Projects

LOAN Nos. 1410-THA, and 1646-THA: Samut Prakarn Wastewater Management Project
Aide Memoire
of the
Asian Development Bank Mission
for the
Pollution Control Department
Special Review Mission
(19-28 June 2000)

I. Introduction

1. At the end of the Bank's 33rd Annual General Meeting in Chiang Mai 6-8 May 2000, the Bank undertook to respond to a series of demands and concerns by nongovernment organizations (NGOs), covering Bank policies, as well as some specific issues relating to projects in Thailand. An interim response was prepared and distributed during May 2000, and a consolidated set of detailed responses was prepared, and handed to a representative of the NGO Coordinating Committee for Development (CCD) in Bangkok in June 2000. The responses on project specific issues were prepared with the project owner, the Government. In agreeing to the responses, the President of ADB stated... ."ADB should ensure consultation with NGOs and people, especially those who are most affected by the project. I assure that this will indeed take place"... .

2. The Bank undertook to field special review missions to Thailand before the end of June 2000 to provide further review and demonstrate transparency to all parties. Consequently, a Mission visited Thailand, 19-28 June 2000 to conduct a special review for the captioned Project, together with the Executing Agency, the Pollution Control Department (PCD).¹ This Aide Memoire (AM) summarizes the Mission's findings with respect to the special review. The review addresses the key issues and concerns of the community affected by the Project, as well as those of the NGO Coordinating Committee on Development (COD), the Network of 38 People's Organizations, and the Japanese NGO, TERRA. It also takes into account other comments and issues raised whilst the Mission was in-country. Following a request by the leader of the Klong Dan community, Chalao Thimthong, to the President of the Assembly of NGOs for the Protection and Conservation of Environment and Natural Resources (PCENR) for assistance, the Mission met with the community of Klong Dan, including NGO and media representatives. In addition, the Mission met with the Minister for the Ministry of Science, Technology and Environment (MOSTE), senior officials of the PCD, the turnkey consortium, and the project management consultants. A list of key persons met by the Mission is given in Annex 1.

II. Background

3. Samut Prakarn is the most heavily industrialized and polluted province in Thailand; refer maps in Annex 2. It is located in the south-eastern area of the Bangkok Metropolitan Region, at the mouth of the Chao Phraya River. In 1993, the Cabinet declared the province as a "pollution control zone", to enable the PCD of MOSTE to arrange for urgent and special development assistance to be focused in this area. In 1993, the Bank approved a technical assistance (TA) to help the Government address the wastewater problems of the province, and in April 1995 the TA was completed, including a feasibility study and project design.² Based on the findings of this TA, a Bank loan of $150 million was subsequently approved in December 1995 to assist the Government in undertaking the Samut Prakarn Wastewater Management Project (Loan No. 1410-THA). The loan was declared effective on 29 October 1996, with a scheduled Project completion by 30 June 2001. In 1998, the Government requested supplementary financing from the Bank to cover Government budgetary shortfalls arising from the 1997 financial crisis. In response, the Bank approved a supplementary loan (Loan No. 1646-THA) to meet the financing deficit for the Project on 3 December 1998, which extended the overall Project completion date to 31 December 2003.

III. The Project, and its Current Status

4. The main objectives of the Project are to improve environmental quality, and public health and welfare in Samut Prakarn province by providing reliable and cost-effective wastewater collection and treatment facilities for the most developed urban and industrial districts in the province. To complement these facilities, programs are being implemented to improve environmental monitoring and enforcement, as well as industrial pollution prevention and cleaner technology transfer.

5. The Project consists of the following components:

(i) a wastewater interception and collection system comprising trunk sewers (about 125 km), secondary and tertiary sewers (about 200 km) on the east bank and on the west bank of the Chao Phraya River; rehabilitation of existing combined and separate sewers (about 25 km); and associated works;

(ii) wastewater treatment and disposal facilities with 525,000 cubic meters per day (m3/d) capacity;

(iii) equipment and instrumentation for wastewater and effluent monitoring systems as well as training for both permanent and mobile sampling and testing facilities;

(iv) a program for cleaner production for industrial efficiency; and

(v) a capacity building program for managers and senior technical and financial personnel, and training for technicians involved in wastewater collection and treatment operations supported by the establishment of an onsite training center.

6. The total Project cost is estimated at about $755 million equivalent, or Baht29,445 million. The exact amount in dollar terms varies depending on the exchange rate applicable at the time funds are disbursed. The Bank is financing $230 million, the Japan Bank for International Cooperation (JBIC) is financing a fixed amount of Baht1,750 million equivalent through its sector loan to support the Environment Fund, and the Government is providing the balance. The primary demand on the funding is a turnkey contract for the design, construction and operation (three years) of the wastewater management system (items (i) and (ii) above). This contract was signed between the Government and a joint venture of companies on 20 August 1997, and was denominated in foreign exchange ($134 million) and local currency (B19, 506 million). At this time, there is significant physical progress on the siteworks for the treatment plant, and the progress on the collection system is well advanced. Overall project completion is estimated at 42 percent in terms of total expenditure (including land acquisition), and 22 percent when expressed in terms of construction completion (excluding land). It is currently over 12 months behind the original schedule, and extension of time claims are pending. Completion is now estimated at February 2005.

IV. Setting

7. At the beginning of the Mission, it was understood that the issues and concerns of the community and NGOs relate largely to potentially adverse environmental impacts, lack of community consultation, non-compliance with Bank policy, and irregularities with regard to land acquisition. During the Mission, it became apparent that the Klong Dan community are also concerned about the potential adverse impacts on the its economic base - mussel farming. Following initial discussions with various stakeholders, and after a review of the press coverage of the Project over recent months, it became clear to the Mission that there is a lot of misinformation being circulated about the Project. This undermines any attempt to reach a consensus on Project aspects between all the stakeholders. With this in mind, the Mission describes below the salient features of the Project's development history having relevance to the issues raised.

V. History of Salient Events

8. In 1994/95, a team of international and domestic consultants financed under Bank technical assistance (TA), undertook a feasibility study and project design for "Wastewater Management and Pollution Control in Samut Prakarn". The team identified some 13 options during the feasibility study for wastewater management, covering both centralized and localized treatment systems. Using a combination of environmental, social, technical, and financial parameters, the options were assessed and ranked. With regard to the environmental aspects, the selection process incorporated initial environmental examinations (IEE) for each option. The IEE serves to (i) estimate the probable negative environmental impacts for ranking purposes; (ii) determine whether a more detailed environmental impact assessment (EIA) is necessary for the option selected; and (iii) if so, define the scope of the EIA. The IEE assessments concluded that... "no impact is considered so serious to exclude any wastewater strategy option based solely on environmental studies apart from the extra effort in the engineering design work;"... . The highest ranked option offering the optimum solution however, was to utilize a centralized wastewater management concept. The concept as reflected in the feasibility study incorporated a wastewater treatment plant on both the west and east banks of the Chao Phraya River; 125,000m3/day capacity on the west bank, and 400,000m3/day capacity on the east bank. Effluent discharge for the west bank was proposed by marine outfall into the upper Gulf of Thailand, and for the east bank at shoreline discharge points. On the basis of these proposals, the Cabinet approved the Project on 17 October 1995 for a total Project cost of Baht13,612 million. ADB approved a loan to support the Project in November 1995, for $150 million, and JBIC agreed to provide some Yen7 billion through its sector loan to the Environment Fund. The Cabinet approval described one plant to be located in Bang Pla kod district (west bank), and the other in Bang Po Mai district (east bank).

9. Land requirements for the Project were considerable (330 ha for the treatment facilities alone), and the Government expected to encounter some difficulties in acquiring the land, which may have resulted in substantial delays. As a means of addressing these issues, the Project was approved by both the ADB and the Government on the basis of turnkey contracting for the design, construction and operation (three years) of the whole wastewater management system as a means of expediting progress; one turnkey contract was proposed for each of the banks. To avoid the protracted and difficult procedures involved in the expropriation laws of Thailand, it was decided to acquire land at market prices using land brokers to identify and organize consolidated land parcels. The acquisition procedure was included as part of the turnkey contract bid. PCD provided prequalified turnkey bidders with a shortlist of nominated land brokers, which had a demonstrated ability to provide the required land. The successful turnkey contractor then became responsible for the actual land acquisition, and the subsequent transfer to the Government. The successful bid was to include a detailed description of the land to be acquired, including location, use, and current ownership status. The actual prequalification procedure for the land brokers commenced in February 1996, through calling for registration of interest in newspapers, and culminated in July 1996 when PCD forwarded the names of two qualified brokers to the shortlisted turnkey bidders who, in turn approved the list. The prequalification of the land vendors was done by a committee, appointed on 30 April 1996, and included representatives of PCD, the Land Department, and the Samut Prakarn provincial administration. On 23 July 1996 the committee identified two qualified brokers for the east bank, and none for the west.

10. The turnkey bidding process was based on a two-step procedure. Step one comprises a technical proposal, and step two comprises an improved technical proposal, together with the financial proposal including land price. During the prequalification process, and in discussions with the companies expressing interest, the PCD became aware that significant savings could be achieved through the consolidation of the two turnkey contracts into one. Furthermore, the PCD maintain that the rationalization of two plants into one was proving to be more cost-effective, especially in view of the fact that available land was difficult to find (and very expensive) on the west bank and the potentially very long outfall requirements west of the Chao Phraya River. Based on these more detailed information, PCD prepared preliminary estimates for the option of constructing a single plant system with transfer of the flows from the west to the east bank. The estimates indicated that some Baht800 million saving could be achieved as a result of utilizing one plant instead of two, Consequently, turnkey bidders were invited to submit bids for either option. Following the prequalification procedure, four turnkey bidders were invited to tender in June 1996. For the step one proposals, which closed on 7 October 1996, only two bidders submitted tenders. Both tenderers submitted alternative bids that included the option of one plant being built on the east bank, and connected to the west bank system by means of a tunnel under the Chao Phraya River. One of the tenderers also included a two-bank option comprising separate sewer systems.

11. In July 1996, the Committee for the Management of Road Traffic made a decision, that construction in roadways in Bangkok and the suburbs must be carried out in such a way that does not disrupt traffic. For the Project, the impact was to turn to a trenchless means of installing sewers, e.g. tunneling. This had an impact on the cost of the Project, and on 17 February 1997 the National Environment Board resolved that, despite the substantial increase in budget requirements, the Project was of such environmental significance, it should proceed. Consequently, Cabinet approved a budget increase from the original Baht12,866 million to Baht22,955 million for the Project on 25 March 1997.

12. Second step tenders were called on 6 December 1996, and on the closing date of 20 January 1997, only one step two bid was submitted to PCD. Following technical evaluation of the bid, the financial proposal was opened on 11 April 1997 and, on 20 August 1997, a contract was signed between the PCD and the successful bidder for Baht22,949 million. It was denominated in foreign exchange ($134 million) and local currency (Baht19,506 million). The increased cost of the Project was to be met from Government budgetary resources. The contract, as signed, was for one consolidated treatment plant (525,000m3/day capacity) on the east bank in Klong Dan district, with a single marine outfall discharging the treated effluent some 3.3 km offshore. PCD had rejected the contractor's proposal for shoreline discharges, as they represented a substantial environmental risk.

13. As a development project that will bring about an overall improvement in the environment, it is classified as a Category B project by the ADB, and as such requires an IEE only. Government regulations, as set down by the Office of Environmental Policy and Planning (OEPP), do not require an EIA for centralized wastewater treatment plants. They do however, require an EIA for... "central waste treatment plants as defined by the Factory Act"... . Under the Factory Act, this explains that this refers to treatment plants for hazardous waste only. On this basis, the Government concluded that an EIA for the wastewater option under the Project was not required. The consultants however, did undertake a preliminary EIA for the selected option on the data available at that time, but... "recommended that the EIA is reviewed and updated as part of the detailed design phase for the Project, to take into account more specific Project design details and additional environmental data." The EIA was based on the feasibility level engineering design concept as existed at that time. Therefore, locations of actual land requirements could not be determined accurately. However, general locations on the west and east banks were shown in the documentation at the time. As required by the terms of reference for the turnkey contract, all Project proposals in the bids were to be supported with environmental considerations. The successful turnkey bidder submitted the environmental considerations with the precursor that... "the EIA guidelines outlined by the OEPP will be closely followed, and in areas where necessary, the guidelines will modified to suit the Project requirements." The environmental considerations supported the relocation of the treatment plant site and outfall at Klong Dan.

14. The basis of the turnkey style of project implementation is that designs are progressively developed from the feasibility study stage through to final design stage, in turn enabling a more progressive and comprehensive assessment of the environmental impacts, and the management strategies by which to mitigate or eliminate such impacts. The IEE assessments as part of the feasibility study provided a preliminary understanding of the environment vis-a-vis the Project, which was developed further when the preliminary EIA was undertaken for the preferred option. The environmental considerations submitted as part of the turnkey bidding process are approximately equivalent to the standard of EIA prepared for the preferred option. Development of comprehensive EIAs were commenced in sequence with the development of detailed designs, and draft EIA reports (for the collection system, river crossing, canal diversion at the treatment plant site, the treatment plant and marine outfall) are scheduled for submission by the end of July 2000.

15. To support the development of the EIAs, and as part of a more comprehensive and long-term effort, PCD initiated an environmental monitoring program in October 1998. Both the EIAs and the monitoring program include marine and coastal ecological studies, dynamic water quality modeling of the Gulf of Thailand, and water quality studies. In addition, PCD has commissioned an effluent re-use strategy study and will shortly commence a sludge management master plan study. .

16. To ensure the Project would meet expectations, an expert panel was convened in September 1998 to review the engineering designs. The panel, which comprised four world-class international experts in the field of wastewater engineering, gave valuable guidance to PCD, but the agenda for the panel workshop was essentially technical in nature, and did not involve any stakeholders other than the PCD. However, the recommendations resulted in marked improvements to all aspects of the technical design. With growing community concern about some aspects of the Project, a technical hearing was conducted in August 1999, with a panel of 22 Thai academics and Government professionals. The panel requested a second technical hearing. Consequently, such a hearing was held in November 1999, at which representatives of all Project stakeholders attended, including the Klong Dan community. The panel comprised 31 Thai academics and professionals, plus three international experts. It was far more comprehensive than the expert panel session, and was chaired by a person who was independent of the Project, Prof. Dr. Thongchai Panswasdi of the Chulalongkorn University. It is interesting that there is some difference of opinion on the outcome of the hearing amongst the various stakeholders and the chairman, and this needs to be addressed through communication with all stakeholders.

17. In April 1999, the community of Klong Dan started to raise some concerns about the location and viability of the proposed wastewater management system, and particularly the treatment plant and outfall. The community has become increasingly vocal, and has been joined by some NGOs in seeking more information about the Project. Their concerns have been expressed through the media, and quite recently at the ADB's Annual General Meeting in Chiang Mai. The community has written a number of letters to PCD, expressing concern about the Project, and on 31 May 2000 submitted a letter to the Prime Minister's Office voicing objections to the Project.

18. Public meetings took place between March and June 1999, but were not very effective, and culminated in a situation where PCD officials were restrained from leaving Klong Dan for some 8 hours. Following the technical hearing, a series of public hearings were scheduled to improve linkages and communication with the community, commencing in early 2000. The hearings have not yet taken place.

VI. Mission's Findings

A. Field Visit to Klong Dan

19. On 22 June 2000, the Mission visited Klong Dan community. The Mission joined community leader, Mr Chalao Thimthong, on a boat trip to the coastal mussel farms around Klong Dan, and later met with key community figures to listen to their concerns. The Mission wishes to record its appreciation to Mr. Apichat Thongyu, Chairman of the NGO Coordinating Committee for the Environment, for facilitating this visit. The Mission had the opportunity to spend several hours listening to the community figures, and discussing issues mostly on an informal basis. NGO and media representatives were present during the boat trip and the subsequent meeting. The Mission would also like to record how beneficial this visit was in developing a deeper understanding of the community's concerns.

20. Several issues were aired. Feelings and views vary to some extent within the community. The following is a general summary:

i. There was a request to the Mission for the Bank to stop the Project, and cancel the loan immediately. The Mission explained that, having signed a loan agreement with the Government, suspension of disbursements or cancellation of a loan would only be possible if it were found that there had been some serious contravention of the agreement, including Bank policy. The Mission further explained that the purpose of the Mission was to undertake a special review of the Project to assess whether the allegations of non-compliance with Bank policy had any concrete basis.

ii. The community maintain that they are having to accommodate the treatment and disposal of wastes from Samut Prakarn's industrial area some distance away, and yet they perceive that they will receive no benefit from the Project. In fact, they claim that the Project will have some negative impact, as result of a loss of production in the buffer zone area at the outfall.

iii. The community maintain that the Cabinet resolution approving the Project mentioned two plants and not one.

iv. The community produced documentation from the Fisheries Department, which raises questions about the integrity of the modeling studies carried out by PCD in the Gulf of Thailand.

v. One community figure demanded a comprehensive review of the Project, taking into account the community's views as well as those of the PCD. The Mission responded that this was the purpose of this visit.

21. With respect to iii and iv above, the Mission recommends that the PCD and the community share and discuss the various data, and reach an understanding or agreement on the situation, and if necessary, ask for a third opinion on the matter. The community thanked the Mission for visiting Klong Dan, and the opportunity for discussing their concerns on a "face-to-face" basis. The community also presented the Mission with:

i. a petition with over 2,000 signatures from two subdistricts (Klong Dan, Song Klong) and Klong Dan municipality requesting cancellation of the Project; and

ii. a copy of a letter they had sent to the Prime Minister on 31 May 2000 requesting a review of eight key issues regarding the Project.

22. The Mission agreed to take into account the community's concerns in its review, and to hand over the petition to the Bank. In summary, the Mission considered that there is a range of feelings amongst the community. Some want to stop the Project, and to put a stop to all ADB-funded projects in Thailand. Others recognized the need for cleaning up the environment of Samut Prakarn and the need for the Project, but did not agree with the location of the treatment plant and outfall. They argue that Klong Dan is a traditional fishing society, and is the only base for their local economy, and there is a genuine concern that the outfall will have an adverse impact on their local environment and their local economy. The community's concerns are heightened by the volume of misinformation being circulated about the Project.

B. Review of Key Issues

23. The responses provided in the Bank's letter to the NGO COD on 23 June 2000, have been reviewed and comments are presented below. In addition, comments are provided on some other issues raised during the Mission.

Issue - Did ADB and the Government follow ADB guidelines in preparing an EIA for the Project?

24. Yes ADB guidelines have been followed. See paras. 8, and 13-15 above.

Issue - Will environmental impacts affect the livelihoods of the Klong Dan residents?

25. This question needs to be examined in both a short and long-term context, and in a geographic context. The PCD expect that there will be a real improvement in the environmental conditions of the urbanized area of Samut Prakarn within the short to medium term. In the medium to long-term, the overall environmental condition of the coastal waters in the Samut Prakarn area will improve, by way of reduced levels of toxics and heavy metals being discharged into the coastal environment. This is what has been experienced in other parts of the world through environmental clean-up projects, and a good example is Port Philip Bay in Australia. For the Klong Dan residents, not being a part of the urbanized area, they will only experience the medium to long-term benefits associated with the improvement in the quality of the coastal waters. The buffer zone to be established at the outfall will be a negative impact for the community, and this should be recognized. The ability of the buffer zone to protect the surrounding coastal waters has been questioned by the Klong Dan community and the Fisheries Department. PCD will initiate a dialogue with the community and the Fisheries Department to discuss this issue, as well as undertake more comprehensive testing and modeling of the effluent discharge into the coastal waters. In addition, PCD is scheduled to undertake effluent reuse studies to reduce the discharge. The Ministry is also looking at other ways to provide short-term benefits for the Klong Dan community, such as the establishment of a research center for fish and mussel farming.

26. PCD has modeled several parameters in the development of the outfall design, including salinity, organic pollution, nitrates and others, and the results are now under consideration in finalizing the dimensions of the outfall. The impact of heavy metal deposition in the area of the outfall is still under detailed consideration. The Mission encouraged PCD to enlist the cooperation of the Fisheries Department in this respect, and also suggested that an acceptable third party, specializing in coastal ecological environments, be enlisted to provide a degree of comfort to all parties. A mission, including community leaders, is planned to a similar treatment plant in Chicago to provide stakeholders with a first-hand experience of what is planned.

27. The Mission advised PCD that the buffer zone in the coastal waters would require a resettlement plan under Bank policy. The term resettlement is a little confusing since the buffer zone will not require the relocation of any people. However, other issues will need to be addressed, and this will require a thorough social analysis and preparation of the Klong Dan community. The Mission and PCD agreed to consider ways in which this work would be carried out quickly, to avoid any further confusion.

Issue: Was the site for the treatment plant changed?

28. It is clear from the documentation that there was never any fixed location for the treatment plant(s), and that it was the responsibility of the turnkey contractor to locate and procure the land, before handing it over to the Government. See paras. 8-12, and para. 53-54 in the Bank's report and Recommendation to the President. PCD has a letter on file, dated 20 January 1998, from the elected head of the Tambon Administration Organization (TAO) of Klong Dan agreeing to the location of the treatment plant, but the community do not obviously agree. This highlights the inadequate social preparation of the community.

Issue: Were there irregularities in land acquisition?

25. See para. 9 above. The information regarding land acquisition was widely publicized throughout the area by the Government. The Government took responsibility for the initial prequalification of parcels of land for the Project, and this land prequalification information was given to the prequalified turnkey contract bidders. The successful bidder was given a 6-month period to acquire the title of the land and turn it over to the Government. This was accomplished by the successful turnkey contract bidder, with Klong Dan as the site. Bank financing was not used for land acquisition. Land acquisition was reviewed by the Lands Department, Budget Bureau, and Ministry of Finance officials. Before the land was transferred to the Government, a letter was signed by the elected head of the TAO for Klong Dan agreeing to the transfer of the land and its utilization for purposes of wastewater treatment. The Mission could find no evidence of irregularities in land acquisition.

Issue: There has been inadequate consultation with affected residents.

29. Following the final site for the treatment plant at Klong Dan, it has been recognized that the social preparation of the community has been inadequate. Provision is made in the turnkey contract for community liaison, and work has been carried out in this area - see Annex 3 for a complete list of all meetings, etc. However, it is clear that it has not been effective. In this respect, the Mission was pleased to note that PCD are in negotiations with the turnkey contractor on how to improve the community liaison aspects under the contract. The Mission noted that in the environmental considerations section of the turnkey bid, one of the positive impacts of the Project proposed by the turnkey contractor was local employment generated; this has not happened. Of more importance however, is the community awareness/participation component PCD will commence shortly. This is designed to open an maintain effective communication channels with the community. It will be staffed by specialists in community development.

30. At the request of the Klong Dan community, PCENR has started a process of bringing PCD and the community together to initiate a constructive dialogue. All parties agreed that ADB representation would be sought during key steps of the process on observer status. The Mission sees this as a very positive move, and has committed to keep listening to both parties during the process.

Issue: Is the treatment process design appropriate?

31. This issue has been debated at some length, and during a number of expert panel reviews. The consensus is that the approach adopted is the most cost-effective both in the short- and long-term. There has been some fine-tuning of the Project as a result of these technical panels, and the independent experts strongly confirm that the centralized approach and the technology being utilized is the most appropriate for the circumstances. A community concern is the possible generation of odor from the treatment system. The potential for odor problems has been minimized through design reconfiguration and minor modifications. A computer model to simulate odor dispersion has also been established to assist with optimizing the plant configuration and also to allay the concerns of the local residents.

Issue: Will industries connect into the system?

32. In 1998/99, PCD carried out a detailed analysis of the costs of centralized treatment compared to decentralized onsite industrial treatment, for a range of industries in Samut Prakarn. The study concluded that for medium to serious polluters in the food and textile industries, the unit cost of onsite treatment (Baht per cubic meter) was found to be 1.3-40.0 times greater than the total unit cost of using the centralized systems. This comparison took into account onsite treatment capital and recurring costs only. The cost savings associated with being able to utilize the treatment plant land for other beneficial use yields an even more favorable comparison. The incentive of cheaper treatment costs will be an attractive option at the time of assessing upgrade options. Surveys by PCD indicate that 75 percent of all factory treatment plants are more than seven years old.

Issue: The wastewater treatment plant is not designed to treat heavy metals and hazardous chemicals

33. The treatment plant facilities include anaerobic pretreatment ponds which are designed to act as shock-absorbers on the system by intercepting inorganic wastes such as heavy metals. Similar plants in other parts of the world remove up to 97 percent of trace metals. A study conducted on anaerobic ponds in Melbourne Australia, which has a treatment plant very similar to that of Samut Prakarn, found that removal rates of 47 to 92 percent of heavy metals, depending on the parameter, are achieved in such ponds. PCD informed that based on a hazardous operations study of the collection and treatment system, measures will be put in place to intercept dangerous substances, such as combustibles, well before they have a chance to reach the biological process units.

34. PCD informed that from its present estimates of heavy metal loads that will be collected by the central collection systems vary from as little as about 1 kg per day for mercury to about 48 kg per day for chromium. These amounts are currently being discharged into the waterways and coastal waters of Samut Prakarn. Using the findings of the Australian study, 70 percent of the influent chromium can be removed in the pretreatment pond. Taking a conservative estimate of 70 percent overall removal, this means that of the 47 kg that will enter the plant daily, 33 kg per day will be removed, thus discharging to the sea about 15 kg per day. This is equivalent to a concentration of 0.032 mg/L at full plant commissioning flow, which is well below the allowable discharge limit of 1.0 mg/L under the current Thai standards.

Issue: The project threatens the natural ecosystem, coastal fisheries and local economy in Klong Dan

35. Overall the Project will have a beneficial impact on the ecosystem of the province, particularly on the canals and the coastal waters of Samut Prakarn. However, it is recognized that in the vicinity of the outfall there will be a mixing zone in which freshwater from the treatment plant will disperse and assimilate into the surrounding seawater. The mixing zone will not be suitable for farming of mussels. An exclusion zone will need to be established around the diffuser of the outfall. Significant reduction in total pollutant and nutrient loads is expected in the northeast corner of the Upper Gulf of Thailand. For example, some 72,000 tons/year of BOD will be removed from waters entering the sea, thus providing substantial ecosystem benefits due to regional improvements to marine water quality. However, a more concerning observation is that the sediments off the coast of Klong Dan contain high levels of mercury and copper, and even lead levels are elevated although still below international guidelines. Finally, aerial photographs of the treatment plant site and surrounds going back to 1967 indicate that the mangrove forests in the subject area have been devastated by shrimp farming activities. The mangrove cover at the treatment plant site prior to purchase of the site was 75 ha (or 25 percent of the area). After completion of the facilities, the mangrove area will be increased to about 120 ha (40 percent of the site).

VII. Conclusions and Recommendations

36. In conclusion, the Mission's findings on the key issues are as follows:

i. Bank policy has been followed in respect of environmental requirements. The Mission wishes to also record that the EIAs almost nearing completion are comprehensive and to a high standard.

ii. On the issue of whether there has been a change in the siting of the treatment plant since Cabinet and ADB, it is clear that there was no fixed site for the treatment plant, and that the actual location was to be identified during turnkey bidding.

iii. Klong Dan residents, not being a part of the urbanized area, will not experience short to medium-term benefits under the Project. The Ministry is proposing to look at ways to provide short-term benefits for the Klong Dan community, such as a community development fund or the establishment of a research center for fish and mussel farming. The community will experience medium to long-term benefits associated with the improvement in the quality of the coastal waters.

iv. Community consultation. Following the decision to adopt a turnkey contract approach, and to put all responsibility on the turnkey contractor for land acquisition, there has been inadequate consultation and social preparation of the Klong Dan community. It can be concluded that the means of communication has been ineffective, and has engendered a sense of anger within the Klong Dan community. PCD will implement a community awareness and consultation program.

v. Overall the Project will have a beneficial impact on the ecosystem of the province, particularly on the canals and the coastal waters of Samut Prakarn. However, it is recognized that in the vicinity of the outfall there will be a mixing zone in which freshwater from the treatment plant will disperse and assimilate into the surrounding seawater. The mixing zone will not be suitable for farming of mussels. An exclusion zone will need to be established around the diffuser of the outfall. A resettlement Plan (or land acquisition plan) will need to be prepared for the exclusion zone.

37. The Mission believes that there is a renewed commitment between the PCD and the community to engage in a constructive dialogue to resolve any differences, and work toward a mutually acceptable set of solutions.

VIII. Recommendations

i. Establish a website at PCD to disseminate information on the Project.

ii. Consider providing some additional benefit to the Klong Dan community through employment generation on the Project.

iii. Following discussions with both the community and the PCD, ADB to continue to have a presence on observer status with respect to community-PCD communications over the next few months.

iv. ADB mission to return before the end of July 2000 to discuss the issues raised in the Aide Memoire with the PCD and the community.

IX. Acknowledgment

38. The Mission wishes to thank PCD staff and the community of Klong Dan for their cooperation and assistance during the review, which have greatly contributed to the completion of the Mission.

Bangkok, 28 June 2000

GRAHAM S. JACKSON
Mission Leader/Senior Project Engineer
Asian Development Bank