INTEGRATED SAFEGUARDS DATA SHEET APPRAISAL STAGE

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Date ISDS Prepared/Updated: 31-Jan-2012 I. BASIC INFORMATION 1. Basic Project Data INTEGRATED SAFEGUARDS DATA SHEET APPRAISAL STAGE Country: Sri Lanka Project ID: P Project Name: Task Team Leader: Metro Colombo Urban Development Project (P122735) Rosanna Nitti Estimated Appraisal Date: 12-Jan-2012 Estimated Board Date: 15-Mar-2012 Report No.: ISDSA347 Managing Unit: SASDU Lending Instrument: Specific Investment Loan Sector: Flood protection (100%) Theme: Natural disaster management (70%), Urban services and housing for the poor (25%), Municipal governance and institution building (5%) Financing (In USD Million) Financing Source Amount BORROWER/RECIPIENT International Bank for Reconstruction and Development International Development Association (IDA) 0.00 Japan Policy and Human Resources Development Fund 0.90 Financing Gap 0.50 Total Environmental Category: A - Full Assessment Is this a Repeater project? 2. Project Objectives No The project development objective (PDO) is to support the Borrower to (i) reduce flooding in the catchment of the Colombo Water Basin, and (ii) strengthen the capacity of local authorities in the Colombo Metropolitan Area (CMA) to rehabilitate, improve and maintain local infrastructure and services through selected demonstration investments. 3. Project Description The project comprises the following three main Components: Component 1: Flood and Drainage Management. This supports priority improvements to flood and drainage management infrastructure in the Colombo Basin, as well as the development of an integrated flood management system (IFMS) and complementary interventions to enhance the economic value and aesthetic qualities of the water bodies. This component includes the following subcomponents: Sub-Component 1.1 Primary and secondary canals and lakes, to include (i) enhancement of runoff from the southeastern upper section of the basin toward Kelani Ganga; (ii) creation of lakes/retentions areas in the central section of the Colombo Basin, around Parliament Lake; (iii) removal of bottlenecks in the downstream reaches of the canals to maximize their conveyance capacity; (iv) improvement of the outflow capacity of Saint Sebastian South Canal; (v) improvement of the outflow capacity at Mutwal, North Lock, and Gotatuwa; and (vi) improvement and construction of canal bank protections. Sub-Component 1.2 Micro-drainage system within the CMC (localized floods), with a focus on 15 priority flood-prone areas where localized flooding regularly takes place. Sub-Component 1.3 Capacity enhancement for flood and drainage management. This aims to improve the Colombo Basin s and SLLRDC s capacity to ensure the sustainability of project investments over time. It includes the purchase of maintenance machinery, the development of an IFMS for the Colombo Basin, and selected investments to support a pilot water-based transport system aimed at enhancing the usability of the canals system. Sub-Component 1.4 Beira Lake Linear Park and Beddagana Park, to include (i) improving embankments and developing promenade along the east and southwest shores of Beira Lake, and (ii) establishing a natural park around degraded wetlands of the Parliament Lake system (generally referred to as Beddagana Park). Page 1 of 9

2 Component 2: Urban development, infrastructure rehabilitation, and capacity building for Metro Colombo local and central authorities. This component aims to (i) support local authorities in the CMA to rehabilitate and manage their streets and drainage infrastructure, and improve local public facilities, solid waste collection, and other urban services, and (ii) strengthen strategic planning processes at the metropolitan level. It comprises the following two subcomponents: Sub-Component 2.1 Investment support to local authorities will build local capacity through implementing select high-priority infrastructure improvements in four local authorities in the Colombo Metropolitan Area (Colombo, Sri Jayawardenapura-Kotte, Dehiwela Mount. Lavinia, and Kolonnawa) to rehabilitate and improve drainage and roads, upgrade local public facilities, and purchase needed equipments to improve local public services. Sub-Component 2.2 Institutional strengthening and capacity building for local and central authorities will comprise of technical assistance to the PLAs including geographic information system (GIS), asset management for urban roads and related drainage, setting of technical standards, preparation of street and drainage rehabilitation and maintenance works (including quality control), and improvements in solid waste collection. It will also support metropolitan development strategies and planning, feasibility, and engineering studies for central authorities, including a Metropolitan Colombo City Development Strategy (MCCDS), an integrated master plan (including a transportation plan) for the CMA, as defined by the MCCDS; a Solid Waste Management strategy and action plan for the CMA; and another detailed study for selected priority metropolitan services as identified by the MCCDS. Component 3: Implementation Support. This comprises: (i) implementation support in the areas of project management, monitoring and evaluation (M&E), procurement, financial management, and environmental and social safeguards; (ii) public awareness and communications support regarding project interventions, management ofpublic expectations, behavior changes and resettlement; (iii) support to the SLLRDC, UDA, and PLAs in construction, supervision, and compliance with environmental and social safeguards; (iv) purchase of cars, office furniture, and IT equipment for the Project Management Unit (PMU); and (v) operating costs of the PMU. 4. Project location and salient physical characteristics relevant to the safeguard analysis (if known) 5. Environmental and Social Safeguards Specialists Nadeera Rajapakse (SASDI) Satya N. Mishra (SASDS) Darshani De Silva (SASDI) 6. Safeguard Policies Triggered Yes No Explanation Environmental Assessment OP/BP 4.01 Environmental Assessment (OP/BP 4.01) will be triggered as the project will support flood and drainage improvement that will involve medium/large scale civil construction work, dredging, pond creation, canal construction and widening etc. Natural Habitats OP/BP 4.04 Forests OP/BP 4.36 Pest Management OP 4.09 Physical Cultural Resources OP/BP 4.11 Physical and Cultural Resources (OP/BP4.11) will be triggered as the project proposes to upgrade and restore the historic flood management structures at the end section of the Colombo Water Basin, around the Beira Lake system. Indigenous Peoples OP/BP 4.10 Social Assessment confirms that no indigenous people live in Colombo area. Involuntary Resettlement OP/BP 4.12 OP 4.12 has been triggered based on the social assessment in view of unavoidable land acquisition and resettlement requirements. A Social Management Framework (SMF) providing a Resettlement Policy Framework has been prepared for the Project along with Social Screening Report and an Abbreviated RAP for the Stage-I sub-projects. For stage II, completion of the SIA and implementation of RAPs will constitute disbursement criteria for individual sub-projects. Safety of Dams OP/BP 4.37 Projects on International Waterways OP/BP 7.50 Projects in Disputed Areas OP/BP 7.60 II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: The project triggered three safeguard policies as indicated above- OP 4.01: Environmental assessment, OP 4.11: Physical Cultural proprieties and OP 4.12: Involuntary Resettlement. OP/BP 4.10 has not been triggered based on Social Assessment results. Page 2 of 9

3 Environment: The proposed project interventions are expected to generate many positive environmental and public health impacts through improved flood/drainage management and local services in the Colombo metropolitan area. Achieving the desired outcomes and sustaining them in the long-term would depend upon how the project will address environmental risks and challenges when planning and implementing sub-projects, which have been the focus of the safeguards documents prepared hitherto and include an (i) Environmental Management Framework (EMF) (ii) Environmental Assessment (EA) and (iii) environmental screening reports to supplement the EA for the short list of 8 subprojects ready for implementation in year 1. As revealed by the safeguards assessments and screening carried out so far, the environmental footprint of a majority of investments are associated with construction impacts that include air pollution, noise, debris disposal, public safety, inconvenience, restricted access, traffic congestion, removal of vegetation in the work sites, extraction of construction material, etc. which would be localized and temporary in nature and mitigatable with good construction, housekeeping, public safety and debris disposal practices. Currently, the water quality in the canal network show high levels of pollution, especially in the lower part of the basin which is slow-flowing and receives a considerable load of wastewater and sewage from domestic and commercial establishments. Therefore, impacts on water quality from canal rehabilitation work will be insignificant and temporary. Since drainage and wastewater discharge are the main functions of the canal network there will be no impacts resulting from restriction on other uses due to construction work. Improving water quality in the rehabilitated canals and waterways will be considered part of the overall canal rehabilitation. However, given the nature of technical, regulatory and institutional intervention and coordination required to address the issue in its entirety, the project will only be able to provide support on a demonstration scale (e.g. sewer collector line to capture informal sewerage discharges in the Beira Lake, improved solid waste collection at municipal level) that would trigger longer-term water quality maintenance activities by the implementing agencies.the terrain of the project area being flat, there will be no major concerns of soil erosion and sedimentation. Of the project sites, the only ecologically important areas are the remaining wetlands in the Colombo basin, which at present exists as several blocks of inter-connected marshes covering an area of approximately 286 ha. Protecting these wetlands from further shrinking has been identified as an absolute priority for effective flood management within the city and its suburbs. In addition to flood detention, the wetlands offer great potential for nature conservation, recreation, and education which the project will seek to optimize through investments such as the Beddagana and Kotte Ramparts park. Other parts of the basin are highly modified and urbanized and as such, there will be no serious ecological impacts. As part of improving the macro-drainage network in the Colombo basin, dredging would be undertaken in selected canals and lakes to increase the water conveyance and storage capacity. This could give rise to the most potentially significant adverse environmental impact under the project in case it is determined that the dredge material is contaminated with hazardous chemicals. Haphazard disposal of potentially contaminated dredge material can lead to many irreversible environmental and public health risks, and as such the project will adopt a cautious approach and undertake adequate assessment of sediment quality prior to the commencement of dredging activities. Given the level of urban/ industrial activity, the risk of pollution by hazardous elements could particularly be relevant in lake/canal sediments in the lower part of the Colombo basin while the risk of contamination should diminish from lower to upper catchment areas. In addition, the periodic cleaning and desilting carried out by the Sri Lanka Land Reclamation and Development Corporation (SLLRDC) and Colombo Municipality Council (CMC) on the main/secondary canal network and the storm water drainage system reduces the likelihood of sediment contamination resulting from longterm accumulation of chemical substances in these waterways. The EMF provides the necessary technical guidelines to follow in planning dredging activities and disposal of dredge material. An analysis of sediments in a sample of significant locations in the Colombo Basin has already been initiated based on which the need to prepare a special Dredge Material Disposal Plan will be determined. This process will be a contribution to SLLRDC s and CMC s future O & M plans for the Primary and Secondary Canals. Solid waste management (SWM) and water quality improvement in waterways in the Metro Colombo area are two key complementary challenges linked to the project with implications on the sustainability of project outcomes in the long-term. Haphazard disposal of garbage in the city that get washed into waterways and informal disposal of sewage are the main reasons causing poor drainage and water quality in the city's canals and drains. The poor state of SWM in the country reflects chronic underinvestment with regard to operations and maintenance and appropriate technologies, inadequate information and community education and lack of environmentally acceptable disposal facilities. While solutions to these challenges go beyond the scope of the MCUDP, the Project will benefit from ongoing initiatives by the Solid Waste Management Center at the Ministry of Local Authorities and Provincial Councils and by parallel programs by the Ministry of Environment. The project will complement these on-going efforts by specifically investing in selected physical interventions to help (i) improve the operational efficiency of waste collection in the project area and (ii) intercept sewer discharges to Beira Lake, which are a main source of pollution to the nutrient rich lake. The project will also support feasibility studies to find practical and economical solutions for the treatment and disposal of municipal waste and sewerage which will pave the way for potential follow-on projects on solid waste and sewerage management in the Metro Colombo area. Social: The Project includes flood control measures which may involve minimal land acquisition and some involuntary resettlement impacts. However, the majority of the works, chiefly improvement of existing infrastructure such as canals, micro/storm drainage, streets, recreation areas, and similar works will have only temporary impacts relating to access, mobility, health, and safety. The key social risks and issues identified for the project are associated with: (i) mitigating potential involuntary resettlement (OP/BP 4.12) and any adverse impacts on physical and cultural resources (OP/BP 4.11), (ii) promoting social inclusion and accountability, and (iii) supporting sustainable management for resettlement sites developed to re-house displaced households. In fact, it is estimated that about 1,500 squatter households living in underserved settlements (USSs) along the Beira Lake and canal banks will be relocated to permanent housing. In addition, the Project authorities will resettle some 200 squatter families earlier living on government plots identified for the construction of resettlement sites. While the exact number of households and magnitude of private land required for the whole project are not known, the eight subprojects prepared for implementation in the first batch have been assessed and require no land acquisition. These sub-projects include: 4 subprojects proposed by CMC, namely [1] The Walkability and Parking Improvements to eleven road sections of the City; [2] Improving public convenience by erecting public toilets at fourteen locations; [3] Model zone development of Town Hall Square; and [4] the Marine Drive Development which will address flooding and drainage issues around the Marine Drive area. The SLLRDC has proposed two subprojects: [5] Improvements to main drain, Mutwal Tunnel and to Aluthmawatha culverts and [6] Improvements to Dehiwala canal bank from Galle Road bridge up to the sea outfall. The UDA has proposed two projects: [7] Beira Lake Restoration Project which will construct Linear Park, Lake Bank protection wall, foot bridge and rehabilitation of McCallum Lock Gates and [8] Beddagana and Kotte Ramparts Park. These activities mostly involve temporary impacts including relocation of only two shops and one commercial kiosk which will be undertaken by the concerned implementing agency with R&R assistance provided as per the Social Action Plan in line with the SMF. Social Screening has been completed for these eight sub-projects and Social Action Plans have been prepared in line with the Social Management Framework compliant with Bank safeguard policies. Key social risks and impacts associated with the activities to be undertaken in the later stage are expected to involve private land acquisition Page 3 of 9

4 required for infrastructure works and the resettlement of vulnerable households living in informal settlements on low-lying lands, as part of the flood and drainage management investments under Component 1. A few works proposed by the participating Local Authorities under Component-II may in some cases involve possible involuntary resettlement impacts on account of land acquisition or resumption of occupied public lands in the Metro Colombo area. Specific activities that may generate involuntary resettlement impacts include: flood and drainage management works (rehabilitation and improvement of the drainage and canal systems with dredging and widening to reduce flood risks) to be undertaken by the SLLRDC; development of the Beira lake and other lakes by UDA; civil works planned by the participating municipalities including rehabilitation or, and improvement of municipal roads; construction of schools, libraries, etc. These activities may require acquisition of private lands/structures, and may affect residences and businesses in the area, especially those located in low lying areas, community facilities and physical and cultural properties. In some cases resumption of public lands for civil works under the occupation of unauthorized residents and shops could also generate resettlement impacts. The long term impacts of relocation of people from the low lying areas are expected to be positive. The positive impacts identified in the Social Assessment are: prevention of loss of assets and economic activities due to flood risks, avoidance of public inconvenience due to reduction in water logging in some residential areas, improved mobility for the city dwellers due to rehabilitation of walakbility infrastructure, provision of formal ownership of house for squatters likely to be affected by the project, social recognition and security associated with formal tenure, improvement in living conditions in new condominiums, integration of the younger generation in the middleclass mainstream of the capital region, enhanced credit-worthiness, and poverty alleviation. Most of the people likely to be affected live in under-served settlements (USS) without secure tenure; have informal incomes and access to minimum basic services including water, electricity, and common toilets; and are poorer than the mainstream population of the metropolitan area. Some of them belong to linguistic or religious minorities, but not indigenous communities. Although the main objective of resettlement will be to ensure a better quality of life for communities occupying environmentally sensitive flood-prone low lying lands, the relocated people might face temporary or longer term livelihood impacts or income losses due to the loss of existing business tied to their location. Interventions involving involuntary resettlement (IR) will have a long gestation period, and will therefore be implemented in the Stage-II with mitigation plans prepared and implemented for the Project as per the Social Management Framework. The key social issues associated with this Project which are addressed in the Social Management Framework are: (a) assessing and mitigating social safeguard risks due to land acquisition (LA) and involuntary resettlement (OP/BP 4.12) and likely impact on physical and cultural resources (OP/BP 4.11); (b) promoting social inclusion and accountability to enhance the implementation quality and outcomes; (c) sustainable self-management of the multi-storey resettlement buildings and sites with effective and affordable estate management arrangements. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: Environment: The anticipated future activities in the project area would be very similar to activities proposed to be carried out by this project and related to urban upgrading, disaster management, improvement to urban transportation etc. As such, the net cumulative impact from better urban planning and disaster risk mitigation is expected to be positive. The negative environmental impacts from these anticipated future activities will be similar to this project and could be mitigated with early planning and implementation of appropriate mitigation measures. Social: The anticipated future activities will be mostly related to maintenance of infrastructure created by this project. Expansion of activities of similar nature as proposed in this Project may involve long term impacts including temporary impacts as in case of Stage-I investments and permanent impacts as in case of Stage-II activities. The development of Beira lake front and canals may open the water bodies for recreational use and generate new economic activities and incomes for people. The project may also promote changes in land use around water bodies in order to better manage flood risks. The households impacted due to such changes will be compensated and rehabilitated as per their eligibility. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. The project implementation time-line has been prepared to allow adequate time for the preparation of sub-projects that may trigger adverse impact, so that the necessary investigations, alternative analysis and mitigation can be planned and completed in support ofproject implementation. For example, sub-projects involving dredging with the potential to cause serious impacts will be deferred to second year of project implantation onwards giving the borrower ample time to conduct necessary investigations to identify suitable technologies in case the issues are significantly adverse or avoid continuing proposed activities if impacts are found to be irreversible with no means of mitigating. Some of the other measures taken to avoid or minimize adverse environmental and social impacts include (a) use of the existing right of way in case of rehabilitation/upgrading existing infrastructure; (b) avoidance of design alternatives that may affect heavily built up areas; and (c) works along existing canal and drainage paths with required section corrections. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. Environmental Assessment: The borrower has undertaken the preparation of several important documents to address safeguard policy issues of the project that primarily include an (i) EMF for the project and an (ii) EA for a long list of sub-projects earmarked for implementation during the early phase of project implementation. The EMF provides the overall environmental safeguards management framework for the MCUDP and specifies the principles and procedures to be followed and instruments to be applied in identifying, managing and monitoring potential adverse environmental impacts of sub-projects. The criteria set out in the EMF primarily recommends that each sub-project be subjected to a detailed screening, using the template provided, based on which the requirement for a stand-alone and site-specific assessment and the type of assessment are determined. The EA provides an overall assessment of the regulatory framework for natural resources management in Sri Lanka, its relevance to the long list of sub-projects considered, their anticipated environmental impacts and mitigation. The EA recommends that activities requiring dredging be scheduled only after sediment quality within the basin has been established that will support environmentally sound decision making for the disposal of dredged material. In addition, the application of the EMF to the first batch of 8 sub-projects have been carried out and detailed screening reports to supplement the EA have been prepared with the conclusion that site-specific EMPs are suffice to commensurate with the issues identified in each of the sub-project. For all other sub-projects in the pipeline the same methodology will be systematically applied wherein first the detail screening will be carried out for each sub-project soon after the technical designs have been completed and the sub-project scope has been defined. Based on the screening outcome, the appropriate safeguard instrument will be determined and carried out, as necessary, with any proposed consequent changes to the designs effected prior to commencing the procurement process. As guidance to the PMU, the EMF provides a classification of sub-projects in the pipeline in accordance with (a) safeguard categories of OP 4.01 and (b) prescribed thresholds of the Sri Lanka National Environmental Act (NEA), and recommends the type of environmental analysis suited for each type of investment commensurate with the magnitude of potential impacts. This classification is only a broad guidance and will be r-evaluated at the time of screening for each specific sub-project. Page 4 of 9

5 The EMF also provides technical guidelines, as summarized below, to guide the planning of dredging activities and disposal of dredged material, which is identified as the most significant of potential environmental issues under the proposed project. Sediment quality assessment since there is inadequate sediment quality data the project will develop sediment Sampling and Analysis Plan (SAP) for the basin to determine the environmental acceptability of the dredged material. This process has already been initiated by the borrower. The SAP would provide the technical framework for sampling and analysis for each identified location and would determine the presence/absence of potential toxic chemicals. In the case of a negative determination the project can commence dredging activity any time as there would be no specific restriction on the disposal of dredged material. Evaluation of dredge material management and disposal alternatives - In the case of a positive determination, disposal would be restricted and the project will prepare a Dredge Material Disposal Plan (DMDP). Classification of the sediment according to the level of toxicity and quantification of the dredged material would be pre-requisites to preparing this plan. While Sri Lanka does not have reference standards for sediment quality or technical guidelines on sediment toxicity classification, the project could use the Environmental Improvement Study for the Port Of Colombo carried out in 1999 as a useful reference in developing the required technical framework. As Sri Lanka does not operate large engineered landfills the project will consider other major alternatives available for disposal of potentially hazardous dredged material such as off-shore disposal, incineration and beneficial use. Each of these alternatives involves its own set of unique considerations and hence selection of an alternative will be made based on environmental, technical and economic considerations. Dredging equipment and techniques - The DMDP will also specify the dredging equipment and techniques used for excavation and material transport, which would depend on a number of factors such as sediment quality, type of dredgers available in the country, dredging depth and distance to disposal site etc. Project planning and Information management The SAP and the DMDP will be closely linked to the project work plan and effectively communicated to key stakeholders directly involved, so that proper sequencing and scheduling of activities as well as implementation and monitoring of control measures can take place effectively. The EMF recommends important strategic interventions by the project in order to ensure long-term sustainability and maximum economic returns of its investments. The sustainability of project outcomes, especially those of water management and drainage, would critically hinge upon safeguarding the current system, hence (a) a strategy for conservation of the remaining Colombo Flood Detention wetlands (b) an action plan for solid waste management within the Colombo Metropolitan Area (c) a strategy for water quality management and monitoring within the basin have been recommended as essential contributions by the project. In addition, the EMF also recommends that development of the Strategic Development and Growth Plan for the Colombo Metropolitan Area and the subsequent Master Plan be supported with a Strategic Environmental Assessment, in order to ensure that sustainable urban planning based on the environmental resource base and capacity can be ensured. Sri Lanka has a comprehensive regulatory framework for the protection of its environment and natural resources. By and large, it is consistent with the safeguards polices of the World Bank. Under the NEA, the country s basic national decree for environmental management, all development projects that fall into prescribed categories are required to go through a comprehensive environmental screening and mitigation planning process (EIA or IEE). The Central Environmental Authority (CEA), which is the country s key environmental regulatory agency, has demonstrated technical expertise and a good track record of evaluating environmental impact assessments. It has been determined that the NEA will not apply to the list of 8 sub-projects which are ready for implementation at project onset and is unlikely to apply to any of the subprojects in the pipeline. As such, the safeguards assessment and documentation carried out so far meets primarily the requirements of OP/BP In the event NEA becomes applicable for projects in the pipeline, EIA requirements under the NEA and OP 4.01 will be harmonized. Although the CEA will be little involved in the approval of sub-project, as a member of the project Steering Committee its expertise and guidance is expected to be available. Furthermore, some of the key stakeholders of the project such as the Urban Development Authority, Colombo Municipal Council have experience in EIA related work required by GoSL regulations as well as those of multi-national donors. Implementation arrangements: The main responsibility of ensuring compliance with environmental safeguards requirements of the project will be borne by the PMU which is supported by a full-time environmental specialist who is suitably qualified and experienced in managing urban environmental issues. Among its key tasks, the PMU will be responsible for providing the overall policy direction, technical assistance, review and endorsement of screening reports, environmental assessment and management plans, capacity building for effective safeguards management to the implementing agencies, monitoring of environmental compliance and progress reporting to the World Bank. In addition, the SLLRDC, UDA, CMC and the 3 local authorities will appoint an Environmental Officer as the nodal point directly responsible for the day-today implementation and monitoring of the safeguards at the agency level. While the SLLRDC and the UDA are regularly staffed with Environmental Officers and the project is expected to benefit from the available expertise, Environmental Officers will be appointed to assist the CMC and the other local authorities. They will be primarily responsible for sub-project screening, preparation of environmental assessments/plans, ensuring EMPs are reflected in bid documents, implementation of EMPs at the site level together with site engineer and the Environmental focal point of the contractor and progress reporting to the PMU. The PMU together with the project units in the implementing agencies will encourage community participation in the planning, management, operation and monitoring of sub-projects. In order to ensure safeguard procedures, instruments and monitoring needs of the MCUDP are well understood by its implementing partners, the capacity of PMU and project units in the partner agency will be strengthened with resources available under the institutional capacity component. The PMU will hire consultants to aid the implementing agencies in carrying out sub-project specific screening for the first 5 subprojects under each agency. The respective environmental officers of each agency will work closely with the consultants in order to receive an on-the-job training. The technical assistance thus provided will ensure creating the necessary understanding, standards and capacity within the agencies to carry out screening for subsequent sub-project independently. Where stand alone Environmental Assessments and Management Plans are required as screening outcomes, the PMU will hire independent consultants. All screening reports, EAs and EMPs will be prior reviewed and cleared by the PMU. In addition, screening reports, EAs and EMPs for all Category A type of sub-projects and a sample of Category B type sub-projects will be prior reviewed by the World Bank. For contracts such as dredging in sites proven to be contaminated and for the subsequent disposal of such dredged material, the PMU will hire specialist services who will prepare disposal plans, carry out additional sampling (if needed) and site monitoring, conduct awareness for implementing agencies and contractors of disposal plan, monitor compliance and ensure control measures are adequately implemented. The project will also explore the possibility of building long-term capacity, especially within the participating local authorities, on the management of urban environmental issues, with a focus on solid waste management and environmental monitoring, through training programs and procurement of necessary equipment. Environmental Monitoring: The MCUDP will focus strongly on effective environmental monitoring. While day-to-day monitoring will be largely Page 5 of 9

6 confined to compliance monitoring based on a monitoring checklist and is expected to take place through regular site supervision by the responsible officers, monitoring of environmental parameters (such as air, water, salinity, sediment quality, etc.) will be conducted based on the requirements specified in the EMPs. Most importantly, the project will support independent environmental audits on an annual basis throughout project implementation. Social: Social Assessment. The Government has carried out a Social Assessment (SA) to understand social issues and risks associated with the project and prepared a Social Management Framework through consultations with the key stakeholders and the affected community groups As per the SA, the majority of the works, chiefly improvement of infrastructure such as existing canals, micro/storm drainage, streets, recreation areas, and similar works are expected to have significant positive social impacts by way of improving the urban environment and livability of CMA. Such works would mostly involve temporary risks relating to access, mobility, health, and safety. A major positive impact will be the improvement in living conditions of households in selected under-serviced settlement that would be preventively relocated from low lying floodprone areas to secure housing. Long term adverse impacts of the project are likely to be caused by unavoidable land acquisition and resettlement impacts in some subprojects to be implemented in the later implementation stages. As a result, OP 4.12 on Involuntary Resettlement has been triggered for the project. While the exact number of households and magnitude of private land required for different subprojects is not known, based on the SA, it is estimated that about 1,500 squatter households living in underserved settlements (USSs) around the Beira Lake and along canal banks could be relocated to resettlement sites. Ethnic composition of people living in the project area is similar to that of larger population living in the CMC area. The sample survey showed the population of under-served settlements to be distributed mostly between Sinhalese (38.6%), Muslims/ Malay (31.4%) and Tamil (28.5%). A Bank-financed Livelihood Assessment of Under-Serviced Settlement in floodable areas in CMC is currently being carried out in partnership with UN-Habitat, together with a prominent NGO and a research institute. This study will further deepen the knowledge of these settlements and the findings of this assessment will be available by project launch, further informing the design and implementation of the resettlement process under the project.. Policy and Regulatory Environment: The Government of Sri Lanka (GoSL) has a well developed Land Acquisition (LA) Act with latest administrative regulation of 2008 and a National Involuntary Resettlement Policy (NIRP, 2001) to deal with land acquisition and involuntary resettlement risks. The NIRP (2001) provides for payment of compensation at replacement cost along with adequate resettlement and rehabilitation benefits. The LA Regulation of 2008 provides detailed guidelines for calculating land and structure value at replacement cost and current market value and compensation for damage and injurious affection as well as associated expenditures to the affected people. The government has managed several projects involving LA and IR applying safeguards policies acceptable to external donors such as ADB, JICA, and IDA/IBRD. The capacity and experience of application safeguard legislations and policies have been diverse across projects including some widely acknowledged best practices such as in case of the Lunawwa Project and the Southern Highway Project. Workshops on urban resettlement have been organized over the course of project preparation for the PMU and the stakeholder agencies to strengthen their understanding of social safeguards issues and build their capacity for safeguards management. Social Management Framework: The Social Management Framework has been prepared with sample field survey and a two-stage consultations with the stakeholders including the people likely to be affected. The SMF has been finalized through community, technical stakeholder, public consultation and with the government approval and disclosed. The SMF sets out principles and procedures for: (i) social screening and IR impact survey; (ii) procedure for preparing and implementing RAPs; (iii) legal framework; (iv) entitlement matrix; (v) framework for stakeholder consultation and community participation including of NGOs; and (vi) implementation arrangements (for paying compensation and assistance, relocation and post-resettlement support, grievance resolution, coordination of LA and R&R with civil work, monitoring and evaluation and indicative budget). The SMF also provides guidelines for promoting social accountability/demand side governance measures in the implementation process. The Entitlement Matrix provides the following entitlements: compensation at replacement cost for land and structures, alternative houses to the displaced squatters, shops on lease to relocated commercial units, rental allowance to the tenants, income restoration assistance to shops, property owners, and residences losing employment or income, reconstruction of affected community facilities and mitigation measures for temporary impacts. Gender considerations have been taken into account both at the general level of project design and specifically embedded in the proposed in the SMF. In particular, both women and children are expected to greatly benefit particularly from subprojects of urban scale implemented in the CMC and other local authorities aimed to deliver easy-to-access, open and safe public spaces and playgrounds, with plenty of public lighting along highly frequented streets, parks and beach fronts. The public convenience sub-project will provide separate facilities for women, benefitting especially working women, students and visitors to the city from other parts of the country. Specific gender considerations in the SMF include: (a) provision of title of the alternative house in the joint name of spouses, and in the name of the mother in case of deceased husband; (b) special attention to women headed households with livelihood restoration support; (c) equal provision of employment training opportunities for male and female youths; and (d) gender sensitive provision of facilities in resettlement sites including women and day care centers; (e) and ensuring women s participation in condominium management process. Resettlement Sites: The Government of Sri Lanka is implementing a pro-poor housing program, under which it has commissioned construction of new multi-storey buildings with flats of 400 sft. each in several locations in the Colombo area to re-house people living in USS. Of these, the GoSL has committed to earmark 1,500 flats and a proportional number of commercial units and social facilities to meet the potential resettlement requirements for the MCUDP. The flats will be made available in condominiums, currently under construction in two government sites closest to the MCUDP project areas. The Bank oversight in this regard shall be limited to the relocation of the project affected households in such condominiums. Social Accountability and Inclusion: Specific guidelines for addressing social inclusion and accountability in the resettlement process include information disclosure, consultation, grievance redress, community civil society participation in R/R implementation, special support for displaced vulnerable households to restore livelihoods (e.g. credit access and skill training support for youths from vulnerable resettled families, continuation provision of government welfare poverty alleviation schemes (samrudhi, old age pension) for eligible resettled families, extending housekeeping assignments at resettlement sites and employment in project related works, and opportunity to avail of a shop at the resettlement site on long term lease. Resettled families losing livelihood will receive cash assistance to enable re-establishment of their income Implementation Arrangements: The PMU has identified UDA as the nodal agency for coordinating LA and R&R activities for the Project. 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7 PMU has appointed a senior officer of the UDA managing the urban resettlement scheme as the director of its social unit. UDA has a large social survey team and has established database management systems for planning and implementing the urban resettlement scheme. In Sri Lanka, land acquisition is undertaken by Ministry of Land through their divisional secretaries, and the PMU will appoint a special officer for coordinating LA activities. Each major PPA such as the SLLRDC, CMC, and UDA has special land acquisition cells. Key institutional arrangements for implementing SMF/RAP will include: (a) establishment of Social Management Cell at the PMU and, as necessary, and establishment of Land Acquisition and R&R cells in each project partner agency (PPA) to carry out/coordinate social screening and impact survey; prepare and implement RAPs for the Stage-II activities (with the help of external consultants if needed); (c) unified mechanism at UDA to address and monitor post-resettlement sustainability issues; (d) a multi-stage Grievance Resolution Mechanism; and (e) Independent Safeguard Monitoring and Review Mechanisms. A Metro Colombo Stakeholder Forum (MCSF) will be established, which will be an advisory body including representatives from government, professional experts and civil society for discussing overall progress, issues of importance, and providing advice to the PMU. A Steering Committee of relevant government departments will be established to review progress and ensure implementation coordination at the highest level. These bodies will meet periodically, in which the designated officers or their representatives will participate. Key safeguards compliance arrangements will involve instituting systems and capacity for safeguards management at the PMU and sub-project implementing agencies. This will include: establishing an inclusive Land Acquisition and Resettlement Committee (LARC) for the Project, hiring of social development specialists for PMU and social development officers (SDOs) to assist implementing agencies handling resettlement activities; mobilizing community development officers (CDO) from the social welfare department field level operations and hiring Consultants for resettlement planning and NGO for implementation support; and establishing Land Acquisition and R/R capacity in implementing agencies. MoDUD will establish mechanisms for independent monitoring and quality audit of the safeguards management including land acquisition, R/R and EMP. The safeguards monitoring and review consultants will provide quarterly implementation progress reports (QPR) and yearly Safeguard Review Reports. Social accountability measures proposed include information disclosure, civil society participation in planning and monitoring of the project; and grievance resolution mechanisms.. Linking Social Management Actions to Civil Works: Social Screening will be carried out for each activity and based on the magnitude of impacts and scale of resettlement required, SIAs will be commissioned through independent consultants or will be carried out by the Social Development Specialists with the help of Social Development Officers. Based on the SIA, RAPs will be prepared in consultation with the affected communities and disclosed. The eligibility lists will be disclosed at the community and at the implementing agency level for objections before finalizing the same. Eligibility will be determined on the basis of census survey and once the beneficiary list is finalized, the affected families will be issued Family Identity Cards. The LA and R&R benefits will be provided before handing over the site for civil work. The Chief Engineer from the concerned implementing agency will certify that the necessary actions have been completed as per the RAP for handing over encumbrance free land for civil work. The SMF provides for giving rental allowance to the affected families till final relocation in permanent buildings in the case of emergency shifting. A Multi-stage Grievance Redress Mechanism will be established, with clear procedures for handling PAP complaints at local, sub-project implementing agency, PMU, and department levels. Above this, there shall be an Independent Grievance Panel (IGP) comprising representatives from the Ministry of Land, Department of Valuation, Ministry of Women Affairs, in addition to an eminent NGO, a lawyer and a retired civil servant of the rank of a Secretary of the GoSL to hear and resolve complaints unresolved by GRCs operating in the Project. There shall be a Technical Assessment Committee instituted by the PMU comprising structural engineering and survey experts to aid and advise the LARC and IGP in resolving compensation related issues. SMF requires holding consultations during resettlement planning and implementation to discuss risks, entitlements, RAPs, and relocation and site handover schedules; and disclosure of relevant documents on project website, in newspapers, and public project outreach centers established at the PMU and implementing agency levels.. Monitoring and Evaluation: The PMU will hire external consultants/ngo for providing need-based implementation support to the PPAs and for carrying out independent monitoring and quality assurance. The Project will have a participative implementation monitoring system established at the bottom, which will enable the local resettlement committee to participate in the implementation process in planning and monitoring roles. The PMU will submit quarterly implementation progress and quality monitoring reports with yearly safeguard reviews which will be carried out by independent consultants. These will form the basis for any improvements to be brought about in the safeguard policy framework and implementation arrangements. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Environment During preparation of the EMF, EA and screening reports for the 8 selected sub-projects for implementation in year 1, the public/ communities in project sites have been consulted to hear their concerns about the projects environmental impacts and the outcomes have been documented. In general, public opinion of the project from an environment perspective is largely positive and welcomed. In addition, consultations with other primary stakeholders such as the implementing partners (SLLRDC, UDA and the 4 LAs) and regulatory agencies (CEA) have been carried out during this time and documented. The EMF and the EA have been placed in public domain in-country and through the World Bank s Infoshop since 16/11/2011and will comply with the 120 day disclosure requirement of a Category A project. On 25/01/2012 the public was invited to a hearing on the safeguard documents disclosed through a media notice where an opportunity was provided to the public to discuss the project design, its environmental and social implications. Similarly, for all types of environmental analyses conducted subsequently, affected communities would be consulted, process documented and account taken of the results of consultation, including any actions agreed resulting from the consultation. Public disclosure of the relevant safeguards documentation will be a pre-requisite for bidding of works contracts. The contract documents for each contract package will mandatorily include the relevant environmental mitigation provisions stipulated in the EMPs for the given sub-projects in order to ensure contractor compliance with the safeguards requirements. Social: Primary stakeholders include the affected persons, the beneficiaries of the project, the host population of the transit and resettlement sites, the project partner agencies such as SLLRDC, UDA, LAs and more importantly the project proponent and the Ministry of Defence & Urban Development and Ministry of Finance. The secondary stakeholders are the others who have an interest on the project such as the National Government, the political authority, policy-makers, advocacy groups, NGOs and other private and public sectors which have indirect involvements with the project. Most of the people likely to be affected live in under-served settlements (USS) without secure tenure; have informal incomes and access to minimum basic services including water, electricity, and common toilets; and are poorer than the mainstream population of the metropolitan area. Some of them belong to linguistic or religious minorities, but not indigenous communities. The SA and SMF were prepared after sample Page 7 of 9