that have developed are largely based on individual corporations responsibilities to their workforces. 5.25 To the extent a local revenue base has developed, it is centered on the SADAs. Most of the SADAs finances come from the State budget and from collecting local taxes from the coal mines and thermal power plants. However, the National Coalfields Limited (NCL) has taken the M.P. SADA to court challenging the SADA's right to collect property taxes. The EdF study notes that only a small proportion of the taxes collected by the SADAs appears to find its way back to the Singrauli region for environmental management and the expansion of infrastructure and services. What is near-absent in the region is at clearly defined revenue base and administrative arrangements for revenue collections from which activities in the region can be financed. This base will need to be developed to financially underpin the development process. 33 Employment and Poverty 5.26 Studies have pointed to the importance of employment opportunities to the inhabitants of tb region. Employment in the modern industrial economy is the primary consideration in large scale migration to the region and it appears to be a matter of increasing interest to people in resettlement colonies, most of who formerly worked in agriculture. Although resettlement packages have not offered viable land-based agricultural options, there is some evidence that those affected by resettlement would prefer employment opportunities with the power and coal companies rather than returning to their former largely subsistence agriculture existence. The younger generation in particular, seems to prefer urban-industrial jobs to farm labor and to the insecurities associated with rain-fed agriculture. 5.27 The laborforce, however, is predominantly unskilled and supply greatly exceeds the employment opportunities for unskilled labor. The "fortunate few obtain permanent employment, the majority eke out a living obtaining short term employment when available. Migration has exacerbated the employment problems of the original inhabitants of the region. Migrants have .generally better skills and experience and have been relatively more successful in competing for both casual and permanent jobs. Whi'.e both NCL and NTPC have resettlement policies that provide for the employment of some of those affected, the majority of people resettled have not been able to find permanent employment. 5.28 The ability of the regional economy to create employment opportunities will be an important factor in determining whether the development of the region is sustainable. Employment has already become a divisive social issue, directly tied to the incidence of poverty in the region and to access to the infrastructure and services provided in the project townships. Efforts need to be made by NTPC, NCL and the local authorities to provide wider programs of assistance, such as special training and additional employment opportunities in agriculture and other sectors, particularly for those affected by resettlement policies. Pollution Control and Environmental Management 5.29 A major theme of this paper is that the sustainable development of the,Singrauli region is depc.ident on the design and implementation of a sound development process, centered on effective institutions, which facilitates the sound management of the physical and social environment. One important focus of environmental management which is perhaps given too little emphasis in the conclusions of the EdF study, but is critical to the sustainable development of the region, is industrial pollution control. While numerous examples of polluting activities are cited in the EdF report, the general conclusion is reached that further industrial expansion can be accommodated if standard environmental protection measures are adopted and there is better operation and maintenance of industrial facilities. Unfortunately, the report does not fully explore how these are to be achieved, or if they are achievable within any reasonably short timeframe, in the Singrauli situation. 34 5.30 Pollution abatement and control requires the establishment of appropriate environmental standards, the monitoring of outcomes, and incentives to encourage compliance or discourage non-compliance. These activities are normally the responsibility of an institution or institutions within government though some aspects, such as monitoring, can be contracted to the private sector. The introduction/strengthening of these functions in the Singrauli region is not a simple task. It will require a strong agency with clear legal powers and appropriate technical expertise and financial resources to successfully oversight pollution abatement and control. It will also require the introduction and enforcement of a system of incentives - such as pollution charges or taxes - whereby the industrial corporations are encouraged to comply with pollution standards and meet the costs of any environmental damage they cause. 5.31 From the perspective of the industrial operations, pollution abatement and control also raises important management, technical and financial issues. The introduction of standard environmental protection measures implies new investments and can mean the introduction of new technologies and the associated staffing and organizational arrangements these may require. Improved operation and maintenance practices also will require improved processes and staffing. There can be a significant financial cost to the industrial corporations which has to be reflected in prices to consumers or absorbed through increased government subsidies. 5.32 To date, studies on the region have focused on what technical pollution abatement measures are necessary. This is necessary in the short term. More important to pollution abatement and control in the longer term, however, is the establishment of institutional arrangements and an incentives system to encourage industrial operations in the region to adopt appropriate practices. As noted previously, it is difficult to be sanguine about the capacities of the government authorities and industrial corporations in the region to successfully implement pollution abatement and control measures without the major strengthening of these institutions. 35 VI. TOWARDS AN ACTION PROGRAM 6.01 The problems of the Singrauli region are only partially understood. Further work is necessary to develop the information base on the region, to analyze the various interrelationships between development activity and the regional environment and to explore how the development of the region might be pursued through a systematic development process which accommodates acceptable environmental standards. 6.02 Nevertheless, the problems associated with development to date and the prospect of further development over the short to medium term, make it essential that a start be made now both to rectify existing problems and to ensure further development occurs in an environmentally sustainable manner. The alternative is that the situation will worseh, as it is unrealistic to expect development of the region to stop while further studies are undertaken and a development process evolves. 6.03 This suggests that the Government tof India should adopt an. approach towards the region that involves both short term And medium term actions. These actions should be aimed in the short term at alleviating, where possible, existing critical environmental and social concerns. They should also aim to adjust the pace of regional development to a level able to be accommodated by an evolving development process without undue strain. In the medium term, actions should be directed at fostering an effective development process which incorporates acceptable environmental standards and at strengthening the region's institutional base. Investments, and an associated program of institutional development, should be supported compatible with these ends. Short Term Actions 6.04 In the short term, the following actions would help address the problems of the Singrauli region: - completion by the Bank of the environmental and institutional studies presently in progress and the review of their findings and recommendations by the GOI; - prompt preparatton and implemantation by each agency in the coal, power and industrial sectors of "priority environmental actions" (PEAs) for addressing pollution problems identified in the EdF "Environmental Study of the Singrauli Area" and the environmental feasibility studies which are nearing completion; - selective interventions to address other critical environmental and social concerns identified in the EdF and TCPO studies and in the Area Reforestation and Watershed Protection Study which is nearing completion; - the timely and successful initiation and undertaking of the study to prepare a development and environmental strategy for the 36 Singrauli region by the GOI, the Bank and the United Kingdom Overseas Development Administration; - an increased emphasis by the GOI, the Bank and implementing agencies involved in project supervision and preparation in the region on environmental management; - a requirement that any new project proposed should be subject to detailed environmental assessment and incorporate PEAs for addressing environmental impacts identified and environmental issues flowing from previous investments by the agency in the region. 6.05 A number of potential shdrt term investments or interventions to ameliorate specific problems have been identified either through ongoing Bank project work and supervision in Singrauli or through various studies that have been completed or are nearing completion. Further such investments may be identified by the studies still un4erway. It may be possible to prepare and execute these actions in a relatively short 'timb period. They could b6 financed from the operating revenues of agencies in the coal, power and industrial sectors, from ongoing Bank-financed projects or through bilateral sources. Details of possible short term investments or interventions are discussed below. Pollution Control 6.06 Studies have identified a substantial number of pollution problems which need to be addressed quickly. Actions are required by the operational agencies involved, their parent ministries and by the Ministry of Environment and Forests which performs a regulatory role. To address these problems, Priority Environmental Actions (PEAs) should be prepared in respect of each plant or operating unit specifying the pollution problems to be resolved, the measures to be implemented to rectify the problems and their cost, and the timeframe for implementation with the more critical problems to be addressed as a first priority. Such PEAs should be prepared in consultation with each agency's parent ministry and with the Ministry of Environment and Forests and any complementary actions required of these agencies should be listed separately. If pursued vigorously, these actions could be agreed quickly on the basis of the studies undertaken to date and implementation commenced by end-1992. To address pollution problems over the medium term and preempt further problems arising, each unit should also be required to prepare and update periodically an environmental impact assessment. PEAs should be prepared in parallel with this document to correct deficiencies as they are identified. Power 6.07 Starting immediately, each power company - kIE (Singrauli, Rihand and Vindhyachal power plants), UPSEB (Anapara and Obra power plants) and Hindalco (Renusagar power plant) - should be required to prepare and implement Priority Environmental Actions for each of their power stations. The PEAs should be mainly based on the EdF study and two of the environmental 37 feasibility studies nearing completion ("Air Pollution from Thermal Power Plants" and "Reclamation/Reforestation of Coal, Fly Ash and Red Mud"). These PEAs should include measures to control air pollution, to improve the effectiveness of ash dikes and for the revegetation of ash dikes. Where feasible, the Bank would consider financing agreed priority actions from the ongoing project with NTPC (Loan #2555) or from the Industrial Pollution Control Project (Loan #3334). 6.08 In respect of NTPC, the development and implementation of PEAs, along with other measures, will be a requirement for proceeding with project appraisal for Bank financing of the propnsed new power generation project which is expected to go to the Bank's BL d for approval in late 1992 or early 1993. For this proposal to proceed, it is esgential that it mesh with and, as appropriate, contribute to measures for addressing the environmental problems of the region. In preparing this project for consideration by the Bank's Board, it will be a requirement that: (1) before appraisal, in accordance with current Bank procedures, a detailed environmental impact assessment be undertaken (and an EA Executive Summary completed for distribution to the Bank's Board) embracing both the direct effects of the proposed investment on the physical environment MB_ its impact on the broader social environment; (2) during appraisal, a program for strengthening NTPC's environmental management capability and priority environmental actions be agreed for financing under the project; the PEAs are to address any negative environmental impacts of the proposed new investment or of existing NTPC investments in the region; and (3) prior to negotiations, all outstanding obligations or major problems in respect of environmental conditions/regulations and resettlement under existing NTPC operations in the Singrauli region are to be fully- addressed and complied with. 6.09 It would seem desirable to apply these project preparation requirements for protection of the environment to all proposals for new investments in the region regardless of the sector or financing source. Coal 6.10 IQL should prepare PEAs for its mining operations based on the recommendations of the EdF study and the study on "Reclamation/Reforestation of Coal, Fly Ash and Red Mud." In the short term, the major issues to be addressed are overburden restitution and revegetation. The Reclamation Study contains specific suggestions and guidelines on which work can start immediately in order to minimize erosion, retain topsoil, and lay a sounder foundation for future vegetation and reforestation efforts. This work should also be coupled with improvements in mining practices, also covered in the Reclamation Study, that will substantially improve mining efficiency and costs and reduce the amount of overburden being generated. NCL, which is still executing the Bank-financed Dudhichua Coal Project (Loan 2353-IN) (see 38 Appendix C for additional details), should be encouraged to implement its PEAs as a normal component of its operations. 6.11 At a more general level, gIL should be encouraged to prepare a wide ranging environmental protection program, which would also include the Singrauli region. The preparation work could be considered for Bank financing through an expansion of the scope of the proposed Jharia Coal Mine Fire Control project. A separate environmental project covering the coal sector could be considered for implementation of this environmental protection program. Industry 6.12 Each major industry in the Singrauli region (Hindaleo for aluminum, the Dala Cement Factory, Hi-Tech Carbon for carbon black, and the Kanoria Chemical Plant for caustic soda/chlorine/pesticides) should also be requested tb prepare PEAs based on the completed EdF report and the environmental feasibility studies nearing completion on "Cement Industry Pollution Control," and "Industrial Pollution Control for Specific Factories." The priority actions should include specific steps required to bring each operation into compliance with Indian national and state environmental regulations and to improve overall waste minimization and energy efficiency. In the case of Dala cement, the PEAs would include actions to control dust; in the case of the Kanoria Chemical Plant they would include actions to meet all discharge standards including for mercury and other hazardous materials. (Actions in these areas are already underway.) If Bank financing of these actions is considered desirable, the Bank could consider an environmental improvement project embracing these and perhaps other regional environmental improvement measures. Watershed Protection 6.13 NCL should be encouraged to investigate the feasibility of developing a local coal market, including its environmental implications, so that local people will have an alternative to cutting trees on area watersheds for fuel. Currently there is no formal market and a limited informal one. Other priority actions will be identified by the "Area Reforestation and Watershed Protection Study". This study will identify actions for watershed protection which will also be beneficial for water quality of the Rihand reservoir. It is desirable to move quickly to implement priority actions recommended by this study. In this regard, the Bank could review existing watershed/forestry projects in the India portfolio to determine if there is scope to finance such actions from within existing projects. Agriculture/Alternative Employment 6.14 ML should be encouraged to examine the feasibility of stimulating the creation of local dairy cooperatives, an idea it has already endorsed in principle. There is a large and growing demand in Singrauli for dairy products, which are now mostly transported long distances from Varanasi. NCL has agreed to initiate work on this, and the Bank should be prepared to assist by seeking possible funding from UNDP or other sources to hire appropriate 39 consultants to work with NCL. Consultant assiqtance could possibly be obtained from the It.dia Dairy Development Board (Anand), with which the Bank has had long standing operational relationships. Urban Infrastructure 6.15 Some $2.4 million has been allocated in the Uttar Pradesh Urban Development project (Loan 2797-IN) (see Appendix C for additional details) for infrastructure investments in Shaktinagar - roads, sanitation facilities, safe drinking water points. While these investments are urgently needed, the problem to date appears to be that the U.P. Government considers the problems of Singrauli to be a Central Government responsibility rather than a matter for Vhe State. As a result, it has been unwilling to put forward State counterpart funding for works in this area and considers such funding should be provided directly from the central government. In the short term the following actions should be considered: (a) the importance of these investments should be discussed:by the GOI and the Government of U.P. and the two governments should seek a resolution to this impasse on financial responsibility so that a specific action program might be developed and implemented; (b) the Government of U.P. should seek to establish an interim project implementation team, comprising the recently strengthened SADA, the Jal Nigam project cell and engineers from NTPC to prepare and execute local infrastructure works. Resettlement 6.16 The Bank should use its good offices with Z=g, particularly in connection with preparation of the proposed new power generation project, to persuade that entity to take a more pro-active posture with respect to the improvement of resettlement communities (Chilkadand and Parsar Raja) that arose from the Bank-financed Singrauli Thermal Power Project (Credit 685-IN). These communities are lacking safe drinking water, appropriate sanitation facilities, electricity. and a fully staffed dispensary. NTPC considers that the responsibility for these amenities rests mainly with the SADA but no action is being taken by this entity to rectify problems. NTPC could use its considerable influence and expertise to ensure that the facilities are fully established as promised. Participation 6.17 Efforts could be initiated immediately, mainly by NTPC and NCL, to encourage wider community based discussion/participation on issues of mutual concern. This could involve representatives of local industries, politicians, community leaders and NGOs. They would come together periodically for discussions on selected topics. Obvious topics would include living conditions and proposals for their improvement and proposals for future investments in the region. Other topics might include the EdF "Environmental Study of the Singrauli Area" which is now available publicly and the Environmental Assessment Executive Summary in respect of the proposed new investments in power generation capacity by NTPC. Subsequent sessions could be held on the reports of the four environmental feasibility studies being financed by the Japan Grant Fund (Appendix D). The aim of such sessions 40 should be to try to develop practical solutions to local problems and, over time, to build confidence and community cohesion. The Bank conceivably could help facilitate this process by seeking funding sources to bring in experts from other parts of India in community mobilization and participation. Medium Term Actions 6.18 Over the medium to longer term, but starting immediately, actions should be directed at fostering a development process which meets the GOI's laudable environmental standards and at supporting investments and institutional strengthening compatible with these standards. The GOI and the two State Governments could pursue the following actions over the medium term to address the problems of the region: * the strengthening of regional institutions and regional coordination arrangements: - the-completion of the proposed "Development and Environmental Strategy for the Singrauli Region"; - implementation of the strategy along with processes for its on- going monitoring and review; - the development and implementation of the priority social infrastructure and other environmental enhancement investments identified in the strategy study, possibly through a Bank financed Singrauli regional infrastructure project; - the development and implementation of further investments in the coal, power and other sectors in the region which are compatible with the strategy and satisfy the requirements of detailed environmental assessment. 6.19 As discussed and agreed with the GOI, the objective of the development and environmental strategy study is to prepare a strategy to guide the Singrauli region in both the immediate and longer term. The strategy is to be environmentally sustainable and incorporate acceptable environmental standards. However, process and operational outcomes are to be emphasized rather than a fixed, rigid plan. The strategy is to provide for on-going monitoring and review and be developed using an open, participative approach that encourages the active participation and endorsement of the central, state, and local governments, NGOs, and the major industries/employers and local communities with an interest in the region. 6.20 The objectives of the proposed study are discussed in para 3.16. The study should be completed in about 18 months and is designed to: - analyze development trends in the region and the interrelationships between development and the regional environment; - develop and consider alternative development scenarios; 41 - prepare a strategy for the sustainable development of the region which incorporates a regional environmental management strategy and pollution mitigation program; - develop processes for the on-going monitoring and review of the regional strategy; - identify areas for institutional strengthening; and - prepare project identification reports on specific investments recommended for implementation. 6.421 The strategy study is designed to provide operational recommendations. Key study outputs are to be: (a) A regional development and environmental strategy. This report will focus on economic development, environmental management and pollution abatement measures, land-use planning, and infrastructure and services requirements. Recommendations will include an indicative capital development program and be framed to recognize constraints on public eApenditures. (b) A report on strengthening regional administration. This will contain recommendations on strengthening local institutions and on developing coordination and administrative arrangements - a development process - for the implementation, monitoring and review of the strategy. It will also consider the provision, operation and maintenance of infrastructure and services in the region and the appropriate means of financing these facilities. (c) Project Identification Reports for High Priority Investments. These reports will contain sufficiently detailed information on high priority investments - in both "hard" and "soft" sectors - to bring them to project concept stage with terms of reference. The objective of this work is to speed the implementation of the strategy by packaging projects to a stage where they could be considered for follow up feasibility study by domestic or international development assistance agencies. (d) AgencX-anecific action plans. This report will briefly list each main agency's responsibilities under the strategy over the next two years. The aim is to facilitate implementation and monitoring of the strategy and associated infrastructure investments. 6.22 The preparation of the proposed development and environmental strategy is necessary to give direction to the GOI's and the two State Governments future investments in the region. As matters presently stand, any involvement in the region through new projects is institutionally, sectorally and poli. ally difficult given the range of issues and the number and nature of institutions involved. Single agency projects such as with NCL or NTPC are unable to address the range of broader environmental issues which the EdF 42 study concluded were critical to the sustainable development of the region. Inevitably such single agency projects, if conducted in isolation from other broader environmental management programs, would worsen the region's environmental problems through, amongst other things, incri -ad population pressures. On the other hand, existing institutional/adminisurative arrangements and processes are not adequate to accommodate environmental and urban infrastructure and services programs which could address these broader environmental concerns. 6.23 The development and environmental strategy should allow possible future investmencs by the 001, the Bank or other agencies to be placed within the context of overall development and environmental considerations in the region. -It is to establish the on-going process, the framework, w4thin which particular investment decisions and medium and short term planninb an take place. The strategy is designed to bring the complex array of development, environmental and institutional issues in the region into focus, to define the broad directions development should take if it is to be environmentally sustainable and incorporate acceptable environmental standards, and to define a development process by which decisions on the future development of the region over the longer term can be taken. 43 VII. NEXT STEPS 7.01 This paper is intended to serve as a basis for discussion with the Government of India on the problems and future sustainable development of the Singrauli region. It refers to past, on-going and planned development of the region and to the environmental implications of development. Some short term and medium term actions for addressing the environmental problems of the region and for ensuring future development is sustainable and incorporates acceptable environmental standards are discussed. 7.02 Developments in the Singrauli region will depend on the actions of the Government of India and its agencies and of the state governments of U.P. and M.P.. As a development institution, the Bank is interested in the development of this resource rich region in an environmentally sustainable manner and in assisting the GOI in achieving this end. The Bank i- also interested in financing sound projects and programs which take due cognisance of the environment of the region and are directed towards the development of the region's resource base, the strengthening of its institutions, the enhancement of the environment or provide necessary infrastructure and services. The financing of such activities, however, needs to proceed hand- in-hand with the development of a sound regional development process and develc ment and environmental strategy. 7.03 The previous section outlined some possible elements of an action program which could be undertaken in the short and medium terms in the Singrauli region. The next step now is to discuss this paper with the GOI and to reach some common understandings on the development of the region. The aim should be to implement an action program for the region for the short and medium terms which the Bank and other multilateral and bilateral agencies could support. This action program should specify the objectives to be achieved and the instruments, timeframe and institutional responsibilities for achieving them. It should also provide for the periodic review of progress to accommodate any necessary revisions. TRANAL\CsWP51%SINGRAULl3PAPER3. SDP MAY 15, 1992 44 APPENDICES A. DEVELOPMENT OF THE SINGRAULI REGION ................................ 45 B. EdF SUMMARY TABLES OF ENVIRONMENTAL FACTORS AND MITIGATION MEASURES .......................................... 49 C. WORLD BANK PROJECTS IN THE SINGRAULI REGION ........................ 66 D. STUDIES ON THE REGION 71 Environmental Study of the Singrauli Area 71 Environment Feasibility Studies ................................. 74 Institutional and Socio-Economic Studies ........................ 76 World Bank Background Papers .................................... 80 Singrauli Regional Development Plan - Phase I ................... 81 45 APPENDIX A. DEVELOPMENT OF THE SINGRAULI REGION 1. Prior to the development of industrial activities, the Singrauli region was relatively sparsely populated and agriculture was the dominant land use. Situated on the periphery of the tribal belt, the region had (and continues to have) a substantial tribal population and lower caste populations sharing many characteristics of aboriginal society and land use. The population was scattered across several villages, with each village having relatively homogeneous communities, but adhering to a rigid occupational and caste structure. Agricultural (mostly subsistence) farming was the primary occupation, with traditional kinship ties based on patron-client, owner- sharecropper relationships. The tribal society was typically characterized by relatively autonomous administrative and social norms, with primary dependence for livelihood on forest resources supplemented by shifting cultivation or rotational farming. Concepts of non-gwnership an'd communal property were prevalent in the tribal value system. 2. Development of the Singrauli area began during the 1950's with the construction of two dams to form the Rihand and Obra reservoirs, and of hydropower stations by the Department of Irrigation of Uttar Pradesh. The hydro-electric plant at Obra has an installed generating capacity of about 100 MW. The Rihand Reservoir cuts across both U.P. and M.P. state boundaries, and occupies an area of approximately 460 m2. It is a major source of water for coal mining, power generation, ancillary industries, human consumption and other related activities. The installed capacity of the Rihand hydro-electric plant is 300 MW. Most of the industrial and mining activities in the region are concentrated around the Rihand reservoir. 3. The construction of power plants attracted industries to the area. The Hindalco aluminum plant and the Kanoria chemical plant were established in the vicinity of the Rihand dam in 1962 and 1964 respectively. A cemeht plant owned by U.P. was established at Dala, near the Obra reservoir in 1970. Water flow, however, proved inadequate for supplying energy to these industries. The construction of the Renusagar thermal power plant on the northern shore of the Rihand reservoir was primarily in response to the need for a new power source for the Hindalco aluminum plant. 4. The 1970's also witnessed the acceleration of mining activities in the region. The Singrauli coalfields,located north-west of the Rihand reservoir are one of the largest coal mines in the country. Two mines were in operation when the area was initially developed. With the progressive discovery of large coal reserves (currently estimated at 10,850 million tons), the Indian Government decided in the mid 1970's to expand energy production based on coal and transmit power for national needs. In 1975, the newly founded National Thermal Power Corporation began the construction of large coal-fired power generating stations that would supply electricity to the north and western parts of India. Four thermal power plants were established between 1982 and 1990 with the installed capacity of the region totalling 6760 MW in 1990. 46 Details of the power plants are noted below: *Singrauli, the first super thermal power station was built between 1982 and 1984 with a capacity of 5x200 MW. Two larger units of 500 MW each wera added in 1986 and 1987. *The Vindhyachal power plaut (4x210 MW) was commissioned between 1987 and 1990, and is located on the north western shore of the reservoir. * The Rihand power plant (2x500 MW) was commissioned between 1989 and 1990 and is located on the south of the reservoir. * The Uttar Pradesh State Electricity Board also expanded production capacity by establishing the Anpara power plant consisting of thre6 210 MW units commissioned in 1986, 1987 and 1988 respectively. 5. The Singrauli coalfield has twelve mines of,which seven are operational, two in the start-up phase,.and three u1nder preparation. The coalfield contains an estimated reserve of 10,850 million tons, enough to fulfill fuel requirements to generate 20,000 MW for the next 130 years. The fact that coal reserves can provide fuel to several additional power plants and thi high demand for electric power in India have led to increasing pressure for further expansion and development in the area. 6. The acceleration of industrial activities in the 1970's and 1980's has induced population growth, primarily due to large-scale migratory movements into the region (Table Al). This has significantly altered the region's socio-economic context. Currently, an estimated one-third of the total population (approximately 700,000), is made up of migrants. Often possessing better education/skills than the locals, migrants have tended to compete more successfully for salaried employment vis-a-vis the local population and hence considerable employment-related tensions have arisen between these two groups. The migrants fall into three main groups: permanent employees in industry and the service sector, casual workers living chiefly in shanty towns and rehabilitation colonies and small tradesman. Table Al: Growth of Population per Decade. 19714!00 Pop.1971 Pop.11 p19pl Pop2001 1991 - 200 (*eraus annual growth ralt -%)_ Core Area 74,641 141,9 450,606 1,046217 8.7 Singraull 234,318 347,580 696.329 1,394.956 7.1 RegionIIIII SoUIe Singraull Regional Development Plan, Phase 1, TCPO, 1990 (based on 1981 cenmus figures). 7. The establishment of industrial enterprises led to the creation of project townships to house the permanent employees of the industrial and mining sector in the area. Currently 13 in number, these townships are planned settlement areas built by the industries/corporations themselves, and 47 are provided with basic infrastructure and services such as schools, water supply, electricity, hospitals etc. Approximately 35 percent of the population in the region live in these project townships. People living outside the project township live in generally unplanned settlements with little access to basic services. Lack of public facilities and welfare benefits, low wages as casual laborers (in small private industries) and high unemployment implies that almost everything that is earned is spent on daily survival. 8. The immediate effects of the setting up of industrial facilities has been population displacements. The construction of the Rihand reservoir in the 1960's, resulted in the large-scale displacement of people from the Rihand Valley. The Electricite de France (EdF) study, "Environmental Study of the Singrauli Area," estimates that approximately 44 percent of the people in the core area in the 1960's were displaced during its construction. This had an immediate impact on the surrounding hills and their tribal inhabitants. The resettlement of the displaced people was poorly planned, resulting in 1knd grabbing and forest cliarance around the reservoir and In the hills. Occupation on larger, more fertile tracts was usurped by the more powerful upper caste project affected persons, while tribal populations and lower castes were forced to retreat into more marginalized and erodible uplands less suitable for agriculture. One consequence was a decrease in forest area access with a decline in productivity of forest land upon which the livelihood of the original tribal inhabitants depended. Estimates of those displaced during the construction of the Rihand reservoir and by other industrial and mining activities, range from 100,000 to 200,000 persons. A large percentage of the local population displaced during land acquisition for development, have been resettled in substandard conditions where inhabitants of several villages are co-mingled. While the economic prospects of many of the resettled population has improved, several resettlement colonies are becoming centers of strong discontent primarily due to unemployment, poor access to basic services, and the loss of social identity as a res-ilt of social destabilization. The issue of resettlement is a complex one involving land use regulations, employment opportunities, property rights, compensation, and having social, ecological and economic consequences. 9. Since 1971, the overall land use pattern of the region (particularly around the core area of the Rihand reservoir) has undergone considerable change following the large sale concentration of economic activities such as coal mining and power generation. These developments have heightened the competition for the acquisition of land for industrial purposes vis a vis forested and agricultural land. Along with the loss of forested areas,1 has been a shrinkage in productive agricultural land and the capacity of the population to earn a living from agriculture. The effects of this are unclear but it is likely they have been significant. According to 1981 census estimates, agriculture, small trading activities and day labor were the I A study on Area Reforestation and Watershed Protection (see Appendix D for additional details) indicates that forested areas around the Rihand reservoir are currently well-stocked, but industrial activities (both future and planned) are degrading this resource rapidly. 48 primary occupation for 88 percent of the region's active population, while 12 percent were employed in coal mines, power plants and large and medium industries. 10. Singrauli is a complex mix of several socio-economic groups with varying income levels and cutting across urban-rural boundaries. A representative sample of this is provided in the Table A2. It is estimated by EdF that further industrial and urban growth in the core area will lead to a marked reduction in the percentage of self-sufficient peasants and of peasants who sell their own produce. Some of these people will join the ranks of "semi- well-off" urban wage earners, but more probably most will become part of the urban poor and the marginalized. TableA2* SooloEconomic aseiadCoA Ceeges Pasntg . poor' *47 urban, well off 15 urban, migrant, wage earning 4 aff-sufficient peasants 21 farmers and market gardeners 14 * This category consists of the lower ranks of employee in the Industrial sector, Including permanent employees those who have not escaped poverty, people who have been urbanized for a long time but who have fallen on hard times, rural poor and marginalized groups. Source: Adapted from 'Environmental Study of Singraull Area.' Main Report, Vol.2, Ch.3, Soclo-Economics, NTPC, January 1991, prepared by Electricite de France. 11. Power and coal development and rapid population growth have created environmental management problems. They have lead to pollution, and have generated increasing demand for land and for infeastructure and services such as water supply, housing and electricity. This has exerted tremendous strain on the environment, the infrastructure base and the local institutional capacity. Key management, planning and development issues that have arisen include: a deteriorating physical environment (deforestation, air and water pollution); infrastructure and service deficiencies; inadequate resettlement and rehabilitation programs; land constraints and uncoordinated land use planning; slum development; and a weak institutional base. 49 APPENDIX B. EdF SUMMARY TABLES OF ENVIRONMENTAL FACTORS AND MITIGATION MEASURES 1. Attached are the tables from the EdF study "Regional Environmental Assessment of the Singrauli Area," on environmental mitigation measures and strategies recommended for the Singrauli core area. For these recommendations, EdF subdivided the core area into a dozen study zones (see Figure Bl). The three scenarios H0, H, and H2 referred to in the tables correspond to scenarios 1,2, and 3 as defined in the body of this paper. Table Bl: Mitigation measures for pollution emissions from thermal power plants and industries Table B2: Recommended Strategies for improving Water Quality Table B3: Recommended Strategies for improving Air Quality Table B4: Recommended Strategies for problems associated with Land Use Table 35: Recommended Strategies for problems associated with Water Use Table B6: Recommended Strategies to address Forest Degradation and the degradation of Aquatic Resources Table B7: Recommended Strategies for problems associated with Socio-Economic Issues Table 88: Recommended Strategies for addressing Public Health problems. Table B9: Recommended Strategies for addressing noise pollution 3 50 44 FIUE - Elmntr Suy oe 51 Indusry Parameters exceeding standards Mitigating measures SINGRAUU Total Suspended Solids in overflows power plant from : * Existing ash pondo * Improve current operation - change input location . skimmer wall at the outlet * Fly ash to be sent to new ash pond when existing ash pond completely saturated. * Other effluents * Construction of settling ponds Township waste wate * Improve waste waters treatment plant Cooling waters temperature rise * More indepth study * Dilution of cooling water if proven impact. To be mentioned : dust at coal * Improve dust extraction and water spraying. handling plant. VINDHYACHAL. NOx 0 Reduce air excess in boilers power plant (critical for EEC standards, no Indian standards) Dust stack emission T Monitoring * Improve ESP efficiency * if required, suitable additional process. Township was*e waters - Commissioning of sewage treatment Plant waste waters (Total suspended solids) * Settling ponds to be built To be mentioned: ash-slurry leakage * Improvement of pipes network maintenance RIHAND Dust stack emission * Monitoring power plant * Improve ESP efficiency * If required, suitable additional process. Cooling waters temperature * D. in of cooling water rise * Improvement of waste waters treatment Township waste waters plant Total Suspended Solids * Improve current operation Ash pond overflow* * Ash-pond saturated: fly ash to be sent to new ash-pond Table Bl. Mitigating measures proposed for existing industries in order to meet Indian or International standards. Reference situation scenario Ho (1989-1990) Mitigating measures are only proposed to comply with standards although impact on environment has not been found to be deleterious. - 52 Indusry Parameters exceeding standards Mitigating measures RENUSAGAR Fugitive dust emissions * Improvement of coal handling operations power plant (dedusting facilities). * Water spraying. Waste water effluents: * Settling ponds (Total suspended solids) Ash-pond outlet : Fluorine * Increase blow-down Townships waste waters * Implementation of a domestic effluents treitment plant. To be mentioned : coal and dust waste * Improve maintenance and operation and from rope way water spraying at loading point * Avoid buckets overloading ANPARA Dust * Monitoring power plant (Stacks) .* Improve ESP efficiehcy * If reqdired. suitable additional process. Township waste waters * Commissioning of the water treatment plant Cooling water temperature * Dilution of discharged water if proven rise* impact. HIMDALCO Fluorine gaseous emissions * Dry scrubbing system and collecting aluminium plant hoods. Dust: old boilers * Avoid using old boilers or make revamping with ESP. Fluor in waste water * Improvement of fluoride removal system. To be mentioned: muds dumps * Retention dyke. KANORIA Hg release Change process of waste water treatment chemical plant . plant. Pesticides HCH * Improve primary treatment of waste water. Oil * Install oil separators and sand filters. Chloride (?) * Collect magnesium chloride Total Suspended Solids * Improvement of settling ponds To be mentioned: * Storage of pesticides in proper shelters Open sky storage of pesticides Table B1 (contd) : Mitigating measures proposed for existing industries in order to meet Indian or International standards Mitigating measures are only proposed to comply with standards although impact on environment has not been found to be deleterious. 53 Industry Parameters exceeding standards Mitigating measures HI-TECH Carbon No comment COALMNES NOx * Exhaust control of mining engines - Electrical equipment Dust: * Overburden dumps * Alteration of process: construction in terraces (banks and benches technics) * Blasting * Improvement of operation o Haulage * Increase water spraying Waterquality:* * SPM (erosion of overburden * Use benches and banks technics with dumps). drainage network and sealing ponds. *pH water * Settling tanks and pH adjustment. of pi water * SPM J Land reclamation * Use benches and banks technics. To be mentioned: seen an ban: teracs Noise, vibrations from blasting * Improvement of blasting operations DALA-CEMENT Dust: * Stacks emissions * Plant-design and operation to be re- - Fugitive emissions OBRA Dust : * Use of coal with low ash content * Stack emissions * Implementation of efficient ESP Table B1 (contd) : Mitigating measures proposed for existing industries in order to meet Indian or Intermational standards Mitigating measures are only proposed to comply with staidards although impact on environment has not been found to be deleterious. 54 MAIN SOURCES OF RECONN DED STRATEGY SCE1ARIO o PARAMETER CRMCA.ZONES PROBLEM (*HIGH COST) Ground water Open well faecal All zones Human * Protection of wells, contamination promote hand-pumps. * Water supply scheme to urban area (to be combined with septic tanks or sewage systems) Mercury contamination VI Not identified * Change water supply of w-lls (water supply scheme)e Sporadic cadmium VII Not identified * As above contamination of wells Fluorine VII (Vicinity Ash ponds * Improve ash pond contaminations of ash ponds) operation * Change water supply .11 Not identied (water supply scheme) (To be mentioned dulphates and boron VII Ash ponds * Does not require change in not critical) (Vicinity of ash ponds) . water supply * Surface water Pesticides HCH X, XI, XII Kanoria Chemicals * Improve primary treatment I of waste water' Mercury X, XI. XII Kanoria Chemicals and * Change waste water possible other sources to creatment process of be identified KanoriaI River faecal VII Urban waste waters * Avoid bathing : use septic contamination tanks or improve treatment plant Overall pollution VII Coal mines and urban * Settling tanks at coal (organic load, waste waters mines nutriments) Septic tanks, treatment planES* Dissolved oxygen X, XI Natural organic load from * Unavoidable (two levels (Rihand downstream Rihand drainage basin and outlet system at the dam from GBPS reservoir) rural waste waters urban to be examined) Pesticides DDT VI, XII Mosquito control * Ban use of DDT programs (probable) (To be mentioned Suspended solids XII Natural soil erosion * Hardly avoidable (eramine not critical) management of upstream drainage basin) Fluorine II, Vll Overflow from ash ponds * Hardly avoidable Trace elements: (Vicinity of ash-ponds) * BacAfilling to the mines* Cd, N, As. Se on long term iffeasible Table B2: Water Quality - Critical parameters, sources most responsible for criticality and recommended strategy. 55 SCENARIO HI MAIN SOURCES OF RECOMMENDED STRATEGY (AddPARAMETER CRcAL PROBLEM (OIGH COST) *Ground water Fluorine 11/111 Ash ponds * Improve ash pond contami.ations (Vicinity of new ope+ation ash ponds). * Change water supply ._ (water supply scheme) (To be mentioned Sidphates and boron II, Ill. VII Ash ponds Does not require change in not critical) water supply * Surface water Overall pollution III, VII Increase of urban waste * Septic tanks (organic load, waters * Treatment plants' nutriments Dissolved oxygen X, XI Increase of urban waste * Septc tanks (Rihand downstream waters and of organic load * Treatment plants* from GBPS reservoir) in Rihand lake. * Two levels outlet at the dam to be examined (To be mentioned Fluorine 11, I. VII Overflow from ash ponds * Unavidable not critical) Trace elements: * Backfilling to the mines* Cd. Ni, As, Se on long term iffeasible SCENARIO H2 MAIN SOURCES OF RECOMNDED STRATEGY (Add) HPARAMTER CR CAL ZONES PROBLEM ('HIGH COST) (Add.) PROBLEM _ _ _ _ _ _ __o * Ground water Fluorine II. IV. VII. IX. XIII Ash ponds Improve ash pond operation contaminations (Vicinity of ash ponds) Change water supply (water supply scheme) To be mentioned Sulphates and boron II. IV. VII, IX, XIll Ash ponds Does not require change in (not critical) (Vicinity of ash ponds) - water supply * Surface water Overall pollution II, IV, VI, VII, VIII Increase of urban waste * Septic tanks (organic idad waters , Treatnent plants" nutriments) Dissolved oxygen X, XI Increase of urban waste * Septic tanks S(Riland downstream waters input to the lake. * Treatment plants* from GBPS reservoir) * Two levels outlet at the dam to be examined* To be mentioned Fluorine II. IV, VII. IX, XIll Overflow from ash ponds * Unavoidable not critical Trace elements: (Vicinity of ash ponds) * Bacfilling to the mines' * Cd. Ni. As. Se Table B2 (contd): Water Quality - Critical parameters, sources most responsible for criticality and recommended strategy. (Add. = additional impact to previous scenario). 56 SCENARIO . PARAMEER CRCAL ZONES MAIN SOURCES OF RECOMMENDED STRATEGY SCENARIO PARMEEPROBLEM (*IGH COST) NOx VII. VIII * Coal mines * Improve mining . * Vindhyachal power eqtupment plant * Enforce regulation * Domestic pollution * Reduce air excess at * Road araffic Vindhyachal. HO Dust VI. VII. VIII. XI * Coal mines * Improvement of coal -. -mines operations: - blasting - overburden dumps * Domestic pollution * Alternate fuel -4 gas or electricity' , Smokeless chulas * Better location of dwelling * Soil erosion * Setter land management * Traffic * Improvement of road network' SO2 VII, VIII. X * Power plants : Singrauli * Plant operation, or XII Vindhyachal, Renusagar* * Low sulphur fuel, Anpar.L * Coal mines NOx VI, VII, VIII * Coal mines * Improve mining * Vindhyachal equipment * Domestic pollution * Reduce air excess at * Traffic Vindhyachal HI Dust VI, VII. VIII, XI * Coal mines * Improvement of coal (Add.) mines operations: - blasting - overburden dumps - deshaling plants * Domestic pollution * Alternate fuel -+ gas or electricity * Smokeless chulas * Better location of dwelling ares * Erosion of barren land, * Land management urbanization * Green belts. * Traffc * Improve road network' * Power plants * Improve operation * Improve ESP efficiency Table B3: Air Quality - Critical parameters, sources most responsible for criticality and recommended strategy. (Add. = additional impact to previous scenario). 57 MAIN SOURCES OF RECOMMENDED STRATEGY SCENARIO * PARAMETER CRMCALZONES PROBLEM (offGH COn SO VI, VII, VIII, *Power plants: * More detailed study IX, X, XII Singmuli. Vindhyachal. LIMB. plant operation, Anpara, Renusagar. FGD*. taller stacks% low - Rihand sulphur coal, C.F.B * Coal mines boilers' NOx VI, VII, VIII, XII * Coal mines * Improve mining * Domestic pollution equipment. * Power plants De NOx by optimizing . Air staging* * Low NOi burner H2 Dust VI, VII, VIII, XI * Coal mines * Improvement of coal (Add.) mines operations: - blasting - overburden dumps - deshaling plants * Domestic pollution * Alternate fuel -+ gas or electricity' * Smokeless chulas * Better location of dwelling areas * Erosion of barren land, * Land management urbanization * Traffic * Improvement of road network* * Power plants * Improve operation * Improve ESP efficiency Table B3: (contd): Air Quality - Critical parameters. sources most responsible for criticality and recommended strategy. (Add. = additional impact to previous scenario). 58 MAIN SOURCES OF RECOMAENDED STRATEGY SCENARIO PARAMETER CRITICAL ZONES PROBLEM ("HIGH COSr) HO Disappearance of V, VI, VIII Industrial and urban * Aporoprit land agricultural land development (plant planning* townships, ash disposal * Reduction of curface areas...) occupied by plants * Backfilling of mines by ash' on long term if feasible. Power corridors II, III, IV, V, IX Power transmission,. Appropriate land planning through forests Sterilization of land VII, VIII Overburden dumps, ash* Unavoidable (coal mine and red mud disposal :managernern) areas. *Dcdhn amu. *Backilling Land availability III, VI, VII, VIII, X Size of forests, industrial * Appropriate land planning development. HI Disappearance of II, III, VI, VII Industrial and urban * Appropriate land planningi agricultural land development (townships, * Backfilling of mines by (Add.) ash ponds) ash if feasible Sterilization of land VI Overburden dumps * Hardly avoidable Ash and red mud disposal * Coal mine management' areas. * Backfilling into mines Land availability III, VI, VII, VIII, X Industrial development * Appropriate land planning H2 Disappearance of IV, V, VI, IX Industrial and urban * Appropriate land agricultural land or XM development (plants, planning' townships, ash ponds) * Reduction of surface occupied by plants - Backfilling of mines by ash' if feasible Sterilization of land VII, VIII, VI Overburden dumps, ash * Unavoidable disposal areas. * Coal mine managemento * Backfilling into mines Land availability III, VI, VII, VilI. X Industrial development * Appropriate land planning Table B4: Land Use * Critical parameters, sources most responsible for criticality and recommended strategy. (Add. = additional impact to previous scenario) 59 I MAIN SOURCES OF RECOMMENDED STRATEGY SCENARIO PARAMETER CRTCAL ZONES PROBLEM (HIGCH COST) HO Potable water supply I, II, IV, V, VI Population growth * Water supply from Rihand reservoir in zones V and VI * Hand pumps in rural areas ' Irrigation I, II, IV, V, VI, XIII Climatic conditions and * Improve Kanchan reservoir local geology management * Irrigation tanks * Pumping in Rihand reservoir (To be mentioned Sporadic low discharge X. XI. XII Climatic conditions * Unavoidable but appro- not critical) of upstream Rihand (drought) priate Rihand reservoir management Rihand reservoir XII Sedimentation in the * Upstream drainage basin storage capacity reservoir (mainly natural) management' (hfe expectancy : 350 years).. N1 Potable water supply I, II, IV, V, VI Population growth * Water supply from Rihand reservoir in zones V and VI and for new service towns * Hand pumps in rural areas. Irrigation I, II, IV, V, VI. XIII Climatic conditions and * Improve Kanchan reservoir local geology management * Irrigation tanks * Pumping in Rihand reservoir* (To be mentioned Sporadic low discharge X, XI, XII Climatic conditions * Unavoidable but appro- aot critical) of upstream Rihand (drought) priate Rihand reservoir I_____________ ________________ management Rihand reservoir XII Sedimentation in the * Upstream drainage basin storage capacity reservoir (mainly natural) management' (lfe expectancy : 350 ___years). H2 Potable water supply I, II, III, IV. V, Population growth * Water supply from Rihand VI, XIII reservoir in zones V and VI and for new service towns * Hand pumps in rural areas. Irrigation I, II. IV, V, VI, XIII Climatic conditions and * Improve Kanchan reservoir local geology management * Irrigation tanks* * Pumping in Rihand reservoiro (To be mentioned Sporadic low discharge X, XI. XII Climatic conditions * Unavoidable but appro- not critical) of upstream Rihand (drought) priate Rihand reservoir management Rihand reserv-ir XII Sedimentation in the * Upstream drainage basin storage capacity reservoir (mainly natural) management* (life expectancy :350 L _years). Table B5: Water Use - Critical parameters. sources most responsible for criticality and recommended scrategy. 60 SCENARIO H* PAMUEER CRMCALZONESZ . MAIN SOURCES OF RECO&DAENDED STRATEGY PROBLEM (HIGH COST) Forest degradation I, ii, viI, VIII Overgrazing Largely inavoidable ix, X, XIII (comprehensive *.e - .alprogramme comprising: Trr caule grazing camps protection of forests) Wood collection for fuel * Supply alternate fuel' Pesticides contamination of crops: by DDT VI Likely mosquito and pest * Ban DDT control programme by * Combine use of pesticides pesticides with other practices, to HCH VII.XI control malaria (rand management). * Aquatic Decrease of fisheries XII * Various assumptions * Further study to be carried mesources to be examined: out before decision * Reduction of * Hatcheries to be developed spawning areas * Fishing practices to be * Fish population modified. unbalanced Sediment and fish contamination by: * Mercury XII, X, XI Kanoria Chemicals * Change waste water treatment processes * Fluorine X. XI Hindalco * Dry scrubbers * Pesticides X. XI, XII Kanoria Chemicals * Change waste water treatment processes Mosquito control * Combine use of pesticides programme with other practices to control malaria. Table 36: Ecology - Critical parameters, sources most res-;ansible for criticality and recommended srategy. . 61. sENuo ifl PARAMEER CRmICALZON MAIN SOURCES OF RECOMMENDED STRA`GY (Add.) ! P PROBLEM (HIGH COST) Terrestrial Increase of forest I. 11, VII, VIII Overgrazing * Largely unavoidable degiadation IX, X, XIII (comprehensive programme comprising: - cattle grazing camps * protection of forests) Wood collection for fuel * Supply alternate fuel* Increase of sediment and fish contamination Hindalco by: Aquatic fluorine X, XI Increase 6f mosquito * Combine use of pesticides control programme with othey practices to pesticides X, XI. XII impacts contl malaria. SCENARIO H2 PARAMETR CRMCALZONE MAIN SOURCES OF RECOMMEDED SRATEGY (Add.) PROBLEM (HIGK COST) T*rrestrial Forest degradation III, IV, V, VI. XIII Overgrazing * Unavoidable (comprehensive programme comprising: - cattle grazing camps - protection of forests) Wood collection for fuel * Supply alternate fuel* Reducdon of forest .III, IV, VI Coal mines, ash ponds, * Unavoidable arem power lines corridor Aquatic Pesticides X, XI, XII Increase of mosquito * Combine use of pesticides control programme with other practices to impacts control malaria. Table B6 (contd): Ecology - Critical parameters, sources most responsible for criticality and recommended strategy. (Add. = additional impact to previous scenario). - 62 MAIN SOURCES OF RCOMMNDED SlTAY SCENARIO PARAMETER CRTCALZONES PROBLEM *IGH OTA Population III, VI, VII Industrial and urban * Land management displacement developments - location of plants, townships, ash-disposal a,W - ra... .- - reduce land acquisition for new plants - avoid green belts when displacing people * Revise M?P SADA project Rehabilitation M, VII. VIII Adequacy of practices and * Land management location of resettlement proper selection of the areas location of rehabilitation areas. , U.P. SADA to be more active. * Provide appropriate facilities (water, power. sewers, school, dispensary. ._ __transport...) Ho Slum III, VI, VII, X Anrival of migrant *o Improve receiving population facilities Unemployment III, VI, VII, X Arrival of migrant * Problem not specific to population the Singrauli zone. Disappearance of * Diversified indust-ali- agicultral land zaion. Conflicts between loca) III. VI, VII, X Arrival of migrant * Training facilities for local and migrant population people. populations Insufficient area for VII, VIII Resticted access to forest * Hardly avoidable (increase catle grazing of population and protect- ion of forest) * Cattle grazing camps. Reduced incomes from VII, VIII Restricted access to forest * Altermate fuel* forest products (fuel, by-products) Transport connection, III. VII, VIII Inadequacy of: * Corresponding facilities communication means * road netwod improvement* * telephone facilities * transport facilities HI Population III, VII Industrial and urban * Land management (AMd.) displacement developments location of townships, Rihand and Vindhyachal -ash-ponds ash-ponds -avoid green belts when displacing people Rehabilitation III, VII Adequacy of practices and * Land management, proper - location of resettlement selection of the location of rehabilitation areas. * Provide appropriate facilities (water, power. sewers, school dispensary. __ __ __ _ transport...) Table B7: Socio-economics - Critical parameters. sources most responsible for criticality and recommended strategy. (Add. = additional impact to previous scenario). 63 SCENARIO PARAMETER CRITCALZONES MAIN SOURCES OF RECOMMENDED STRATEGY PROBLEM ( GH COST) HI Slum III, VII Arrival of new migrant * Adequate receiving (Cont'd) population facilities - Unemployment III, VI, VII Increase of population * Problem not specific to the Singrauli zone. Conflicts between III, VI, VII Likely to increase due to * Training facilities for local local and migrant new migrant population people. populations and new oustees. Transport connection, IM, VII, VIII Inadequacy of: * Corresponding facilities communication means * road network improvement and * telephone, telex development' facilities * transport facilities Population II, 1II, IV, V, VIII, Industrial and urban * Land management displacement IX. XIII developments location of plants, townships, ash-disposal area... * reduce land acquisition of plants - avoid green belts when displacing people H2 Rehabilitation III, IV, VII, VIII, IX Adequacy of practices and * Land management location of resettlement proper selection of the (Add.) areas location of rehabilitation areas. * Provide appropriate facilities (water, power, sewers, school dispensary. _ ___transporL..)' Slum III, IV, VI, VII, Arrrival of migrant * Adequate receiving VIII. DC population facilitics Conflicts between III. IV, V. VI, VII Likely to increase due to * Training facilities for local local and migrant VIL, IX, X new migrant population people. populations and new displaced population. Insufficient area for III, V, VII, VIII Restricted access to * Hardly avcidable catle grazing forests. (increase of population * Cattle grazing camps. and protection of forest) Transport connection, I, VII, VIII Inadequacy of : * Corresponding facilities communication means * mead network improvement and * telephone, telex development' facilities * transport facilities Table B7 (contd): Socio-economics - Critical parameters, sources most responsible for criticality and ecommended strategy. (Add. = additional impact to previous scenario). 64 MAIN SOURCES OF RECONMENDED STRATEGY SCENARIO PARAMETER CRITICALZONES PROBL-M (*HGH COST) Ho Malaria All zones Mosquitoes * Mosquito control Appearance of chloroquine programme resistant species - reduction of spawning areas, * pesticides Traffic accidents VI. VII, X. XI Mixing of different types * Poad network of traffic. .. inprovement" Illegal shops and * Land planning dwellings on main roads. * Improve hospital facilities Water borne diseases All zones Contamination of wells * Encourage hand pumps. HI Traffic ac-idents VI. VII, X, XI Mixing of different types * Road network of raffic. improvement Illegal shops and * Land planning dwellings on main roads. * Improve hospital facilities Malaria All zones Mosquitoes * Mosquito control programme Water borne diseases All zones Contamination of wells * Encourage hand pumps. H2 Traffic accidents IV, VI, VII, X. XI Mixing of different types * Road network of traffic. improvement Illegal shops and * Land planning dwellings on main roads. * Improve hospital facilities Malaria All zones Mosquitoes * Mosquito control programme Water borne diseases All zones Contamination of wells * Encourage hand pumps. Table B8: Public Health - Critical parameters, sources most responsible for criticality and recommended strategy. 65 SCENARIO PARAMETER CRITICALZONES MAIN SOURCES OF RECOMME14DED STRATEGY PROBLEM (-HIGH COST) HO High frequency noise - M. VII Power plant control * Low level noise safety sporadic valves valves * Silencers * Multihole orifice plate * Insulation Backgtund noise III, VI, VII. X, XI Road traffic * Reduce use of horns * Improvement of road network * * Green belts * Land management* Railroad traffic * Land managcmcnt* * Noise screens* * Green belts Blasting impact VI, VII, VIII Coal mine blasting * Improvement of blasting (noise + vibration) operation. HI Background noise III, VI. VII, X. XI Increased road traffic * Improvement of road (Add.) network* * Land management * Green belts * Noise screensO Increased railroad raffic * Land margement* * Green belts * Noise screens* Blasting impact VI, VII, VIII Additional coal mine * Improvement of blasting noise + vibration activity operation. H2 Background noise M, IV, V. VI. Increased road traffic - Improvement of road (Add.) VII. X, XI network* * Land management* * Noise screens* * Green belts Increased raihoad traffic * Land management * Noise screens* * Green belts * Improve railroad .._equipment Table B9: Noise. Critical parameters, sources most responsible for criticality and recommended stategy. (Add. = additional impact to previous scenario). 66 APPENDIX C. WORLD BANK PROJECTS IN THE SINGRAULI REGION 1. The Bank Group's involvement in the development of the Singrauli area consists of five lending operations in the coal and power sectors totalling approximately US$ 882 million. The Bank is also providing assistance (2.4 million loan - loan #2797-IN) for urban infrastructure and services in one area town (Shaktinagar) under the Uttar Pradesh Urban Development Project. One power project is currently in the pipeline with an estimated loan of US$ 300 million. It is also possible that pollution mitigation in Singrauli coulz be financed from the ongoing India Industrial Pollution Control Project (Loan # 3334-IN, US$ 124.0 million). This project supports GOI's efforts in.identifying and implementing a cost-effective program for iidustrial pollution monitoring, control and abatement. In Addition to the Bank Group, bilateral organizations have financed power and coal projects in the region.. These include: the Rihand Thermal Power Plant and Amlohri coal projects which were financed by the U.K., Vindhyachal Thermal Power Project by the former Soviet Union, and Anpara B (extension to the existing power plant) by Japan. COMPLETED BANK PROJECTS * Singraull Thermal Power Project (Credit 685-IN. approved April 1977, completed June 1984. US$ 150 million) Proiect Obiective 2. The Singrauli Thermal Power Project was the first of a series of thermal power stations to be established in the Singrauli region. The 2,000 MW power station was installed on the fringe of the Rihand reservoir adjacent to the coal fields in Uttar Pradesh. 3. Specifically, the project involved: i) civil works including acquisition of land, construction of roads, culverts, railways and other miscellaneous preliminary works, power station and residential buildings, plant foundations, dams, canals, ducts and other works associated with the circulating water system; (ii) three 200 MW turbo-generating units; and (iii) the 400 kV (kilovolt) transmission system Proiect Execution 4. The project was executed satisfactorily, but because of an initial delay in the award of contracts for the major components, all three generating units were commissioned later than originally planned. 5. Technically, the project, as designed and implemented, complied fully with the environmental quality standards prescribed by the Indian National Committee on Environmental Planning. The stacks feature electrostatic precipitators; the cooling ponds' shape and size are such as to 67 limit adequately temperature increases in the water; and the ash is disposed of in an entirely banded area in the lake. 6. At the time of initiation of the project, no ecological problems were envisaged. However, the project has given rise to some resettlement problems. A number of people who had already had to move during the construction of the Rihand reservoir, had to move a second time as they lived in areas required for coal mines and power plants. The Project Completion Report for this project conclude that most property owners had been fairly compensated, but people without land seem to have suffered. * Second Singrauli Thermal Power Project (Credit 1027-IN aproved May 1980. completed June 1989. US$ 300 million)) 7. This project supported the second phase development of the Singrauli plant. The two main objectives of the project were: (i) to provide the NTPC assistance to construct two 200.MW and two 500 MW coal-fired thermal power generating unips as the second state of NTPC's Singrauli thermal power project; and (ii) to assist the Government of India (GOI) in achieving its objective of further advancing the regional and national integration of the power sub-sector. 8. The project was designed to comply with the applicable environmental quality standards prevalent in India at that time. 9. The implementation of the project, including the expansion phase of 1,400 MW, required the acquisition of 1,901 hectares resulting in compensation of 1,450 families in 15 villages and their relocation to a resettlement colony. Part of t'- required area, located at about 8 km from the plant, was needed for dumping the ash. A limited number of shops were allotted to project affected persons in the NTPC shopping complex. NTPC has Also provided amenities in the relocation colony including medical facilities. However, public health is increasingly deteriorating in the resettlement colony, partly as a result of a larger squatter settlement, which has grown around the area. While limited numbers of people were given employment and on-the-job training by NTPC, and employed through various contractors working for the project, no employment opportunities have been provided to a majority of the people affected because of their low level of skills. NTPC has taken appropriate measures with regard to stack emissions and water effluents. It regularly monitors these aspects of environmental protection and, so far, fully complies with environmental quality standards prescribed by the Government. In addition, through a continuous afforestation program, a large number of trees of various species have been planted and this will be expanded in the future, notably in order to rehabilitate the ash pond area. 10. As a result of problems encountered, and experience gained in Singrauli, as well as in other projects, the Bank has encouraged NTPC to become more aware of the complexities associated with environmental and resettlement issues. NTPC has prepared an Environmental Action Plan (EAP) addressing aspects that requires: (i) preparation of Environmental Impact Assessments for existing and future projects; and (ii) resettlement and reforestation plans. In Singrauli, an element of the EAP is the Regional 68 Environmental Impact Assessment (EIA) financed by the Bank and carried out by Electricite de France (Please refer to Appendix D for details of the study). The recommendations of the study will be incorporated into the EAP. ON-GOING PROJECTS * Rihand Power Transmission Project (Loan 2555-IN approved May 1985. estimated completion December 1992. USS 202 million) 11. The objectives of the project are to : (1) continue institutional building of NTPC and the Central Electricity Authority (CEA); (2) assist NTPC in meeting the electricity demand in the Northern Region by providing a linkage between Singrauli and Rihand thermal power plants and the main load centers in the region; (3) introduce HVDC technology; and (4) through a transmission study, contribute to the rationalization of the transmission development in the country. 12. The project comprises: (a) a 500 kV HVDC line of about 910 km connecting Rihand and Delhi and the associated AC/DC converting stations fo;r an initial capacity of 1,000 MW; (b) about 1450 km of 400 kV single and double circuit AC line connecting the Rihand and Singrauli stations with Kanpur, Delhi, Panipat and Jaipur and related substations; and (c) technical assistance for the engineering, testing and commissioning of the project. The project is co-financed with Sweden and EXIM Bank of Japan. The project is currently under construction. No significant ecological and resettlement and rehabilitation problem has been identified. The project is expected to close in December 1992. 0 Uttar Pradesh Urban Development Proiect - Shaktinagar Component (Loan 2797-IN approved February 1984. estimated completion March 1995, US$ 2.4 million) Background 13. Once a cluster of 18 villages on the banks of the Rihand Reservoir, the Shaktinagar area located in the Mirzapur district of Singrauli (Uttar Pradesh), now has a thermal power plant and coal mining activities. It comprises ar, area of 4752 acres and had an estimated population of 80,000 in 1990. The urban population of the Shaktinagar area is expected to increase from the present 20 percent of the total urban population of Mirzapur district to about 50 percent by the year 2001. In addition to environmental degradation due to heightened industrial and coal mining activities, the area has also witnessed unplanned and haphazard growth. Along with a project township that houses the employees of the thermal power plant, there are resettlement colonies and several unorganized slum areas, lacking infrastructure and basic services. The Government of Uttar Pradesh created a Special Area District Authority (SADA) to plan and undertake area development. 69 Project Objectives and Execution 14. The Uttar Pradesh Urban Development Project identified a number of urban areas that could benefit from an enhanced program of investments. The Shaktinagar urban area was among those that was targeted by the project for investments in slum upgrading, sites and services, water supply, drainage, low cost sanitation, and traffic engineering and management. A planning unit under a chief regional planner would be set up in the SADA during the project period to assist in developing a strategic plan, followed by an investment plan for the area. Project Imnlementation 15. Currently, the loan for the Shaktinagar component has not been disbursed. This appears to be due to the unwill.ingness of the State government to fund infrastructure provision in the region. It considers the problems of the area to be a Central g6vernment concern. * DudhichMA Coal Project (Loan 2353 - IN approved May 1984. estimated completion March 1993. USS 109 million) Background and Oblectives 16. The Dudhichua ;oalfield is located on the border of the states of U.P. and M.P. in the Singrauli region. The project consists of construction and start-up facilities for an open-pit mine and will provide the equipment and necessary infrastructure facilities to establish a production level of 5 million tons per annum. The project will also support institutional development of Coal India Limited in open-pit mining procedures, project management, budgeting and cost control. It will address important sectoral issues, related producer-consumer linkages, and coal transportation and distribution. While the project faces minimal technical and marketing risks, dust is an air pollution hazard. * Uttar Pradesh Power Projects - Obra Component (Loan 2957-IN approved June 1988. suspended April 1991. USS 31.1 million out of a total of USS 350.0 million) 17. In keeping with the objectives of meeting electricity demand in U.P. and effecting institutional, operational and financial improvements in UPSEB , the Obra component of the project consisted of the reinforcement of the coal handling systems at the 1,000 MW Obra "B" thermal power station in the Singrauli area including: the installation of an additional coal handling system of 1,000 ton/hour; and, the acquisition of 220 wagons for the transportation of coal from the coal mines. In order to protect the environment and ensure satisfactory working condition, several measures were to be undertaken including: a water spray arrangement to suppress the dust generated when unloading the coal from wagons and air supply fans to ventilate tunnels. The project was suspended in April 1991 because the project agency 70 (UPSEB) did not comply with the financial covenants and some components of the action proLram. PROPOSED BANK PROJECTS * NTPC Power Generation Project - FY 1993. Estimated loan US$ 400 million 18. The proposed project would comprise a time-slice of NTPC's least- cost investment program which currently includes up to eleven different coal and gas-based power stations. 2x500 MW each extensions of the Rihand and Vindhyachal power stations in the Singrauli area are part of NTPC's investment program and are expected to be included in the proposed project. Project .appraisal is expected to be in June 1992 and the project will be submitted to the Board for approval in late 1992 - early 1993. 71 APPENDIX D. STUDIES OF THE SINGRAULI REGION 1. ENVIRONMENTAL STUDY OF THE SINGRAULI AREA 1. This study was initiated in May 1988, by NTPC and undertaken by a joint partnership of the French companies Electricite de France (EdF) and Charbonnages de France (CdF), with work subcontracted to various partners. The study was financed from the proceeds of a World Bank loan (Singrauli Super Thermal Power Project, IDA credit 1027-IN) and cost about US$ 4.5 million. The terms of reference were established by NTPC and the World Bank and finalized through discussions between NTPC and EdF/CdF. A draft report was submitted to NTPC in July 1991, and approved by NTPC in March 1992. .Objec' -as 2. The principal objective of the study was to identify the environmental impacts of the various proposed and existing projects, with emphasis being given to the combined effects of power and mining projects, and to examine alternative ways to mitigate them. Special consideration was given to current and proposed power plants operated by NTPC. SGoRe 3. The study zone was defined as a band of 15 km around the Rihand reservoir. This area comprises the main industrial area, as well as most of the open cast mines under operation. In addition to the Singrauli power plant zone, the study also covers the 1,000 MW Rihand and 1,200 MW Vindhyachal thermal power stations, that are owned and operated by NTPC in this area. The area was subdivided into a dozen study zones for analytic purposes. Quantitative and qualitative analyses were undertaken in ten primary areas of investigation: land use, water use, soils, sediments, hydrology, water quality, meteorology, air quality, terrestrial and aquatic ecology and noise. Baseline studies were used to establish the current status; the impacts of future development were analyzed on the basis of three energy scenarios. In all three cases, main critical conditions were identified and appropriate strategies proposed to correct or abate critical environmental conditions with respect to air and water quality, land use, aquatic and terrestrial ecology and socio-economic conditions. Scenarios for Future Development 4. Three energy scenarios2 were used for analysis. The principal assumptions regarding power generating capacity, industrial production and area population are summarized below and in the following table: 2Scenarios 1, 2 and 3 described in this paper correspond to Scenarios Ho, Hl and H2 used in the EdF study. 72 Scenario 1: Reference situation. This situation gives the baseline status for all areas of investigation and was used to define existing critical environmental conditions in the Singrauli area. The principal assumptions plhce generating capacity, industrial production and coal production at 1990 levels. Scenario 2: Intermediate capacity growth. This scenario takes into account the implementation of power projects which are already in or near the construction phase. The anticipated addition to capacity is 3750 MW, for a total operating capacity of 10,560 MW. Hindalco Aluminum Company has already planned to increase its annual aluminum production from 150,000 to 250,000 tons. Hi-Tech Carbon intends to double its current production of 20,000 tons per annum of carbon black products. It was concluded that this scenario will not exacerbate environmental degradation if environmental protection measures are undertaken, such as the adoption and enforcement of environmental standards and regulations. Scenario 3: Maximum.capacity growth. This longer-term scenario assumes very large additions to existing capacity, close to the maximum environmental capacity of the site. A total operating capacity of 18500 MW would be possible if coal production were increased to 65 million tons per annum (about three times the current level of production). Under this scenario, new units could be built at the sites of existing stations (Singrauli, Vindhyachal and Rihand - all are sufficiently large to accommodate further expansion) and at two additional sites, Sites 3 and 4, located in Madhya Pradesh on the border of the Rihand Lake. However, this scenario is not recommended unless environmental protection measures and issues related to land management and resettlement are addressed. 5. Population issues have proven a critical factor in each scenario. Development has spawned the influx of a migrant labor work force which the area has been unable to absorb adequately through formal channels. In addition, large segments of the local population have been displaced during land acquisition for development and resettled in substandard conditions. The living conditions of each group have impacts on water quality, land use, and aquatic and terrestrial ecology. The study points out that environmental and socio-economic problems will occur under any development scenario unless these problems are addressed through a comprehensive regional development plan. 6. Population growth since 1981 has averaged about 5.4% per annum. The population estimates in the two future scenarios assume additional influxes of migrant workers as the area develops, as well as natural growth of the existing population. 73 Table DI: Davelopmet Soonas: Pdalpal Assunpdons I: Curert 2: Most Ukey 3: Tentative Power gmnerating capacity Existing 6760 MW 6760 MW 6760 MW Additions 3750 MW 11750 MW Total 6760 MW 10510 MW 18510 MW kdual= Poducd n (Mt perty.aw) Hindaloo Aluminum (aluminum) 150,000 250,000 250,000 HI*Tech Carbon (carbon black) 20,000 40,000 40,000 Kanoria Chemicals (caustic sods) 33,000 33,000 33,000 Population In Study Area* 450,000 800,000 1,000,000 * The study area Is a 15 km band around the Rihand Reservoir Soucs: dF Report, Executive Summary, July 1991. Concl.4sions and Recommendations by EdF 7. Study results indicate that the impacts of development on the physical environment in the Singrauli area are less critical than originally expected. The levels of air and water pollution caused by thermal power plants are within acceptable ranges for the present, even though in some zones NOx levels are near the maximum values set by Indian regulatory standards. Air pollution, caused by dust generated from various sources ( mainly soil erosion and coal mining) remains a problem. In addition to the above, the study points to the following environmental problems as a cause for concern: pollution of groundwater largely due to faecal contamination of open wells and also due to the seepage of industrial effluents such as cadmium and mercury; pollution of surface waters especially near the Kanoria Chemical Plant due to the discharge of mercury from this plant; pollution of the reservoir caused by erosion and run-off from the overburden dumps in the mining areas, and the discharge of ash slurry from ash ponds located in the Rihand floodplain. 8. The study concludes these problems can be managed by the introduction and enforcement of appropriate environmental standards. In this regard, some action already is underway to improve treatment of industrial wastes before release, e.g. the Kanoria Chemical Plant. Better operation/maintenance of industrial facilities will also reduce avoidable contamination of the environment. The study points out that far more critical than these pollution problems are the associated socioeconomic impacts of development which have arisen. These problems stem from a lack of 74 comprehensive planning for the region in the past and their impacts on the regional environment will be exacerbated by further ad hoc development of the region. 2. ENVIRONMENT FEASIBILITY STUDIES 9. Four World Bank environmental feasibility studies (financed by the Japan Grant Fund for the Environment) are currently underway. The studies are to produce action plans for specific environmental mitigation measures. The total cost of these studies is approximately, US $ 325,000 ane all funds are fully committed. The studies are being managed by the World Bank and undertaken by consultants. The studies are noted below: (i) Air Pollution from Thermal Power Stations (ii) Industrial Pollution Control for Specific Factories (iii) Cement Industry Pollution Control (iv) Reclamation/Reforestation of Coal, Flyash and Red Mud Air Pollution From Thermal Power Stations (Estimated Completion June 1992. Consultants: Tata Ener&y Research Institute. Delhi. Cost US 40.000) 10. The study is being conducted into two parts: Part I is an assessment of the current status of environmental performance of each of the thermal power operations in Singrauli (NTPC, UPSEB and Hindalco-Renusagar) and their ability to implement environmental action plans. It includes a detailed assessment of existing equipment for pollution abatement. The review looks at operating performance, maintenance, and effluent discharge on a continuous, daily and annual basis. The review includes an assessment of national and local standards for effluent control and how appropriate they are given the large concentration of power generation and population levels, and other relevant health and safety standards; and actual performance with regard to complying and enforcing those standards. Part II is the preparation of a detailed feasibility study to outline corrective action required of each operating thermal power unit to each applicable Indian central and state level regulations concerning air pollution. The study is to include a realistic assessment of each organization's ability to undertake the work and will include a detailed action plan for each organization to implement its program for environmental performance. 75 Industrial Pollution Control For Specific Factories (Estimated Comnletion May 1992. Consultants: Shriram Engineering. Delhi. Cost USS 18.200) 11. The study will review the performance of the following companies: Hindalco Aluminum, Kanoria Chemic.ls and Industries and HiTech Carbon Ltd., and include operating performance for the past three years with regard to air and water effluents with particular attention to toxic materials and water discharge to nearby water bodies. The review will also include: national and local standards for effluent control and their applicability; actual performance with regard to complying and enforcing those standards; limitations within a company that inhibit compliance such as financial constraints, management performance, lack of incentives, poor maintenance etc. 12. The study will also recommend any corrective action required for each operating unit to reach applicable Indian central and state level regulations concerning air and water pollution and will assess expansion - plants including projects under construction. Cement Industry Pollution Control Study (Estimated Completion May 1992, Consultants: Holtec Enzineerin. Cost US$ 16,800) 13. The Uttar Pradesh State Cement Corporation (UPSCC) has cement production facilities (and associated limestone mines) at Churk and Dalla. The performance of the UPSCC has been poor. This study is to develop an environmental improvement program for UPSCC and satisfactory solutions to control the high effluent discharges at both major production units. The work that is currently underway is along the lines of the work being undertaken in the studies described above. It includes a review of UPSCC's performance, and a feasibility study of corrective action required for each operating unit. ReclamationReforestation of Coal. Fly Ash and Red Mud (Estimated Completion May 1992, Consultants: Bromwell and Carrier Inc., USA, Cost US$ 250,000) 14. The study focuses on several components directly impacting the Singrauli region: open-cast coal operations, above-grade flyash disposal (from thermal power stations and red mud disposal (tailings from alumina extraction). It has the following objectives: i) reclamation of mined-out areas as well as the external overburden dumps associated with open-cast coal mines; ii) flyash ponds created by the thermal power stations and; iii) red mud disposal area at the Hindalco aluminum factory in Renukoot. 15. This work is to develop planning procedures and guidelines through scientific methods that will produce successful reclamation including watershed and reforestation development programs and mining and industrial/power facilities operating on a sustainable basis. These guidelines will serve as the base for future performance standards. 76 16. The draft report of the study makes the following recommendations: * Reclamation rules goals and incentives need to be developed and a lead agency identified; * A detailed cost study addressing operations and reclamation should be initiated; * Stabilization and restoration of external overburden dumps should be the priority reclamation objective; * The Central Mine Planning and Design Institute should be empowered to enforce existing responsibilities; if abolished, the personnel should be absorbed by the active operations; * The reclamation objectiva should be to establish a suitable ecosystem which can eventually be self-sustaining. Flvash- * Ash pond closure laws should be developed and a lead agency nominated to enforce such rules; * Restoration/revegetation guidelines should be included in pond closure laws; * No future ponds should be located in the Rihand floodplain. Existing ponds should have monitoring programs in place to detect possible dam failure; * NTPC's efforts to research alternative ash disposal techniques should be funded through a severance tax or some comparable shared cost structure so that the results will be available to all power generators. Red Mud * Pond closure rules should be developed addressing stabilization, restoration and revegetation, and a lead agency should oe identified; * Since restoration costs will be high due to the caustic nature of the tailings, a study addressing the cost burden should be initiated concurrent with the development of restoration plans; 17. The report concludes that an environmental clean-up of the area will require the development of a government structure that sets policy, and develops rules and performance standards that can be implemented and enforced. 3. INSTITUTIONAL AND SOCIO-ECONOMIC STUDIES 4 18. The following three World Bank studies are also being financed by the Japan Grant Fund. i. Area Reforestation and Watershed Protection 77 ii. Resettlement in Singrauli India: Negotiations, Land and Employment iii. Institutional and Administrative Options for the Region Area Reforestation and Watershed Protection (Estimated Comletion May 1992, Consultants: 3 local, one American, Cost US$ 30,000) 19. The objectives of the study are to: (a) assess the scale of the deforestation/watershed degradation problem in the Singrauli region, particularly its main causes; activities underway, planned or contemplated to address problems; the viability of such activities (from a technical, financial, institutional, social aspects), and; (b) make recommendations for dealing with the problems in a more effective, sustainable manner. 'Special attention will be given to social, watershod/forestry and institutional aspects. Scope 20. The study was conducted within the TCPO planning area but concentrated its assessments on the two Forest Divisions surrounding the reservoir, East Sidhi in Madhya Pradesh and Renukoot in Uttar Pradesh. Key Findings and Recommendations 21. At the more general level the study recommends: i) the clear identification of problems and issues that have direct and indirect causal linkages with existing and proposed development plans in the region; ii) a holistic approach to understand linkages with natural resources iii) the participation of institutions and communities in the Singrauli region in an integrated planning framework (that may be designed by TCPO). 22. More specifically, the study points to the need for: i) Integrated land use planning that would involve a review of land use and resource use policies, the creation of institutional mechanisms of integrated land use planning and a position paper on legal rights of communities on lands acquired; ii) Community oriented strategies in human settlements in the core area: this includes: restoring community rights on plantations; 78 several institutional changes involving the NTPC, NCL and the two state forest departments; an institutional framework for community involvement with the NCL by creating a Rural Development Division headed by a professional social worker; retail marketing of coal; formation of a fodder cooperative; and the evolution of an energy policy for the region. iii) Landbased community oriented strategies with respect to over burden dumps in the mining areas, flyash and red mud. 0 overburden dumps: the study points to the potential for employment generation and community involvement in overburden dump reclhmation. The study indicates that the existing overburden dump area to be planted up has the potential to provide.employment to over 250 families without incurring any additional expenditure. * flyash: the study recomminds a cost-benefit study for backfilling of mined areas and relocating future ash dumps to areas that are highly degraded and located at a distance from the reservoir. iv) New frest management Raradigm the key elements of t1s strategy are: revised management goals of short, medium and long-tern durations; target focus on women and tribals; reforestation first by natural regeneration complemented by enrichment planting and gapfilling where feasible and second by multi-tiered vegetation models simulating natural forest succession; strengthen institutional capacity including training, micro planning; and, reorientation of attitudes and perceptions towards communities. v) Agriculture. Watershed Development and Animal Husbandry: preparation of a land use plan which focuses on agriculture and watershed strategies; annual eco-development campaigns for rapid expansion of irrigation and agro-forestry; design and implementation of a watershed development program and an institutional framework; a study to analyze the current status of animal husbandry practices and dairy activities and their potential. Resettlement in Singranli. India: Negotiatigns. Land and Emlovment (May 1992. Consultants: 1 international. 2 local, cost USS 15.000): Backaroun 23. While the Singrauli region is a rapidly urbanizing, industrializing and growing economy, discontent among the local population is increasing. The local people contend that they have not benefitted from the improvements of services and the creation of jobs, and that their standard of living is deteriorating. This is evident in rehabilitation colonies which are characterized by a poor living environment, poor infrastructure, inappropriate locations, and few employment opportunities. 79 Objectives and Scope 24. To explore the above observations two settlements were studied in detail -NTPC's Navjivanvihar resettlement colony in M.P. and Kohroul village in U.P., which is an urbanized village. The objective was to gain a community perspective on the relative performance of settlements in the area, and to help identify institutional, political and economic mechanisms that affect conditions and economic opportunities. The main purpose of this analysiv was to gain an insight into resettlement and employment issues in this rapidly urbanizing and industrializing area, and the lessons it has to offer. Key findinZs 25. Key findings of the study include: i) the location and the availability of emoloyment opportunities in resettlement colonies are critical issues for its residents. ii) level of services: resettlemedt colonies require greater service investments as compared to urbanized villages by virtue of their density and urban location. However, due to increasing pressure by and the higher visibility of resettlement colonies as well as the increasing political pressures on the companies to improve resettlement performance, planning and investment in resettlement colonies are likely to surpass planning and investment in urbanized villages. iii) community narticination: oustees have become increasingly tough negotiators and their demand-making has created pressures on the district administration and companies to improve their resettlement performance and resulted in their being better located and better serviced. However, this participation has been limited. iv) employment and train4ng: employment is the most important issue for locals and oustees. They have been unable to get access to jobs because of the extremely limited number of unskilled jobs and competition from migrants. Many locals and oustees perceive daily wage jobs inside the plants and mines to be the next best option to permanent jobs. The study found that formal attempts to provide training to oustees have had little impact. In contrast, the on-the-job training e.g to NCL's unskilled workers, has worked relatively well. Institutional and Administrative Otions for the Region (Estimated Completion. September 1992. Consultants: 1 international. Cost USS 30.000) 26. The purpose of this paper is to define and analyze the advantages and disadvantages of various possible forms of administration in the region taking into consideration the wide range of central and state government organizations with an interest in the region and the need for some form of local participation in decision making. In considering possible forms of administration, this paper will examine the institutional arrangements adopted in analogous regions in other federal systems of government. 80 4. WORLD BANK BACKGROUND PAPERS 27. The Urban Development Division at the World Bank is involved in three pieces of work on Singrauli in relation to the urban environment program. These papers consolidate and draw some general conclusions from the results of other studies on the region. The SinzraUli Environmental Profile and Ouestionnaire (Completed January 1992. Cost USS 13.400. Consultants: 1 international consultant. 1 local consultant): 28. This is part of a series of case studies that will be used, in combination with background studies and research, to develop an overall report on Managing the Environmental Impacts of Urbanization. The profile consists introduces the region in terms of Information on its geophysical, land use and socioeconomic setting, examines the status.of rnauraj resources in the region (air, water and land); discusses development-envi,%nment interactions in:key sectors (e.g. water supply and sewe-%ge, housing, t.'ansport, industry, mining and power generation etc.); and finally, discusses the key actors and their environmental management functions/constraints in the region as well as ongoing initiatives to improve environmental management. 29. The profile is supplemented by an urban environmental indicators questionnaire that provides data on key environmental indicators such as air quality, water quality, land use etc. as well as socio-economic indicators such as poverty levels, level of unemployment etc. India - Singrauli Region Socio-Economic Issues (Completed August 1991. Cost US 3.300, Consultants: 1 international consultant): 30. This paper outlines some of the major socioeconomic issues, contradictions, and questions that have emerged out of a review of the literature on Siograuli, and interviews with Bank officials. The paper summarizes key issues, and suggests an approach that may help delineate some concrete, short term interventions, specifically in the shelter and employment sectors. Symmary Document on the EdF Socio-Economic Report (Completed August 1991. Cost US$ 3.300. Consultants: 1 international consultant) 31. This paper summarizes the key findings of the EdF Socio-Economic Report (January 1991) that is part of the Edf "Re.!-,nal Environmental Assessment Study." 81 5. SINGRAULI REGIONAL DEVELOPMENT PLAN - PHASE 1 Study Objectives 32. Prepared by the TCPO (MUD/GOI), the main objective of the Singrauli Regional Development Plan - Phase I is to prepare a draft regional plan for the area that assesses the current state of development in the region and its impact on various sectors, and identifies critical development zones and priorities for investment. The preparation of a draft regional plan was completed in September 1990. Phase II of the plan involves the preparation of the regional development and environmental strategy for Singrauli (details of which are discussed in the body of-the paper). 33. The report represents a good inventory of the current situation .in Singraili including the problems that have arisen from previous uncoordinated planning and development in the Singrauli region. It identifies some of the key issues in the region's development especially with regard to land constraints and infrastructure requirements, and includes n plan for future urban development. Recommendations 34. The study identifies seven critical zones of development and examines the extent of the following: basic service/infrastructure deficiencies; extent of industrial/mining activities in the area; impact of these activities on the environment and on the human settlements. 35. The study recommends the formation of development plans for these critical zones to facilitate the development of the coal and power sectors in coordination with other sectors. The plan includes the following recommendations: (i) people displaced by industrial activities should be resettled in their present occupation elsewhere or be provided with training in advance for jobs that may be created by the project itself; (ii) kurther expansion of power and mining activities should take into account the impact such activities would have on the regional economy and how these activities can be best utilized for the development of the area and the welfare of the people; (iii) integration of project and other settlement areas to ensure participation in development activities on a regional basis, with power plants playing a major role in encouraging participation; (iv) prevent excessive acquisition of land; (v) creation of a three tier organizational structure (High-powered Advisory Committee, Technical Advisory Committee, Plan 82 Implementation Committee) to coordinate and integrate actions at various levels; 36. For those living in non-project areas including unauthorized settlements, the priority areas of action are identified as: provision of basic facilities in non-project areas; housing and slum improvement. Areas for Further Reviev 37. The study is a useful compendium of information on the region and as noted above, was envisaged as the first phase in the formulation of a development and environmental strategy for the region. While the study forms a useful basis for future action, it needs some review and elaboration in the following areas: i. more detailed investigation and projections are needed on the economic development of the region by types of industries, timing and dependent population; ii. given the land shortages in the development corridor, the low incomes of most settlers, and the development costs involved, the standards of settlement, land use, social and infrastructure services appear high and need review; iii. there is inadequate recognition of the need to upgrade shanty areas and manage construction camps; iv. the plan tends to be static without indication of priorities; v. additional work is needed on the financial implications of the development plan and initial action plans, including allocation of costs between public and private sectors, potential for grant and loan finances, revenue generation from taxes and user charges; vi. there is need a for analysis of institutional and management issues; vii. a more dynamic and continuous planning process is required, , supported by monitoring and information systems; viii. the study should look strategically at long term development options for the region based on the implications of future growth of the power and mining sectors. 38. The proposed development and environmental strategy for the region (which constitutes Phase II of the TCPO Regional Development Plan) is expected to address these and other issues. Conclusions 39. Overall, the study concludes that growth of the mining and power sectors would be beneficial both at the national and at the regional/local 83 level. At the national level, generation of power will help build up industrial capabilities in other areas and increase employment opportunities for skilled workers in specialized jobs. At the regional level, the benefits of regional development in.-lude: more employment, higher wages, greater per capita production of food grains and a higher standard of living. The study indicates however that accelerated industrial development requires concrete efforts along several fronts, such as development and conservation of natural resources, protection and control of environmental pollution and degradation, integrated planning for sectoral development, physical planning of urban and rural areas, the provision of basic infrastructure and services, and the development of human resources to ens.re that people are drawn into the development process. TRKMLEYC:WP51\SINGRAUL4APPEND. SDP MAY 15, 1992