GLOBAL ENVIRONMENT FACILITY
PROPOSAL FOR PROJECT DEVELOPMENT FACILITY (PDF) BLOCK B GRANT
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Country
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Focal Area:
Operational Program:
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Project Title:
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Romania
International Waters
OP-8 Waterbody-Based Operational Program
Hazards Risk Mitigation and Emergency Preparedness
Project (HRMEPP)
Total estimated project cost is US$260 million,
Total Cost:
including estimated US$6.5 million GEF funding.
Estimated cost of the GEF-supported Component C is
US$14.6 million, out of which GEF will finance US$6.2
million, IBRD will finance US$5.0 million and the
Government US$$3.2 million.
US$350,000
PDF Request:
In-kind contributions and US$ 88,000 from Ministry of Industry and Resources,
National Agency for Mineral Resources, and REMIN
other financing:
(in-kind) for provision of vehicles, transportation, office
space, utilities, rent.
US$ 140,000 from Austria and the Netherlands trust
funds (managed by the World Bank) for ongoing
preparatory studies.
The World Bank
Requesting Agency:
Ministry of Public Works in coordination with the
Executing Agency:
National Agency for Mineral Resources
PDF Block B
Block:
6 months
PDF Duration:
(from May 2003 to October 2003)
5 years
Project Duration:
Project Objectives
Romania is severely exposed to a range of natural disasters and industrial accidents, particular to
the risk of earthquakes, flooding, landslides and mining accidental pollution causing economic
and human losses and negative impacts on human health and aquatic ecosystems across the
country and neighboring states.
The overall development objective of the Hazards Risk Mitigation and Emergency Preparedness
(HRMEP) Project is to assist the Government of Romania in reducing the environmental, social,
financial and economic vulnerability to natural disasters and water pollution accidents from
mining activities through: (i) strengthening the institutional and technical capacity for disaster
management and emergency response; (ii) implementing risk reduction measures for floods,
landslides and earthquakes; (iii) improving the safety of dams; (iv) establishing a financially
sustainable national disaster insurance system; and (v) mitigating the environmental impacts of
accidental spills and release of hazardous materials in the Danube River and Black Sea Basins.
The project global environmental objective is to protect the integrity of the Danube River and
Black Sea aquatic ecosystems by mitigating the risk of water pollution from mining accidents
and reducing catastrophic sources of transboundary pollution loads. In support of this objective,
the project through a proposed GEF co-financed component will pilot techniques for improving
the management and safety of tailing and waste facilities and catalyze transboundary cooperation
through the basin-wide partnerships recently formed for the Tisza basin under the auspices of the
European Commission (EC) and United Nations Environmental Commission for Europe
(UNECE). The GEF component is intended to be a model for replication for reducing mining
accident risks to human and aquatic ecosystem health throughout Romania and other parts of the
Tisza and Danube basins.
The GEF-supported component will complement activities carried out under other components
of the projects, namely for strengthening and upgrading the emergency response capacity
component (US$18 million) and upgrading flood forecasting and flood disseminations systems
(US$10 million). The GEF-supported activities will rely upon the works underway in the mining
sector under the World Bank Mine Closure and Social Mitigation Project (estimated total cost
US$61.5 million, funded by a US$44.5 million IBRD loan approved by the Board in FY99), and
will be coordinated with other ongoing and planned activities in the sector. It is worth noticing
that the Mine Closure and Social Mitigation Project is supporting works and consultant services,
totaling about US$32 million, to address key environmental concerns of the mining sector.
14.
Global Significance
The Tisza River. The Tisza River with about 970 kilometer (km) in length is the largest tributary
to the Danube. From its total length about 160 km lies in the Ukraine and Romania border, about
650 km in Hungary, and 150 km in Yugoslavia. Its catchment area of 0.157 million square
kilometers is distributed as follows: about 46% of the catchment area lays in Romania, 29% in
Hungary, 9.7% in Slovakia, 8.1% in Ukraine, and 6.6% in Yugoslavia. The volume of flow of
the Tisza River passes across international boundaries. In order to ensure the long-term
protection of the river ecosystem, transboundary co-operation on integrated management of the
Tisza River Basin is required.
Romania as a candidate for membership of the European Union is committed to adopt and
implement the EU environmental directives, including the EU framework directive for water
management. The EU Water Framework directive introduces the concept of management of
river basin as an integrated approach and calls for the elaboration and implementation of a river
basin management plan for achieving “good water (quantity and quality) status,” which shall
address among other issues, point-source pollution reduction (including those of mining
activities), prevention and mitigation of threats from land-based sources of pollution, chronic and
accidental pollution, flood control and management, and conservation of aquatic ecosystems. At
the national level, efforts are under way to amend the national legislation and harmonize it with
EU directives and to prepare management plan for the Upper Tisza Basin. At the regional level,
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the countries in the Tisza basin, namely Ukraine, Slovakia, Romania, Hungary and Yugoslavia
have just started dialogue on basin-wide management under the EC Tisza River Basin Project
Tisza and the UNECE River Basin Sustainable Development Program. Concrete mechanisms
are being identified to engage riparian countries in the development of integrated water and
environment management strategies. The proposed project provides an opportunity to create a
forum for transboundary cooperation to reduce the risk of accidental mining pollution.
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Background
The proposed GEF-supported component directly supports the goals of the International
Convention for the Protection and Sustainable Use of the Danube River. The 1994 Danube
Strategic Action Plan under the Convention on Cooperation for the Protection and Sustainable
Use of the Danube River is concerned with transboundary water issues and includes provisions
to protect the Black Sea and Danube Delta against pollution by nutrient and hazardous. Until
recently, most of the attention on the Danube and Black Sea basins has been concentrated on
reduction of nutrient loads to address the problem of euthrophication in the Black Sea. The
recent mining accidents in the Tisza catchment area, however, have pointed out that additional
priority should be placed to address mine-induced water pollution and mining accidents.
Mining accidental spills in one country can have huge transboundary impacts in other riparian
countries of the Danube River and Black Sea basins. Communities and ecosystems located far
away from the mining region where the accidents takes place are at risk of pollution exposure.
The recent mining accidents have increased public awareness of the environmental and safety
hazards of the mining industry and have shown that the risk assessment and prevention of tailing
dams pollution accidents have to improve. The long-term protection of Danube and Black Sea
water quality thus calls for addressing ongoing degradation of mine tailing dams and continuous
erosion of contaminants into surface waters of the area.
The Romanian mining sector has a long tradition and is important to the country and has a good
future in terms of reserves and potential exploitation1. Currently the sector faces difficult
challenges in relation to economic, social and environmental requirements. Total direct
employment in the mining industry is about 10%, and is higher than in any other European
Union country. Long-term impacts on the environment and human health have occurred as a
result of diffuse pollution from sites subject to mining activities over centuries. The Government
has launched a restructuring of its mining industry, and efforts are underway to close
uneconomic mines. This undertaking is supported by the FY99 Mine Closure and Social
Mitigation Project (MCSMP)2. Privatization of the sector is also part of this restructuring, which
poses additional environmental challenges related to environmental liabilities from past mining
operations.
The Government is committed to improve the environmental performance of the mining sector,
and has recently completed a comprehensive Mining Sector Environmental Assessment
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Sector Environmental Assessment Mining Sector of Romania. Final Report, Vol 1 and Vol 2. Prepared by
Wardell Armstrong and IWACO. September 2001.
The project will develop effective procedures for a technically and environmentally sound approach to the
formal closure of uneconomic mines.
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(MSEA), which provides a baseline evaluation of the state-owned mines throughout the country3.
The MSEA identifies the main environmental issues arising from ongoing mining activities, and
priority areas for future environmental remediation/mitigation efforts. The MSEA has identified
that a large number of operating mining sites require urgent environmental rehabilitation of their
tailings and waste storage facilities to avoid catastrophic and continued releases of highly
persistent toxins, thus reducing the risk of mining accidents with long-term environmental
consequences.
Accidental pollution threats. According to available information, there are 264 facilities
constructed to store mine tailings throughout the country, out of which about 40 pose a severe
threat to the surrounding human population and the environment. A recent inventory in the Tisza
Basin has identified 17 tailing facilities as potential risk spots. Romania has a large number of
abandoned tailing storage facilities and mine waste rock dumps, which are also sources of
contamination. As proven by the two accidents in northwestern Romania in 2000, the failure of
tailings storage facilities can have serious and devastating consequences.
(a)
Aurul S.A. Mine Accident. A spill of about 100,000 cubic meters of wastewater,
containing about 40 tons of cyanide and other heavy metals (lead, cadmium,
copper, manganese, zinc and arsenic), took place on January 30, 2000, at the
Aurul S.A., an Australian-owned gold and silver producing mine located in Baia
Mare in the Maramures region in northern Romania. The spill was caused by a
combination of a break of the Aurul dam as a result of the heavy rains and the
melting snow, and design defects in the facility. The polluted wastewater traveled
into the Somes River, the Tisza River in Hungary and Yugoslavia, and Danube
River before entering into the Black Sea about four weeks later. The initial
cyanide concentration was reported to be between 325 and 700 times permissible
levels. This incident has resulted in severe deleterious impact on the aquatic life
of the Tisza River, 1,200 tons of fish have been reported dead, and has threatened
people’s health and livelihoods as well as drinking water sources for about 2
million inhabitants. The total quantifiable damage has been estimated at about
US$3.5 million.
(b)
Baia Borsa Mine Accident. A second mining waste spill in the Maramures region
of Romania took place five weeks after the earlier accident at the Baia Borsa
Preparation Enterprise mining company. A section of the dam built with
sediments from the mine failed on March 10, 2000, as a result of the heavy
rainfall and melting snow from the slopes surrounding the mine. As a result of
this incident, approximately 20,000 tons of mineral waste containing minerals and
heavy metals (lead, copper and zinc) were discharged into the Viseu River, the
Vasar River and Tisza River
These tailing disposal facilities accidents heightened concern in the international community,
primarily those bordering the receiving surface waters, that tailing facilities represent a major
risk to the environment, both in the short- and long-term. According to field investigations, the
two reported accidents could have been avoided if adequate quality assurance and technology
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The EA will be expanded to also include abandoned mines and active mines operated by the private sector.
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were used in the design of the flood handling components of the facilities, proper forecasting
system linked to existing rainfall and snow pack gauge stations, continuous monitoring system,
and a proper emergency preparedness and response procedures by the companies and local
authorities were in place. Concern was expressed that the continued release of known acute
toxins such as cyanide and mine related heavy metals could have a lasting impact on the surface
waters of the Maramures region and ultimately the Danube River and Black Sea Basins. While
the catastrophic releases provide heightened awareness, the continuous erosion of mine tailings
and unprotected mining and spoil disposal areas during high precipitation events and flows could
have a far greater impact on the environment and raises concern.
Factors contributing to high mining accidental water pollution risk in Romania in general, and
the Tisza Basin in particular, are as follows:
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(a)
Poor management of tailing facilities. The risks present at tailing facilities are
several, but the most important are: breach of dam structure and discharge of
tailings, seepage of contaminated water into surface and groundwater, dust
emission from dry tailing surface by wind and deposited into water bodies, soil
erosion associated with wind and rain water, hazardous chemicals, acid mine
drainage4 and heavy metal contamination.
(b)
Limited investment on environmental improvement in the mining sector. All
environmental agencies and natural resource management agencies considered
mine tailings and mine-related wastes as the number one environmental
contamination threat. However, due to economic constraints, environmentalrelated investments by the mining companies in Romania have been reduced to a
minimum. Many mining wastewater treatment facilities are in poor condition
and are working with a minimum of efficiency. Under present conditions, large
volumes of polluted wastewater are discharged directly into the environment.
(c)
Insufficient knowledge about the extent and risk of mining-induced pollution.
Baseline conditions in the surface waters and receiving waters in the Tisza
catchment region are not available. The nature and extent of potential risk
associated with mine-induced pollution can not be assessed with current data.
This limits progress on establishing risk based cleanup levels and on evaluating
the performance of mine and dam tailings water quality improvement projects as
well as success of emergency response actions.
(d)
Weak institutional capacity to implement and enforce regulatory instruments and
standards. According to the MSEA, both human and financial resources are
scarce; awareness and capabilities in environmental management are weak in the
mining sector as well as the agencies that support and regulate it do not have
specific experience.
Acid mine drainage is considered a major source of chronic pollution in mining areas. It is mostly a longterm pollution problem of abandoned mines. The low pH content of acid drainage causes leaching and
mobilization of cooper, zinc, cadmium, arsenic and lead from waste rocks piles and tailings dams, which in
turn causes severe contamination of water, soil, and vegetation.
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(e)
Environmental emergency response plans are in place but are not effective.
According to the Romania Water Law, each company should have an emergency
response plan. Although many companies have such plans, they lack the capacity
for implementation and coordination with local and central authorities is poor.
Mining companies and regulatory agencies have voiced the need for improved inhouse risk assessment capability, real time monitoring and response capability in
order to increase their contribution to management decisions.
Government policies and strategies and ongoing programs. The Government policies and
programs to mitigate the risk related to mine-induced pollution in Romania are as follows:
(f)
Reorganization of the mining sector. In 1998, the Government of Romania
launched the reform of the mining sector. A new Mining Law was passed in
1998, which sets modern rules for the management of the mineral resources.
Implementation of the reform is ongoing but with delays.
(g)
Legislation on the safety of tailing dams. After the two accidents in the
Maramures region, the Government decided to amend its Dam Safety Law to
address the safety of tailings storage facilities. This assumes particular relevance
in the context of the recent update of the World Bank safeguard policy on Dams
Safety and the recommendations of the World Dams Commission report to
enhance reservoir management. Regulations are being prepared to provide
guidance on how to enforce the legislation.
(h)
Mine Closure Procedure Manual. Under the MCSMP a Mine Closure Procedure
Manual for the closure of state owned mines has been drafted and issued as a
Ministerial Order. Provisions are now included in this project for the drafting of a
version of the Manual for privately owned mines and eleven annexes to support
both Manuals. These annexes will include guidelines on the decomminisioning
and rehabilitation of tailings impoundments and waste dumps.
(i)
Environmental improvement in the mining sector. An environmental action plan
has been drawn to mitigate environmental impacts in each subsector and efforts
are under way to prepare pilot environmental action plans for specific mines. The
Government is committed to improve the environmental conditions in the mining
sector, but the implementation of priority investments will be hampered by the
absence of requisite mechanisms.
(j)
Improving knowledge base. Several government and donor activities relevant to
the proposed project have supported development of information and monitoring
systems in the Maramuras region, i.e., UNEP-supported risk assessment and
environmental impact assessment, EU-supported compilation of available data to
determine causes and effects of the spills, ICPDR-supported identification of
pollution sources, Italian-supported risk environmental and health impact risk
assessment, WWF-supported assessment of impacts of the spills. The
effectiveness of these efforts however is hampered by lack of adequate equipment
and mobile analytical capability, transport and computers. Moreover,
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methodologies for data collection and transmission is not standardized, e.g., each
entity used its standard for “sea level” or elevation benchmark rather than that
used by Romania. Analytical data was also not comparable due to varied
analytical methods and sampling methods. In some cases analytical results varied
by over 112 fold. This resulted from variations in sample preparation (filtered vs.
unfiltered and digested vs. undigested).
(k)
Environmental emergency response capability. Plans are under way to transpose
the EU Water Framework Directive, which calls for measures at the watershed
and basin levels to prevent significant pollution from these facilities and reduce
the impacts of accidental pollution incidents, and for installation of systems to
detect or give warning of such events. The central and local governments don’t
have yet the response capability to address emergency situations and to monitor
response activities and corrective actions in a timely manner.
Outstanding issues. The outstanding sector issues that remain to be addressed include:
(a)
Financing. The Government will need to provide financial support to mines to
improve their environmental performance. The MCSMP is currently financing
the closure and rehabilitation of 29 mines in line with good industry practice. The
Government is financing the closure of a further 262 mines using state budget
resources. Limited practical steps have been taken on the implementation of the
recently established Environmental Fund, which aims to provide financial
incentives to industrial enterprises to bring their mining sites into conformity with
safety and environmental regulations so as to protect the public, the environment,
and the users of water in any affected watershed.
(b)
Baseline. Improved baseline and knowledge base is necessary to support
decisions on protection of water quality. A comprehensive inventory and a
detailed assessment of all abandoned and active mining sites and tailing storage
facilities in the Maramures Region is still missing. Similarly, an assessment of
existing contamination in the region is not available.
(c)
Strategic planning and coordination. The central government should play a
stronger role in the area of strategic planning and coordination by helping to
identify a priority range of corrective measures on the basis of a risk assessment
of all mine sites (abandoned and under operation). A risk based approach to
identify the best way to phase investments at the regional level so that available
resources can be channeled to those measures with the highest benefits – i.e.,
those that reduce the overall risk of mines and tailing storage facilities to levels
protective of water quality (surface and groundwater) and aquatic ecosystems
should be conducted.
(d)
Monitoring. The environmental monitoring system needs to be strengthened and
laboratories should harmonize analytical procedures and establish a system of
accreditation. Cooperation between various organizations involved on water
quality monitoring needs to improve, as well as their roles need to be clarified.
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Several agencies have responsibility for surface water monitoring, mine
environmental compliance and mine operation. It appears that operation and
oversight may be held by the same agencies. For example, the Ministry of Waters
and Environmental Protection and the Local EPAs have limited monitoring
capability and often rely on the regulated agencies and companies to provide them
with data to determine compliance. This severely limits the effectiveness of the
regulators. Clear roles and responsibilities will need to be established and agreed
to by all Ministries and agencies.
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(e)
Environmental emergency response capability. If the current system is to function
adequately, the emergency response capability must include appropriate response
equipment, personal protective equipment, training, environmental monitoring
equipment. A review of current response and monitoring capability revealed that
mobile analytical capability was nonexistent and local response entities lacked
adequate personal protective equipment and spill response equipment.
(f)
Capacity building. There is a need to improve the capacity to integrate emergency
response and monitoring capability at the mines sites and local level in the
Maramures region and to improve the emergency preparedness, particularly in
relation to local communities at risk.
Project Description
The HRMEPP comprises five components: (i) strengthening and upgrading the emergency
response capacity; (ii) risk reduction of natural disasters; (iii) risk reduction of mining accidents
in the tisza basin; (iv) risk transfer though disaster insurance; and (v) project management. A
brief description of the main content of these five components is provided below.
Component A: Strengthening and Upgrading the Emergency Response Capacity (US$10
million). This component will support the overall strategies and current initiatives of the
Romanian government regarding the nation’s emergency response system, especially in
Bucharest which has the greatest risk. In addition, they address a set of long-standing needs to
modernize the infrastructure essential to prepare for and initiate a rapid, coordinated response to
a range of emergencies, including earthquakes, floods, landslides and environmental accidents.
The proposed activities under this component include: modernization of the communications and
information management systems, enhancement of emergency response capacity at the regional
level; and integration of seismic monitoring network and the development of real-time loss
estimation system; development of Vrancea regional earthquake scenario and enhancing training
and public awareness programs.
Component B: Natural Disaster Risk Reduction (US$65.5 million)
The objective of this component is to support specific risk reduction (mitigation) activities
related to three
principal hazards in Romania: earthquakes, floods, and landslides. Under Sub-component B.1 on
earthquake risk reduction, the project will support a cost-benefit assessment of critical facilities
and lifelines and investment in high-priority mitigation measures. Under Sub-component B.2 on
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flood risk reduction, the project will support construction and improvement of flood mitigation
works, rehabilitation of critical areas of the Danube River that presenting have a high risk of
failure; rehabilitation of high priority unsafe large and small dams to upgrade their safety; and
upgrading flood forecasting and flood warning and disseminations systems. Under Subcomponent B.3, on landslide risk reduction, technical assistance will be provided to define and
map the key areas of landslides and pilot landslide protection measures in selected priority areas.
Component C: Risk Reduction of Mining Accidents in the Tisza Basin (US$13.0 million)
This component would: (i) improve the management of active and abandoned tailings facilities
and thereby reduce the risk of mine-induced pollution to the Danube River and Black Sea basins;
and (ii) assist the Government of Romania in protecting the integrity of the Danube and Black
Sea basins, in meeting its international agreements and commitments to reduce catastrophic
sources of transboundary pollution loads, and in harmonizing its legislation with EU
environmental directives5. The activities proposed for GEF financing will build on the ongoing
or planned experiences. They remain to be better defined but would include:
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(a)
Activity 1 - Establishment of a Baseline Environmental Monitoring System
(US$0.6 million: US$0.51 million GEF; US$0.09 GoR): This activity will include
the establishment of ambient water quality baselines, baselines of streams and
aquatic ecosystems altered by persistent sources of mine and other anthropogenic
sources of contaminants; and will build on the findings of the recently concluded
investigations of the Tisza River conducted under the auspices of the ICPDR and
other baseline studies to be conducted during the preparatory phase. The baseline
values and methods would meet international standards and serve as benchmark
values in evaluating spill response and effectiveness of tailing dams
remediation/reclamation activities for maintaining surface and groundwater
quality in key catchments in the Tisza basin. Depending on the results of the
needs assessment, which will be conducted during the preparatory phase, the
monitoring system may have to be extended to downstream countries.
(b)
Activity 2 – Prevention and Remediation Projects (US$10.75 million: US$4.3
million GEF; US$1.45 million GoR; US$5.0 million other sources, e.g., Bankfunded Mine Closure and Social Mitigation Project): This activity will support the
identification of a priority investment program for the Tisza River catchment area
and the implementation of pilot projects for improving the safety and
management of tailing and waste facilities, thus reducing the risk for catastrophic
release introduction of contaminants into surface waters contributing to the Tisza
and Danube. In addition, replication of physical interventions in tailing dams and
waste facilities supported by the potential GEF grant in other parts of the Tisza
basin and Romania will be financed from other sources. One potential source is
the FY2000 Mine Closure and Social Mitigation Project (expected to be closed in
June 30, 2005), whose Mine Closure Program Component provides financial
support for environmental remediation activities.
It refers to two EU directives: Water Framework Directive and COM (2000)664 on “Promoting Sustainable
Development in the EU Non-Energy Extractive Industry,” issued after the mining accidents in Baia Mare,
Romania and Aznalcollar in Spain.
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(c)
Activity 3 – Environmental and Engineering Guidelines for Tailings and Waste
Facilities (US$0.2 million: US$0.17 million GEF; US$0.03 million GoR): On the
basis of the results of activity 2, development of engineering and environmental
design standards for tailings and waste facilities in the mining sector that
minimize environmental risks during operation and after closure. Key features to
consider include: seismic strength, resistance to flood events, capacity to collect
runoff water, etc.
(d)
Activity 4 – Regional Mine Spill Disaster Response System (US$1.2 million:
US$1.02 million GEF; US$0.18 million GoR): This activity will improve the
effectiveness of the current system for contingency planning, emergency
response, awareness, preparedness and communication and will support the
development of a regional mine spill disaster response system to deal in a gradual
manner with the risks posed by accidental mining spills of mining companies that
are located along the Szamos and Tisza rivers draining into the Danube River,
which will integrate the emergency plans of mines. Mechanisms will be put in
place to assess the hazards posed by the spills as well as for reporting information
to those responsible for taking action at the local, national and regional level
(through the International Commission for the Protection of the Danube River and
the regulatory entities). This system will complement activities proposed under
the HRMEP, namely, Component 1, which focuses on strengthening and
upgrading the emergency response capacity, and Sub-Component B.2, which
among other things will focus on upgrading the flood forecasting and
dissemination systems.
(e)
Activity 5 – Promoting Transboundary Cooperation on Integrated Water
Resources Management for the Tisza Basin (US$0.20 million: GEF US$0.20
million). It will provide financial support to allow Romania experts and
institutions to further advance and promote dialogue on basin-wide cooperation
with other riparian countries and facilitate the development of a regional policy of
cooperation in the management of tailings and waste facilities in the Tisza and
Danube basins. This will strengthen recent and ongoing basin-wide initiatives
directed towards integrated water resources management, e.g., ICPDR,
UNDP/GEF Regional Danube Project, EC Tisza River Basin Project, UNECE
Tisza River Basin Sustainable Development Project. Assistance will be provided
to cover the cost associated with preparation of studies, the participation of
Romanian experts and decision-makers in regional events that promote
transboundary cooperation on a broad range of topics and issues, organization of
meetings and workshops with the participation of upstream and downstream
countries, etc6. Recognizing that it is only through regional dialogue between
riparian countries that sustainable management of the Tisza basin can be
achieved, during the preparation phase, Romanian authorities with the support of
The Bank intends to start dialogue on water resources management with Ukraine and Yugoslavia to assist
these countries in the preparation of water resources and risk management strategies, including flood
management. These efforts, if successful, will complement the proposed GEF project and may result in a
multi-country Tisza Basin initiative.
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the World Bank Safeguards Compliance Unit will organize a regional workshop
on the safety of tailing dams to start dialogue on regulatory framework to
specifically address tailing dams and mining safety.
The expected outputs from this component would include: (i) cost-effective, efficient and
innovative methods identified and piloted for tailing facilities management that include
environmental and safety criteria that can be replicated throughout Romania and the Danube
Basin; (ii) improved capacity at both the national and local environmental protection level to
conduct risk assessment and develop risk based priorities; (iii) strengthened capacity and
capability to develop a long-term tailings dams mitigation strategy which can be expanded to the
whole country; (iv) an improved emergency preparedness and response system; and (v)
strengthened transboundary collaboration.
Component D: Risk Transfer through Disaster Insurance (US$ 70 million)
The primary objective of this component is to develop a sustainable national risk transfer
program that would: (i) provide adequate earthquake insurance coverage to the Romanian
homeowners; (ii) reduce the government financial exposure to natural disasters by transferring
most of earthquake risk to international reinsurers and capital markets; (iii) give a boost to the
development of the domestic insurance industry by offering additional reinsurance capacity for
high severity risks to the local insurers. This component will provide technical assistance and
business feasibility studies, the establishment of a reinsurance premium and a contingent line of
credit in support of the Pool’s claim paying capacity
Component E: Project Management and Monitoring (US$4 million)
The component will finance the incremental costs a central Project Coordination Unit (PCU)
under the Ministry of Public Works, responsible for the reporting, monitoring, financial
management and procurement assistance, and several Project Implementation Units (PIU) under
each concerned ministry, including the Ministry of Industry and Resources, who will be
responsible for the implementation of the technical aspects, procurement supervision and
counterpart funding of the GEF-supported component.
17.
Description of proposed Project Preparation Activities and PDF Request:
The Government of Romania herewith submits a request for a Project Development Facility
(PDF) Block B Grant in the amount of US$350,000 to finance detailed analysis needed for the
preparation of the Project7. The Government will fund additional preparatory activities listed in
Annex 1. The PDF-B Grant would be used to primarily to finance the costs of consulting
services for feasibility studies, incremental cost analysis, environmental and social assessments,
and support for project coordination. Specifically, preparation activities for the GEF-supported
component would focus on the following:
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The Government is carrying out the following preparatory activities: (i) inventory of all tailings storage
facilities and waste dumps and identification of impacts; (ii) development of a methodology to prioritize
hot spots on the basis of agreed criteria; and (iii) pre-feasibility studies of the technical options available to
reduce the risk of mining accidents of tailing storage facilities and waste facilities of high priority.
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18.
(a)
Feasibility studies of priority pilot mines. The feasibility studies will analyze
the alternatives for the remediation and mitigation works proposed in the prefeasibility studies; prepare detailed cost estimates, including detailed incremental
cost analyses (identify eligible incremental costs that would be financed by GEF),
which will determine the justification and nature of appropriate GEF financing for
the Project. Consultants will support in the preparation of bidding package for
detailed engineering designs and/or civil works and/or additional surveys and
investigations.
(b)
Supplementary studies and investigations: Compilation of existing baseline
information will be carried out and on the basis of the assessment of available
information a range of supplementary studies and investigations will be
commissioned such as geotechnical testing, chemical analysis, etc. to inform the
feasibility studies.
(c)
Social Assessment (SA). The social assessment that targets local populations will
be prepared only for the GEF-supported Component. It will include the
identification of key stakeholders; identify potential social impacts (positive and
negative) on general public and economic activities, develop mitigation measures
and recommendations for project design, and identify mechanisms for the
involvement of key stakeholders in overall preparation ad implementation of the
GEF-supported component. The EA and SA will undergo continuous review
through stakeholder workshops and public consultations.
(d)
Environmental Assessment (SA). An environmental assessment for the priority
investments to ensure compliance with Romanian environmental regulations and
World Bank environmental safeguard policies will be carried out. The expected
overall impact of the GEF-supported component on the environment will be
highly positive in global, regional and local dimensions. Specific activities
however may have some negative environmental impacts, which should be
mitigated.
(e)
Project Preparation and Coordination: The PDF-B grant will support the
preparation of the incremental cost analysis, the project planning matrix
(LOGFRAME) through a consultative process, the project implementation plan,
financial management and procurement plans, the bidding packages for the first
year of project implementation; and the establishment of the financial
management system for the project. Financial assistance will be provided to
cover the PCU’s and the PIU’s operating costs, salaries and fees of PCU and PIU
staff, basic equipment, consultant services for the design and installation of the
financial management system, and travel related expenses/workshops to
representatives of the Ministry of Water and Environment to participate/organize
events that aim to advance dialogue on river basin management.
Implementing Entity
12
The PCU under the Ministry of Public Works will be responsible for coordinating and managing
the procurement, financial management and reporting aspects related to the implementation of
the PDF-B activities. The PCU will work in close cooperation with the PIU under the Ministry of
Industry and Resources or National Agency of Mineral Resources, who will be responsible for
the technical aspects related to the PDF-B activities. The PIU will coordinate the input of the
Ministry of Water and Environment Protection, Apele Romane and mining companies. The
Ministry of Public Works is in the process of selecting three consultants to work as part of the
core team of the PCU: a Project Director, a Financial Manager and a Procurement Specialist. The
Ministry of Industry and Resources, in turn, is in the process of selecting the core team of its
PIU: a Project Manager and technical experts.
19.
PDF Block B Outputs:
The main output of the project preparation activities will be a Project Appraisal Document
detailing project activities and implementation arrangements for the GEF-supported component.
It will be fully consistent with GEF eligibility criteria and will satisfy all World Bank
requirements for financial and procurement management as well as the social and environmental
safeguards. The specific outputs will be: (i) a GEF full proposal, which detailed technical,
environmental, social, economic, financial and institutional assessments; (ii) a Project
Implementation Plan with a detailed public involvement plan, a detailed monitoring and
evaluation indicators, and detailed implementation arrangements; and (iii) TOR and tender
documentation for procurement to be carried out during the first year of project implementation.
20.
Eligibility
The proposed GEF-supported component is fully consistent with the GEF’s Operational Strategy
in that it supports long-term protection of international waters and complies with the long-term
objective of the GEF “Waterbody-Based Operational Program” (Operational Program No. 8),
which is to “undertake a series of projects that involve helping groups of countries to work
collaboratively with the support of implementing agencies in achieving changes in sectoral
policies and activities so that trans-boundary environmental concerns degrading specific
waterbodies can be resolved.” In addition, the GEF-supported component is in line with the
objectives of the Programatic Approach to the Danube and Black Sea Basin, namely, Danube
and Black Sea basin countries (i) adopt and implement policy, institutional and regulatory
changes to reduce point and non-point source nutrients discharges, restore nutrient sinks and
prevent and remediate toxic hot spots; and (ii) gain experience in making investments in
prevention and remediation of toxic “hot spots.” The GEF component will: (i) enable the
development of a more integrated knowledge base about transboundary impacts of mine-induced
pollution in the Danube and Black Sea basin; (ii) provide capacity building to increase the
opportunity for adoption of best mine waste management practices throughout the Tisza and
Danube basins; (iii) pilot techniques for prevention and remediation of toxic mining hot spots;
(iv) provide for lessons learned that could be replicated to other parts of the Tisza and Danube
basins (v) leverage support from the mine operators to replicate measures to manage the risks
associated with tailings and waste disposal facilities; and (vi) foster transboundary cooperation.
13
The project also directly supports the goals of the International Convention for the Protection and
Sustainable Use of the Danube River. The 1994 Danube Strategic Action Plan under the
Convention on Cooperation for the Protection and Sustainable Use of the Danube River is
concerned with transboundary water issues and includes provisions to protect the Black Sea and
Danube Delta against pollution by nutrient and hazardous. Until recently, most of the attention
on the Danube and Black Sea basins has been concentrated on reduction of nutrient loads to
address the problem of euthrophication in the Black Sea. The recent mining accidents in the
Tisza catchment area, however, have pointed out that additional priority should be placed to
address mine-induced water pollution and mining accidents.
The 2001-2005 Joint Action Environmental Program for the Danube River Basin has identified
key priorities areas including mining-induced pollution, i.e., pollution and potential accident
pollution caused by waste deposit sites and mining tailing dams. The proposed GEF component
will enable to implement some of the recommendations of the Action Plan.
21.
National level support:
Reducing the vulnerability to natural hazards and pollution from mining operations and accidents
is one of the priorities of the Romanian Government. Several lending operations from
international financial institutions, namely EIB, ISPA, PHARE, US Ex-Im Bank, are supporting
activities in this area.
In addition, the Republic of Romania has demonstrated its support and interest to help address
serious transboundary environmental problems in the Danube/Black Sea by its participation in
different activities related to the framework of Black Sea Environmental Program, via its
participation in Danube Environment Programme, and, within the frame of the ICPDR where
Romania is an active member, by its involvement in the UNDP/GEF Pollution Reduction
Programme.
22.
Justification
PDF Grant funds are critical needed to complete the preparatory work for this project and ensure
that the proposed project will meet GEF criteria. Several donors are working with the
Government to reduce the risk of mine-induced pollution to the Danube River and Black Sea
basins and some preparatory activities are being carried out by the Ministry of Industrial and
Resources and the Ministry of Water and Environmental Protection. The proposed preparation
activities to be financed by the PDF-B grant will enhance the Government commitment to
protect the integrity of the Danube River and Black Sea basins and reduce catastrophic sources
of transboundary pollution loads.
23.
Project Cost, Preparation Budget and Timetable
Project Costs and Financing
The table below provides a break down of project estimated cost and sources of financing by
component.
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Component
Component A: Strengthening and
Upgrading the Emergency Response
Capacity
Component B: Risk Reduction of
Natural Disasters
Component C: Risk Reduction of
Mining Accidents in the Tisza Basin
Component D: Risk Transfer through
Disaster Insurance
Component E: Project Management,
Monitoring and Coordination
Front-end fee
TOTAL
Indicative Costs % of total Bank Financing % of total GEF financing % of GEF
(US$M)
(US$M)
(US$M)
Component
18.0
7%
10.00
6%
0.00
0%
121.5
47%
65.50
42%
0.00
0%
14.7
6%
5.00
3%
6.20
95%
100.0
39%
70.00
45%
0.00
0%
4.0
2%
3.00
2%
0.30
5%
0.00
6.50
0%
1.5
259.7
1.50
155.00
Preparation Budget
The table below provides a budget for the preparation of the project and its financing sources (*).
Activity
Sub-total
Technical Studies
Ongoing Studies (including pre-feasility studies)
50,000
Feasibility Studies for Rosia Poini and Baia Borse Mines
172,000
Additional Surveys and M&E plan
64,000
Sub-total
286,000
Social and Environmental Assessments
Social Assessment (including public involvement plan)
Environmental Impact Assessment
Sub-total
Project Preparation and Coordination
Financial Management System
Setting up of the Project Management Unit
Setting up of the Project Implementation Unit
Sub-total
Contingency
Total
GEF
Funding Source
Taxes
Taxes
In-kind
MoIR
MoPW
MoIR
In-kind
MoPW
162,000
43,200
205,200
10,800
10,800
-
50,000
10,000
10,000
70,000
-
26,000
48,000
74,000
16,800
36,000
52,800
4,200
9,000
13,200
-
5,000
3,000
8,000
-
20,000
77,333
65,667
163,000
16,000
40,000
34,400
90,400
26,267
26,267
4,000
32,333
36,333
5,000
5,000
5,000
5,000
1,600
1,600
-
-
524,600
350,000
50,267
36,333
83,000
5,000
This table does not include about US$ 140,000 from Austria and the Netherlands trust funds managed by
the World Bank and directed to the preparation of the project components to be funded by GEF.
Timetable
PDF-B activities are planned to commence in May 2003 and are to be completed by the end of
October 2003, when the Project Appraisal Document will be presented to the GEF CEO for final
approval.
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Activity
Feasibility Studies for Rosia Poini and
Baia Borse Mines
May'03
Jun'03
TORs for tender documents
Additional Surveys
Social Assessment including plublic
involvement plan
Environmental Impact Assessment
Financial Management System
Monitoring and Evaluation Plan
Project Preparation and Coordination
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Jul'03
Aug'03
Sep'03
Oct'03