Azerbaijan : Water Supply and Sanitation Investment Program - Tranche 3

Water and other urban infrastructure and services / Urban sewerage - Urban water supply

Project 3 under the Investment Program is divided into two main subprojects benefitting the population of 50,573. The first subproject will improve the water supply and sewerage network in Aghjabedi town, whereas the second subproject will improve the same in peri-urban towns of Nakhchivan, namely , namely Qaracuq, Qarahanbeyli, Bulgan, Haciniyyet and Tumbul, located south and southwest of Nakhchivan city.

The main objectives of the subprojects are to (i) meet the demand for water by increasing the proposed volume at the consumer end to 147 liters per capita per day (lpcd) for domestic consumption and 29.4 lpcd for non-domestic consumption; (ii) increase the abstraction of water from the existing and new sources to meet water demand; (iii) improved water distribution network to provide between 90 to 100% of the households with safe and reliable water supply as compared to 32% in 2011; (iv) reduction of non-revenue water (NRW) to 10% of production through district/bulk metering; hydraulic zoning; leak detection and consumer metering.

Under the Aghjabedi subproject, the investment in infrastructure would include improvement of the water intake facilities, water supply network, sewerage system as well as the administrative infrastructure. Specific activities will include: (i) rehabilitation of two existing bore wells and construction of 8 new bore wells; (ii) rehabilitation of the two existing reservoirs and construction of four new reservoirs; (iii) construction of sewage collecting system, pump stations, and effluent discharge pipelines, (iv) wastewater treatment plant and associated workshop office buildings. Under the Nakhchivan subproject, the construction of only water distribution and sewage collection networks is envisaged for peri-urban towns, as the water treatment plant and sewage treatment plant constructed under Project 1 and Project 2 respectively would also cater to the peri-urban towns of Nakhchivan. Overall, Project 3 includes construction of 266 km of water supply network, 8,000 cubic meters of storage reservoirs, 245 km of sewer lines, and a sewage treatment plant of 20 MLD capacity in Aghjabedi.

The quality, coverage and reliability of water supply and sanitation infrastructure and services have not kept pace with the rapid growth of the economy and population of secondary towns in Azerbaijan. The deficiencies are adding to household costs and diminishing the quality of life of all the towns' population. Recognizing the need to overcome the current problems and constraints, the government's State Program on Poverty Reduction and Sustainable Development (SPPRS) for 2008-2015 committed to improve access to basic services and targets improved water supply and sanitation (WSS) coverage and service quality by 2015. This includes 100% coverage with 24-hour water supply in the capital city Baku and 80-85% coverage in Azerbaijan's secondary towns and villages. Sustainable environmental management, good governance and institutional effectiveness are also key strategic goals of the SPPRS.

Delivering improved urban WSS services is a key priority of the government, as it is essential to improving the quality of life, attracting investment, and raising productivity and competitiveness. Recognizing the need to overcome the current problems and constraints, the government''s State Program on Poverty Reduction and Sustainable Development (State Program) for 2008 -2015 commits to improving access to basic services and targets improved WSS coverage and service quality by 2015. This includes 100% coverage with 24-hour water supply in the capital city Baku and 80- 85% coverage in Azerbaijan''s secondary towns and villages. Sustainable environmental management, good governance and institutional effectiveness are also key strategic goals of the State Program.

A: WSS Infrastructure Rehabilitated and Improved

Water supply and sewerage system efficiency improved through rehabilitation and replacement, and coverage expanded

B. Institutional Effectiveness

Capacity developed for better system planning, operations and maintenance

Target met. Sex-disaggregated HR database was maintained by Azersu and SAWMC.

To be assessed at Tranche closure in May 2018

Target met.

Not met.

Target met. Operational documents have been developed.

The wastewater treatment plant will no longer be financed from ADB loan, but from the government funds.

Completed, target achieved.

Target indicator was met.

Completed, target achieved.

Completed, target achieved.

AZERSU and SAWMC endorsed the updated Environmental Assessment and Review Framework (EARF) for the Investment Program in November 2011. The environmental assessments conducted for Project 3 comply with the updated framework, which is being posted on ADB website on 21 August 2013. Project 3 is classified B based on the IEEs prepared for each of the two subprojects, as it will not have significant irreversible environmental impacts during or after construction. The contractors are required to refine and implement the environmental management plan prepared in the IEEs, which will also form an integral part of construction contracts.

Two civil works contracts were added to Tranche 3: (i) construction of water supply and sanitation networks in Shakarabad in Nakhchivan and (ii) construction of sewerage collectors in Agdash town. The IEE for Shakarabad was finalized by SAWMC in October 2017 where it was identified that construction will not have major adverse environmental impacts. The IEE for Agdash collectors was finalized by Azersu in September 2017 and it was assessed that the proposed subproject is unlikely to cause any adverse environmental impacts.

AZERSU and SAWMC endorsed the updated Land Acquisition and Resettlement Framework (LARF) for the Investment Program in November 2011. Project 3 includes construction of water supply and sewerage network along existing road network and within the existing right of way. The land for boreholes, water intake, reservoirs and associated facilities in Aghjabedi town is owned by SuKanals and similarly land for the sewage pumping station in Nakhchivan is owned by the government. There is only 3.5 hectare privately land being acquired for construction of sewage treatment plant in Aghjabedi town. A land acquisition and resettlement plan (LARP) was prepared for the project in consultation with the displaced persons and measures to deal with temporary impacts during construction in all subprojects. The LARP was endorsed by AZERSU on 25 June 2013 and is posted on ADB website on 21 August 2013. Consequently, Project 3 is classified B. Any unanticipated impacts will be mitigated, based on the provisions of the LARF. AZERSU, with support from its IPMC, has sufficient institutional capacity for supervising and monitoring the LARP.

Following the addition of civil works in Shakarabad and Agdash as mentioned above, the Social Safeguards Due Diligence Report (DDR) for Shakarabad was finalized by SAWMC in August 2017 and the assessment showed that the subproject will have no negative social impacts associated with land acquisition and involuntary resettlement as per the Land Acquisition and Resettlement Framework (2009) for this program. The DDR for Agdash collectors was finalized by Azersu in September 2017 and confirmed that the subproject has no negative social impacts associated with involuntary resettlement.

The main vehicle for civil society participation in the project is through mobilization of the Town Water User Associations. (TWUAs)

The project will establish links between the two executing agencies, TWUAs, and local Non-Governmental Organizations to ensure community feedback provided by women will be delivered to EAs for improved services.

A public outreach program to create local awareness on environmental and financial sustainability of the services and to keep the public informed of the project implementation schedule will also be conducted in each project area, with relevant information, education and communication (IEC). This activity is outlined in the project Gender Action Plan.

All procurement of goods and works will be undertaken in accordance with ADB's Procurement Guidelines. Tranche 3 loan includes: (i) two international competitive biddings (ICBs) for procurement of civil works for water supply and sewerage network in Aghjabedi and peri-urban towns in Nakhchivan; (ii) one ICB for procurement of civil works for sewage treatment plant in Aghjabedi.

Bidders eligibility will be determined in accordance with ADB's Procurement Guidelines (March 2013, as amended from time to time). Accordingly, no bidder or potential bidder shall be declared ineligible for ADB financed contracts for any reason other than those set out in ADB's Procurement Guidelines. For goods or services funded by loans from ADB's Special Fund resources, payments are limited to goods produced in, and services supplied by, developed member countries that have contributed to such resources and all developing member countries.