India - Hazardous Waste Management Project

Report No. PIC2518 Project Name India-Hazardous Waste Management Project Region South Asia Sector Environment Project ID INPA41178 Borrower Government of India Implementing Agency Ministry of Environment and Forests Paryavaran Bhavan, CGO Complex, Lodi Road New Delhi 110 003, India Fax: (91-11) 436-0678 Contact: Mr. N. Bagchi, Advisor Date Initial PID Prepared June 20, 1995 Date this PID Prepared June 6, 1996 Projected Appraisal Date September 1996 Projected Board Date April 1997 1. Country and Sector Background: Responding to the Government's request, the Bank has been assisting, since 1991, with the implementation of a cost-effective program of industrial pollution abatement in the country. The first operation under this program was the Industrial Pollution Control Project, approved in May 1991. Since becoming effective, the project has had substantial success in achieving its objectives. In July 1994, the Industrial Pollution Prevention Project was approved by the Board and is now being implemented. These two initiatives have assisted the State Pollution Control Boards (SPCBs) to make significant progress in achieving their mandate, especially as related to common pollution problems, such as air and water pollution, from large- and medium-scale industrial units in highly-polluting sectors. However, as these common pollution problems have become better controlled, the toxic effects of hazardous materials being discharged into air, land, and water have become increasingly evident, and the need to address these issues more urgent. It is estimated that up to 5 million tons of hazardous wastes are generated every year in India, most of it concentrated in the highly industrialized states (Gujarat, Maharashtra, Andhra Pradesh, and Tamil Nadu). The available infrastructure for disposal is limited to dedicated facilities serving mostly large chemical complexes. Often, toxic and hazardous waste is disposed off without any treatment, frequently mixed with domestic solid waste in unsafe dumps that pollute groundwater, or is dumped directly into surface water bodies. The key issues in hazardous wastes management have been identified by the Central Pollution Control Board as: a) insufficient information on the quality and risks of the waste; b) inadequate vigilance and enforcement of regulations; c) inadequate awareness of the risks to health; and iv) lack of proper infrastructure for safe containment or disposal. 2. With hazardous waste management regulations in place, the next step for the industrialized states of India is to improve the  monitoring, enforcement, and physical infrastructure needed for their effective implementation. The proposed project addresses this urgent need, identified as a priority in the national Environmental Action Program (EAP), and responds to GOI's request for Bank assistance. 3. Project Objective: The project objective is to assist in the implementation of the Government policy on hazardous materials and hazardous waste management, and to implement a cost-effective and sustainable hazardous waste management system. The emphasis of the project will be in the institutional area, to complement existing efforts initiated with assistance from international agencies. The specific goals are to: a) strengthen institutions associated with hazardous waste management; b) support the training and technical assistance requirements for the implementation of sustainable containment and disposal systems; and c) support the development of a network of properly designed and managed disposal and containment sites for toxic and hazardous waste. 4. Project Description: The project is designed with three components, which reflect the need for a broad range of improvements in the capacity of government agencies, the level of public awareness, and the availability of hazardous waste management facilities. These components are described below: (a) An Institutional component, designed to support the Central Pollution Control Boards (CPCBs) and selected State Pollution Control Boards (SPCBs), in strengthening their capacity to monitor and enforce the Hazardous Wastes Handling Rules, through the implementation of a restructuring and training program and the acquisition of monitoring and sampling equipment. Support will also be provided to the State offices of the Ministry of Surface Transport, to strengthen monitoring and compliance with the regulation of hazardous materials transport, and to the Directorate General of Factory Inspectors to strengthen compliance with safety regulations. (b) A Technical Assistance component, to be implemented by SPCBs, to support: (i) assessment of sites used for containment of hazardous waste and the development of a framework for site remediation; (ii) a community-based awareness program on the risks to health, environment, and safety posed by improper handling and disposal of hazardous waste; (iii) continuation and updating of the inventories of hazardous and toxic waste in the participating States, including expansion of the GIS- based tracking and monitoring system for hazardous waste already initiated under the Pollution Prevention Project; (iv) an overall effort to improve information management at the SPCBs; and (v) support for efforts to implement community right-to-know regulations, including development of a Toxic Release Inventory (TRI), which has proven very effective in other countries, as a measure to minimize toxic waste. (c) An Investment component, to provide assistance for: (i) development of centralized hazardous waste treatment and disposal facilities in the participating States; and (ii) a -2 -  pilot program for cleaning and containment of waste at a few high priority sites, posing large safety, health, and environmental hazards. 5. Project Implementation: Overall implementation is the responsibility of the Ministry of Environment and Forests (MOEF). Other government agencies involved in the preparation and coordination of the project activities are the Ministry of Labor and the Ministry of Surface Transport. The institutional component will be directly executed by the participating State Boards, the technical assistance component will be coordinated through the MOEF. The Investment component will be executed by the participating Banks and State governments. 6. Project Costs: The estimated project cost is US$360.0 million, including physical and price contingencies. Direct and indirect foreign exchange costs have been estimated at about US$70.0 million. The project costs are based on preliminary estimates and are subject to revision pending detailed feasibility studies currently under planning. 7. Project Financing: A proposed Bank loan of US$100.0 million and the proceeds of a proposed IDA credit of US$50-80.0 million would finance about one-half of the project costs. The balance would be provided through domestic sources of financing, equity contributions from sub-borrowers and Government budgetary allocations. The Nordic Development Fund has expressed interest in participating in cofinancing of the project. 8. Sustainability: To ensure sustainability, investments in infrastructure will aim at promoting a well-regulated market for the provision of hazardous waste management services. As part of the appraisal process, the Bank will review the selection process for the location of the facilities. In their selection and development, Bank guidelines will be strictly adhered to. As currently envisioned by the GOI, the actual investments in the facilities will be undertaken by the States in which the sites are located, with some participation from the Central Government. Private operators will be involved in the management and maintenance of the facilities under a lease agreement with the States. In all cases the facilities will be designed and operated under Build and Operate (B&O) agreements. Private sector involvement in hazardous waste management is crucial to ensure the provision of cost- effective services responsive to the needs of the market. Strong government oversight is important to ensure that the larger social benefits intended through these investments are in fact accrued. Alternatives will be discussed to ensure the sustainability of these efforts, including shared-ownership options involving private parties. Alternative designs will be considered (including central facilities, mobile treatment units, and use of cement kilns) and selection of operators and technologies will be undertaken by means of International Competitive Bidding. Care will be exercised by the project sponsors to avoid the use of untested technologies. 9. Poverty Category: Not applicable. 10. Environmental Aspects: This is a dedicated environment project. All activities under the different components have been - 3-  designed to promote cost-effective means for hazardous waste generators to comply with waste transport, storage, containment, and final disposal regulations. The proposed project is a natural next step in the Bank- assisted program on industrial environmental management, and focuses on a specialized area that could not be addressed under the more general Pollution Control and Pollution Prevention Projects. Moreover, the project is part of a coherent Bank strategy for pollution management in India, which includes the activities in industrial pollution abatement, air pollution control, and solid waste management. 11. Program Objective Categories: ENV. 12. Disclaimer: This PID contains information on an evolving project, subject to modifications in its scope. Certain components may not necessarily be included in the final project. Contact Point: Public Information Center The World Bank 1818 H Street, N.W. Washington, DC 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Note: This is information on an evolving project. Certain components may not necessarily be included in the final project. Processed by the Public Information Center week ending: June 7, 1996 - 4 -