Social Due Diligence Report of Dalkia (Jiamusi) Heating Network Project for the PRC: Municipal District Energy Infrastructure Development Project

Transcription

1 Social Due Diligence Report August 2012 Social Due Diligence Report of Dalkia (Jiamusi) Heating Network Project for the PRC: Municipal District Energy Infrastructure Development Project Prepared by Dalkia (Jiamusi) Urban Heating Co., Ltd. for the Asian Development Bank (ADB) This social due diligence report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or.

2 Social Due Diligence Report Of Dalkia (Jiamusi) Heating Network Project Dalkia (Jiamusi) Urban Heating Co., Ltd. 24 th August 2012

3 CONTENT 1 Project Introduction Construction Employment of Workers From Connected Small Boiler Conclusions Corrective Plan Appendix TABLES AND FIGURES Table 1 - Statistic on Primary and Secondary Pipelines Occupancy ( ) Table 2 - Statistic of Substations Occupancy Table 3 - Employment of Workers of HOBs Connected ( ) Figure 1 - The Main Pipe Network ( ) Figure 2 - Office Area for Project and Self-provided Boiler House Figure 3 - Small Boiler House Connected and Substations 1

4 1 Project Introduction 1.1 Dalkia (Jiamusi) Urban Heating Co. Ltd. Dalkia Jiamusi was incorporated in April 5, The Company is a sino-foreign joint venture between Dalkia and Jiamusi New Times Urban Infrastructure Investment (Group) Co. Ltd., which belongs to the municipality of Jiamusi and which is a substitute for the original Jiamusi Heating Company J(C. Dalkia Jiamusi has a concession for a 25-year-duration to manage the former J(C s heating network and treble its size. 1.2 The concession of Dalkia Jiamusi is located in the downtown of the city of Jiamusi. Its service scope is east to Yindamu River, west to Yinggetu road, south to Shengli road and north to south bank of Songhua River as shown in Figure 1: Figure 1 - The Main Pipe Network ( ) 1.3 Reconstruction of old pipe network and construction of new heating pipe and connection project Within 5 years, Dalkia Jiamusi has invested in the construction and the reconstruction of the heating network (including newly-built primary and secondary pipelines for a total 14 kilometers). Dalkia Jiamusi has also invested in the reconstruction and new construction of 278 substations with 312 sets of heat exchangers units. 1.4 Dalkia Jiamusi is mainly involved in heating distribution. It owns two networks (interconnected). The following table summarizes the distribution system to supply heat to the networks: West network East network Heating Seasons Heating Seasons 10/11 11/12 10/11 11/12 Primary Network Length (km) Number of Substations Primary Network Temperature 120 C / 70 C 95 C / 60 C The main heat production sources are from two cogenerations which belong to third parties. They are located at the West and East sides of Jiamusi. Dalkia Jiamusi also owns a big boiler, Jingjiang, located in the northern part of the town of Jiamusi, and four small peak-boiler s (which heat small s outside the two networks). The following table summarizes the production system to supply heat to the networks: 2

5 Supply of network Capacity West Cogeneration East Cogeneration Jinjiang Boiler House Small Boiler Houses West East West Not in the network covered Boilers 2 x 220 t/h Boilers 1 x 1,050t/h Boilers 3 x 29MWth Turbines 1 x 50 MWe Turbines 1 x 300 MWe (+ 1 x 29 MWth back-up) + 1 x 25 MWe Boilers 7.35 MWth Heating has increased from 5.7 million sq. meters to 10.6 million sq. meters. End-users have also increased from holds and more increased to 110,000 holds. 1.5 Plan to build a new boiler as a heat source. Dalkia Jiamusi faced, during last heating season, the problem of saturation from the two third-party cogenerations, the main suppliers of heat; this saturation is mainly due to a lack of maintenance over the years which led to an important deterioration of the heat capacity. This situation not only impacted on Dalkia Jiamusi s operation, but also impacted on heat supply to end-users. The actual heating quantity of Jiamusi East Cogeneration and West Cogeneration could not satisfy quantity demand, and therefore Dalkia Jiamusi was not able to ensure heating demand for new buildings. The plan is to build 1 x 58 MWth CFB hot-water boiler during year This boiler will be located in the northeast of the west cogeneration site in an of 1.8 hectares of empty land. This boiler will enable Dalkia Jiamusi to heat around 1 million sq. meters. The Investment is estimated to reach around RMB 60 million. As of August 2012, only the design has been prepared and the construction period may start soon. The operation commencement date is expected to be in the second of half of December Construction 2.1 Dalkia s Jiamusi assets and land used for the Project The office of Dalkia (Jiamusi) is in the form of a lease. The Chinese partner contributed to the JV with the former J(C s boilers s, network and substations. These assets belong to Dalkia Jiamusi which uses them without any compensation. There were no land occupation and resettlement issues. Figure 2 - Office Area and Self-Provided Boiler House 3

6 2.1.2 Land occupation for the new boiler. This land belongs to the West Cogeneration and has been allocated by Jiamusi government to this company when it was set up (built in 1992, and began to operate in 1998) and no relocation happened. It was originally a wasteland for flood discharge of the Songhua River, but the local government built a flood control dam at 1 kilometer of the north of west cogeneration. Now, it is used by the West Cogeneration to store ash; currently this land is empty no ashes have been stored. Due to the current problem of lack of heat, the local government has decided that this land will to be used to build the new heat source (the project is highly promoted by Jiamusi local government) and thus the land will be sold to Dalkia Jiamusi. 2.2 New Primary and Secondary Pipelines From 2008 to 2011, 14 kilometers of new primary and secondary pipelines were built. Main part of the network was contributed by the Chinese partner to the JV. Primary network is built on the both sides of urban road and bury under the sidewalks. To build the network, the company has to pay road digging cost and road recovery expenses to Urban Construction Management Bureau before the construction can start. So, pipelines construction did not involve any LA & R problems. By 2011, road digging and occupying fees amounted to RMB 123,698.2 in total (actual incurred costs after remission from Jiamusi local government). The details are shown in Table 1: Table 1 - Statistics on Primary and Secondary Pipelines Occupancy ( ) No. Name of Road Length of the Pipelines (Unit: m) Wide of the Pipelines (Unit: m) Construction Period (Y/M) Road Dig Fees (RMB) 1 South of Yong Yi road No.1 high school connection Remission Remission Remission 5 Xing Lin road Remission In the north of Changan road in the north of Xing Lin road Remission Remission Remission Remission 10 Jian Guo road Remission Remission Remission 13 Zhong Xin street Remission 4

7 14 Xin Min alley Remission Remission 16 Qun Ying alley Remission Subtotal of 2008 length of pipe In the east of Tong Jiang street In the east of Tong Jiang street Remission Remission 2,301.6 subtotal in , , , Road in factory Remission Pass Fu Xing alley to In the north of De Xiang road Pass Chang Qing road to The north of Changan road South of Yong Yi road to South of Bao Wei road Subtotal of 2009 length pipe Remission Remission , Remission Remission , Remission Remission , Remission 1, subtotal in , , , Remission Remission Remission Remission 5

8 Crossing of Sheng Li road Crossing of Xi Lin road Remission Remission , Chun Guang Hu Tong , , Xin Li Hu Tong Remission 48 East of Song Lin street , Tang Fu alley Remission 50 Xi Lin road South of Yong He alley South of Changan road, Jian Guo road Remission Remission , Jian Guo road Remission North of Changan road South Xin Lin road, He Ping road Remission , South of Jie Fang road Remission 58 Xin Yi Hu Tong , South of Guang Fu road Subtotal of 2010 length of pipe Remission 4,163.1 Subtotal in , Yong He alley Remission Remission 63 Wei Xin street Remission 64 Xing Lin road Remission Remission 66 Guang Fu road Remission Remission 68 Xing Cheng Hu Tong Remission Remission 6

9 70 Chang Qing road Remission 71 Chang Qing road Remission De Xiang road, Zhong Xin street Remission Remission Remission 75 Road in school Remission North of Xing Lin road Remission Remission 78 Yong Tai street Remission Tai Feng alley, Fu Feng street, Pass through Jian Guo road Remission Remission Remission 82 Zhao Guo Hu Tong Remission South of Pu Dong 83 street Fruit Product 84 company boiler's connection Total of length of pipe in 2011 Accumulative of length of pipe Remission Remission Remission Remission Remission Remission Remission 6, Road break/dig fees 14, total 123, Substations In order to stop small boiler s which are highly pollutant, construction of substations are necessary (it is also according to Jiamusi municipal Party committee and Jiamusi government plans). Each year, Dalkia Jiamusi has the obligation to connect new s/ customers. With the expansion of centralized heating networks, the connected small boiler s are either dismantled or can be replaced by substations as well. 7

10 Figure 3 - Small Boiler House Connected and Substations By the end of 2011, there were a total of 66 new substations, with a total land occupation of around 4,000 sq. meters. Among them, there are 10 substations which used the existed basements of buildings, 35 substations which used the location of the dismantled connected small boiler s, 19 substations which used the land freely supplied by related property management companies or municipal government, 1 substation for which location is leased and 1 substation which used the original location of a substation (agreed with the owner). As the construction of the substations is to contribute to and improve public services. Dalkia Jiamusi did not need to pay for the occupied state-owned land according to relevant policies of Jiamusi. Detailed information is shown in Table 2: Table 2 - Statistics on Substations Occupancy No Location Guo Maitong Water product Shu Xiangyuan Floor (m2) Using existed basement Using existed HOBs Period of connection Was it newly built? (Neither use basement nor original boiler ) 80 N Y 2008 N 30 N Y 2008 N 40 N N 2008 Y 4 Bo Fan 756 N Y 2008 N 5 Transpotation Company 80 N Y 2008 N 6 Sanshine 30 Y N 2008 N 7 8 Traffic team No.9 middle school 20 N Y 2008 N 40 N Y 2008 N Source of newly-built substation s land (Does it transfer by government in free? Supply by developer in free? Or other reasons) owners school 8

11 9 Jing Yuan Mix-water station 30 N N 2008 Y 10 Nei Pei 40 N N 2008 Y 11 Da Zhan 40 N Y 2008 N Tian Qi 1# Tian Qi 2# 30 N Y 2008 N 70 N Y 2008 N 14 Hui Yuan 120 Y N 2008 N 15 Fu Lian 30 N N 2008 Y 16 Heng Ji 120 Y N 2008 N Pu Ruite Boiler House Fire Control branch Yuandong Yanjiang Zhong Fang 50 N Y 2008 N 60 N Y 2008 N N N N (Used the original sub.) N Y 2009 N 21 Fu Tai N Y 2009 N 22 Outskirt agricultural machinery N Y 2009 N 23 Ji Xing N Y 2009 N North Yong Hong Traffic branch Xu Fu garden Y N 2009 N N Y 2009 N N Y 2009 N 27 Hotel 40.2 N Y 2009 N Fuli Qianjia Technology School No.10 primary school Fu Xing Installation 80 N N 2009 Y 48 N N 2010 Y 60 N N 2010 Y Fire control branch Took advantage of own substation agricultural machinery bureau hotel 24 N N 2010 Y Lease

12 Education 6# Outskirt Labor Service KOKO family building Electricity Power 60 N Y 2010 N 60 N N 2010 Y 60 N Y 2010 N 48 N N 2010 Y 36 Xin Da 30 N N 2010 Y Cheng Jian Education Jizi building Outskirt Council of Agriculture Tang Fu garden 60 N N 2010 Y 60 N Y 2010 N 40 N N 2010 Y 40 N N 2010 Y 41 Jia He 1# 80 N Y 2010 N Sanjiang Gree Deng Feng district gvt Hui Xinyuan Chen Xing Electrical Machinery Plant 80 Y N 2010 N 30 N Y 2010 N 30 N N 2010 Y 50 N Y 2010 N 24 Y N 2010 N 47 Hai Ge 30 N Y 2011 N 48 Hong An 60 Y N 2011 N Hong Da commercial center the north of Hongda Second campus For No.1 high school Bus company Xing Hua Jie Kun Hua Qiao Hotel 80 N Y 2011 N 15 N N 2011 Y 40 N Y 2011 N 40 N Y 2011 N 30 N Y 2011 N 24 N N 2011 Y Free transferred by government school 10

13 55 Xin Bao 24 N Y 2011 N Price Bureau Children warfare institute 80 N Y 2011 N 80 N N 2011 Y 58 Xing Hua 30 Y N 2011 N Shunt family building Fruit product Animal Market Dong Feng Tong Fu garden 32 N N 2011 Y 24 N Y 2011 N 20 N Y 2011 N 18 N Y 2011 N 60 N N 2011 Y 64 Hong Da 80 N Y 2011 N Education 5# Jiongchang Shiye 20 Y N 2011 N 40 Y N 2011 N institute 3 Employment of Workers From Connected Small Boiler From 2008 to 2011, there were 102 small boilers s connected. 659 affected workers are male, and 30 are females including 191 of non-temporary employees, and 468 of seasonal employees. Before the connection, their average wage per month was RMB 1,062; and after the connection it is RMB 1,385. Rights and interests for these laborers were ensured as these employees were provided with strong support for re-employment. The measures taken for the employees are as follows: 3.1 Measure A: 22 fixed employees worked for before connection. These employees already have a position such as security guard and maintainer. Because of seasonal demand, they were assigned as stokers for the operation and maintenance of small boilers in winter. According to the local policies, after connection, these people no longer need to work in the boilers, but still work for. No laid-off workers. 3.2 Measure B: 78 fixed stokers were assigned to work in other boilers. According to the local policies, small boiler s must to be connected to centralized heating network; but because of insufficient heat source due to the urbanization development or because Dalkia Jiamusi s current network does not reach certain s yet, therefore the local government allows the construction of regional centralized boiler s. These stokers are usually technicians (with certification) and were assigned to work in other boilers by. Work is stable, and income is higher compare to before. According to the survey and consultation of some workers, they are satisfied with their employment arrangement. 11

14 3.3 Measure C: 71 fixed employers (incl. 15 female employees) are hired by school, government and public enterprises. After connection, according to the Labor Law of PRC, they were assigned to new positions such as security guard, cleaner by their original units, without changing salary, insurance and welfare. 3.4 Measure D: For the 468 seasonal employees, according to the Employment Contracts Law (2008) and Labor Law of PRC (1994), fixed term labor contracts were signed between the employees and the employers. These seasonal employees work from October to April (heating season). After the heating season, the contracts are automatically terminated. After the heating season, the government will inform the units which will be connected to the centralized heating system; the units will thus not go to the labor market to employ seasonal employees. The local government set up labor market divided into administrative districts to provide better and more information regarding re-employment opportunities for seasonal workers. 3.5 Measure E: 50 full-time workers (incl. 15 female employees), who were near the age, were entitled to advanced based on the voluntary application according to rule of Labor Law of PRC. Table 3 - Employment of Workers of HOBs Connected No. Unit Related Heated by HOBs m 2 Am oun t Workers Affected Male Fema le Avera ge age 12 Status of workers Fixe d Casua l Average monthly wages before connecti on (RMB) 1 Tian Qi 1# Tian Qi 2# Guo Maitong Water-prod uct Zong He builidng Shu Xiangyuan Arrangement for employment after connection (whereabouts, compensation) Measure A; JMS Yangguang Measure A; JMS Yangguang compensated for six Measure C; Guomaitong Company Measure A; JMS Yangguang compensated for three Measure A; JMS Yangguang compensated for seven Average monthly wages after connecti on

15 6 Xin Da 1# Tian Fa Transporta tion Company Yan Jiang Sunshine Xin Cheng Hui Yuan Dong Feng traffic branch No.9 middle school Zong He building Shi Yan kindergarte n Cable factory Measure A; Xing Ye compensated for three Measure C; Transportation company Measure A; JMS Yangguang Measure C No.9 middle school compensated for six Measure C; Kindergarden compensated for three 13

16 Qian Jin district people's court Mo Fan Training center for wonmen and children Conmustio n engine No.7 middle school Jing Yuan Trade center Heng Ji Zhongshan Mingyuan Jixing 1# Fire control branch Municipal governmen t 1,2# Measure A; San Tong compensated for three Measure C No.7 middle school Measure E Measure E compensated for six Measure B 3 persons Measure A San Tong Measure C fire control branch

17 Party school Zong He building No.1 high building Yong Hong traffice branch Ji Zi building Ji Yun Chang An square Postal service Zong He building Outskirt agricultural machinery bureau Jiamusi hotel Xue Fu garden Zhong Fang big world Ji Xing Zong He North Measure C Party school compensated for six Measure C No.1 high school Measure C Yong Hong traffic branch compensated for three Measure E Fixed employees compensated for three Measure C postal office compensated for seven Measure C Outskirt agricultural machinery bureau Measure C JMS hotel Measure A San Tong Measure A San Tong Measure A San Tong

18 41 Bearing plant Fu Xing Yuan Dong Yan Jiang Yuan Dong grain depot East of beer brewery South of beer brewery Xing Cheng stomatologi cal hospital Fuli Qianjia Sausage company Yu Long company Dong Feng court Measure E compensated for six Measure C beer brewery Measure A Measure C stomatological hospital compensated for seven compensated for three Measure C hotel Measure C Yu Long Company Measure C Dong Feng court compensated for seven

19 52 Sen Yu Education 6# He Ping AB building Cheng Jian Zong He Ji Zi building Outskirt labor service Dong Fang garden 4# Mu Gongshang Outskirt committee of agriculture Tang Fu garden (Peng Ji 3#) Dong Feng district governmen t Measure C Education bureau compensated for three Measure C Education bureau Measure C Outskirt labor service Measure A Measure C; Outskirt committee of agriculture compensated for six compensated for three 17

20 64 HuiXinyuan 2# San Jiang Xing Chen Yongan Power Zong He builidng Electrical Power bureau Antong property Justice bureau Xin Da 2# Zhongfang Yijing Xing Xiayuan Measure C Electrical Power bureau compensated for three Measure C Electrical Power bureau compensated for three compensated for seven Measure A 18

21 75 Hong An Tong Fu family land Planning institute Xing Hua No.2 primary school Shunt family building Hua Qiao Hotel Tongyuan Haige Bus company building Ru Yi Xinghua Jiekun Ba yi hotel Measure A Measure C planning design institute Measure C No.2 primary school Measure C Shunt family building compensated for six Measure C Hua Qiao hotel compensated for seven Measure A Measure C bus company Measure C Ru Yi building Measure C Jiaxi hotel

22 87 88 Fruit product Company Education 5# Xin Bao Price and traffice Animal market No Dong Feng distric policemen residntial building Changchen g Hotel Hua Gong builidng 9# Hong Da golden triangle Hong Da commercial center Measure C Fruit product company Measure C Education bureau compensated for six compensated for nine Measure C No.11 middle school Measure C Changcheng hotel 20

23 the second campus of No.1 high school Ocean Wave Palace Harvest Children welfare association NSA Note: Compensations are provided directly by original employing units. Measure C No.1 high school Measure C Measure B boiler Measure C Department of Civil Affairs Measure C NSA compensated for six 4 Conclusions 4.1 The office of Dalkia (Jiamusi) is rent (5,000 sq. meter of floor ), and is located in 82-1, Heping road, Qianjin district; terms of tenancy is 10 years. The Chinese partner contributed to the JV with the former J(C s boilers s, network and substations. Dalkia Jiamusi is the owner of all these assets and no land occupancy and resettlement issues were raised. 4.2 Land occupancy for the planned new-build heat source. This land was granted by Jiamusi local Government to the West Cogeneration. It is an empty land at present, but can be used as ash storage by the West Cogeneration. The local government granted Dalkia Jiamusi with the right to use this land and Dalkia Jiamusi will have to pay land-transferring fees to government. 4.3 New primary pipelines are built along the road. Dalkia Jiamusi needs to pay road digging costs and road recovery expenses to the municipality. Dalkia Jiamusi is not involved in any land reception and resettlement problems in the process of pipelines construction. 4.4 Among the 66 new-built substations, there are 10 substations which used the existed basements of buildings, 35 substations which used the location of the dismantled connected small boiler s, 19 substations which used the land freely supplied by related property management companies or municipal government, 1 substation for which location is leased and 1 substation which used the original location of a substation (agreed with the owner). 21

24 As the construction of the substations is for public services, thus according to the related policies, Dalkia Jiamusi did not have to pay any costs for the land use. 4.5 From 2008 to 2011, Dalkia Jiamusi connected 102 small boiler s. Affected workers amount to 689 people and re-employment arrangements and support plans were provided. Local government bureaus and Dalkia Jiamusi worked closely together to address the re-employment issues to comply with the China Labor Law. 5 Corrective Plan 5.1 Training on ADB s policy on resettlement and Social Protection Strategy for capacity building are necessary for the staff, especially at the project company level. 5.2 As of today, because of the lack of heating supply will remain an issue for the heating season , so there is no plan to connect small boiler s this year. However, if such plan should be implemented in the future, Dalkia will therefore work closely with all the stakeholders and prepare a report to address the issue to ADB. 22

25 6 Appendix Appendix 1shows the notification for the connection of small boilers issued by Jiamusi heating office. 23

26 24