Nepal - Arun III Hydroelectric Project : Management Response to the Investigation Report

A ' THE WORLD BANWIFC/M.I.G.A. OFFICE MEMORANDUM RECEIVED LDATE: May23, 1995 TO:Mr. Ernst-Gunt oder, Chairman, P N FROM: D. Joseph Wo ce President, SAS EXTENSION:81429 SUBJECT: NEPAL - Proposed Arun IUHydro Electric Project Attached are one copy each of the Summary of Conclusions and Recommendations for Further Actions, and Note on the Conclusions and Recommendations for Further Actions, reflecting the findings and recommendations of the mission which visited Nepal in April 1995. The mission consisted of specialists in the following areas: power engineering (Task Manager), environmental impact assessment, anthropology, resettlement and rehabilitation and highway engineering. L The findings of the mission reflect the status of the project as of mid-April 1995, in respect of the three areas for which investigation by the Inspection Panel was authorized by the Board. We hope that with the adoption of the proposed remedial measures, the Panel will find the project to be in compliance with our relevant policies in the three areas of investigation. Ail these remedial measures would have to be satisfactory to IDA. We will communicate to the Government the criteria to be met for these measures to be satisfactory Attachments: (2)  Mr. Ernst-GuntherBroder -2- May 23, 1995 cw and cc (with Attachments): Mr. Ahmed (LEGSA) cc (with Attachments): Messrs./Mmes. Drysdale, Salop (SASVP); Vergin, Barghouti, Uchimura, Cambridge (SASDR); Steer, Goodland (ENVDR); Mead (LEGSA); Derbez, Nicholas, Prennushi (SA2CI); Davis, McPhail, Jacobs (ENVSP); Rees, Redwood, Robelus (ENVLW); Koch-Weser (ASTEN); Socknat, Ghani (ASTHR); Mejia, Hoban, Unger (SA2EI). SA2EIProject File Asia Information Center ACeyhan: Document Name: Arun9568.Doc  May23, 1995 NEPAL PROPOSED ARUN I11 HYDRO ELECTRIC PROJECT - SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS FOR FURTHER ACTIONS InvestigationArea 1: Environmental ImDact Assessment The access road to the Arun I11 dam and hydro project sites should be built along the valley alignment, provided the recommendations in the areas below are implemented to the satisfaction of IDA. The following aspects still need to be taken into account in the Environmental Impact Assessment. (a) Spoilsdisposal. GON/NEA to identi@alternative options for all spoil disposal, estimate costs and impacts of these alternatives, and implement these where economically feasible to avoid river disposal; *- .- s - 0 GON/NEA to calculate the likely cost of this change of policy and inform IDA whether it will be implemented through up-front contract modifications, or through the existing contract supervision and unit price framework. Required as soon as possible, at the latest for Board Presentation. (b) Impact on the Wildlifeand Aquatic Life. Impact on wildlife and aquatic life estimated to be modest. Impact on fisheries resources ! still worth mitigating. (b.1) Makalu-BarunConservationArea (MBCA). 0 GON/NEA to demonstrate, in a manner satisfactory to IDA, that building this road portion on the western bank is unavoidable; 0 GON/NEA and MBCA to agree on mitigatory measures and compensation, satisfactory to IDA and taking into account national legislation. Required for Board Presentation. (b.2) Sal Forest Patches. 0 GON/NEA to demonstrate, in a manner satisfactory to IDA, that road portions cannot be located on adjacent non-forested ridges; 0 Adequate compensation, conservation measures and forest management plans to be included in the RAP, satisfactory to IDA and taking into account national legislation. Required for Board Presentation.  2 . - (b.3) Aquatic Life. Establishment of a small fish hatchery to be included in the Regional Action Plan (RAP). Required for Board Presentation. (c) Impact of IncreasedTraffic on the Market Town of Hile. GON/NEA to devise, in consultations with town residents, an appropriate solution, including a traffic management plan. Required for Board Presentation. Panel of Exuerts. GON/NEA to appoint two Panels of Experts. Required for Board Presentation. InvestigationArea>2: Involuntarv Resettlement Acquisition, Comuensation, and Rehabilitation - - Issues Land Acauired along the Hill Route. L 0 GON/NEA to investigate the situations of the families affected by the Government possession of land in Tumlingtar and in Basantapur (for construction of a road portion from this town). Required for Board Presentation. 0 GON to formulate a time-bound pian indicating the land to be returned to original owners and to be utilized for future road construction, including measures for protecting the standards of living of those whose lands will be possessed and the procedures to enable original owners to regain their lands. Required for Board Presentation. Acauisition, ComDensation, and Rehabilitation Plan (ACRP) for the Valley Route. 0 Because of unforeseen delay in implementation of the project, the ACRP for the valley route is in need of updating, to take into account changes in baseline data, cost and budget. 0 As conceived in the ACRP the above updating would involve clarifications on certain related matters. Required for Board Presentation.  3 . - L InvestipationArea 3: ActionsInvolvinp Local People (i) Informed ParticipationThrough Public Consultations. Field investigations found that communities consulted were fully aware of the Project and were looking forward to its implementation. Therefore, it is concluded that no new consultations would be useful until a decision has been made on project financing. (ii) Security Over Land Tenure. GON/NEA to prepare a map showing the boundaries of forests managed by the forest user groups active or being established along the valley route. Required as soon as possible, at the latest for Board Presentation.' (iii) An Action Program with Sociallyand Culturally Appropriate Components. 0 Addressed through the proposed Regional Action Program (RAP): -. EioT\i to revise and expand the RAP, including: .,. an action program including detailed description, budget, time table an