Environmental Monitoring Report...In terms of ecologic safety level “B” category has given to 116–190 km road section of A373 highway. This environmental monitoring report for

Environmental Monitoring Report Bi-Annual Report July to December 2015 Loan 2772-UZB

Uzbekistan: Second Central Asia Regional

Economic Cooperation Corridor 2 Road Investment

Program–Tranche 1

Prepared by the Program Management Unit under the Republican Road Fund, Ministry of

Finance of the Republic of Uzbekistan for the Asian Development Bank.

This environmental monitoring 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 area 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 area.

TABLE OF CONTENTS

ABBREVIATIONS 1

PART I – INTRODUCTION 2

1.1 Construction Activities and Project Progress during the Previous 6 Months 2

1.2 Loan 2772 – Description 2

1.3 Goals and Scope 3

1.4 Methodology 3

1.5 Project Status 4

1.6 Institutional Organization of the Project 5

1.7 Recent Changes in National Legislation 7

PART 2 – ENVIRONMENTAL MONITORING 8

PART 3 – ENVIRONMENTAL MANAGEMENT 9

3.1 The Environmental Management System (EMS), Site-Specific Environmental Management Plan And Work Plans

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3.2 Site Inspections and Audits 11

3.3 Non-Compliance Notices 11

3.4 Corrective Action Plan 17

3.5 Consultations and Complaints 18

PART IV – CONCLUSIONS AND ACTION PLAN FOR THE NEXT PERIOD 20

4.1 Conclusions 20

4.2 Recommendations 21

4.3 Action Plan for the Next Period 21

PART V – APPENDIXES 23

Bi-Annual Environmental Monitoring Report

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ABBREVIATIONS

ADB Asian Development Bank CAREC Central Asia Regional Economic Cooperation EMP Environmental Management Plan EMoP EMiP

Environmental Monitoring Plan Environmental Mitigation Plan

EAP Environmental Action Plan IEE Initial Environmental Examination Glavgosecoexpertiza Environmental Assessment Department within Goskompriroda, operating

at the central and province levels GOST Set of technical standards maintained by the Euro-Asian Council for

Standardization, Metrology and Certification (EASC) EA Executing Agency MFF Multi-tranche Financing Facility PIEA Preliminary Environmental Assessment, Screening or Terms of

Reference Document prepared as a 1st step of the Uzbek environmental assessment process

IEE Initial Environmental Examination PMU Program Management Unit RoW Right-of-Way RRF Republican Road Fund SCGMR State Committee on Geology and Mineral Resources SNPC State Nature Protection Committee OblComPriroda Region level branch of State Nature Protection Committee SNIP Any one of hundreds of Uzbekistan’s legal standards and rule, referred to

as KMK (Construction Norms and Rules) in Uzbek SP Sub-project or section package (road sections as packaged for the MFF) UZAVTOYUL Uzbekistan’s Agency for Road Maintenance and Operation PCCP Portland cement concrete pavement LHS Left Hand Side RHS Right Hand Side

http://en.wikipedia.org/wiki/Standardization


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PART I – INTRODUCTION

1.1 Construction Activities and Project Progress during the Previous 6 Months

During the previous reporting period significant progress on the project site has not been observed, since operations were hindered by contractor’s mounting debts and payment failure. The culmination point was a meeting at the Kamchik pass in partnership with ADB mission in June 2015, when parties decide upon whether to allow the Corsan company to continue project development, or not. Decision was positive. However, financial problems have persisted. Thereby, it was impossible to buy raw materials, fuel, to pay workers’ labor. As a result, the progress in 2015 was twice lower than in 2014. In terms of percentage, by December 31, 2015 about 50% of the total volume of the planned work was carried out. However, this figure may be challenged due to results of technical expertise, when 13 sites performed directly by Corsan considered as sub-standard. They are covered with deep cracks, whose treatment requires significant investment.

1.2 Loan 2772 Description

The Government of Uzbekistan has been provided a loan of Asian Development Bank to improve the quality of main roads and road infrastructure, enhancement the efficiency of international road corridors across the country. The overall objective of the project is to improve 58 km of А-373 highway (116–190 km., with exception of few segments). The highway is the main route between Fergana Valley and other regions of the country, serving as important international corridor between Uzbekistan, Kyrgyz Republic, and, in the future – connecting CIS roads with People's Republic of China. The loan agreement was signed 01.12.2011. It was designed under multi financial framework (MFF), which includes 3 tranches. In terms of ecologic safety level “B” category has given to 116–190 km road section of A373 highway. This environmental monitoring report for loan 2772 is submitted in February 2016 to cover the period of implementation July 2015 – December 2015. Location of the project to be constructed is highlighted in the map 1 below:


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MAP 1: Project Site Map

1.3 Goals and Scope

The report provides information about progress of the implementation of Environmental Management Plan (EMP), positive moments and the hardships during the implementation process. It also assesses EMP for some improvements and development of environmental management plan of the projects. The goal of this report is to comply with environmental security requirements of the Republic of Uzbekistan, ADB’s Safeguards Policy Statement (SPS 2009) as well as to fulfill the loan covenants as described in the loan and project agreement, signed by the Government and ADB in 01.12.2011. 1.4 Methodology

The report was based on findings from the field visits, monthly progress reports submitted by contractor (if submitted), from notes of engineer-ecologist, local population, local specialists from regional committee OblComPripoda, information and discussions with PMU specialists, and other actors.


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1.4.1 Methods Used

The approaches for preparing this report include: Data collection - the process of gathering and measuring information on variables

in the established systematic fashion that enables one to evaluate outcomes. Content analysis of project documentation, the IEE, contract and cost sheet,

reviewed using the mentioned method. Descriptive method, based on visual monitoring of the object and description of

current ecological condition; Critical analysis, which is subjective writing as it expresses evaluation of situation

and concrete opinion. Comparative analysis, based on comparison of common features and/or similar,

although unrelated events. 1.5 Project Status

Reconstructed road section of А373 highway within the framework of Project 2772 is 58 km long. It runs through Angren district of Tashkent region up to Pap district of Namangan region, between 116 and 190 km. Contracting agreement was awarded to consortium of Corsan - Corviam Construction S.A. (Spain) and JSC Elektrtarmoqqurilish (Uzbekistan) in September 2012. Sambo Engineering Co., Ltd. was chosen as construction Engineer in January 2013. Works are being done on A373 Tashkent-Osh highway between 116 km (first checkpoint after Angren city) and 190 km (second checkpoint right on the border of Namangan region), except sections 123–136 km., and 173–176 km, which executed by national Road Fund, minus also two tunnels: Kamchik tunnel & Rezak tunnel, which had improved prior to the current project. Therefore, the total stretch of highway works is 58 km, with mountain part of 1500 m above the sea level. Project includes reconstruction of existing 4-lane road by substitution of existing pavement for concrete pavement; and asphalt-concrete pavement for concrete-cement pavement. It also includes protection of slopes, embankments, third lane of some sections, improvement of drainage and equipment of the road. The loan was effective since 13.01.2012, the project completion was planned 30.06 of 2014. Under the initial agreement, the entire scope of work should have been completed by 21 of June 2014. At current stage it was extended by 30.06 2016 with possibility for further prolongation. However, by December 31, 2015 only one side of the road with length of 60 km. have been covered with cement concrete road pavement, from the envisaged 58 km, which is about 50% of the total project. No further progress done yet. October 7, 2015 the entire team of Corsan left the facility, and the host country without any verbal or written warning. October 9, the Road Fund & PMU received letter about initiation of


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arbitral proceedings in the International Chamber of Commerce (ICC) in Paris by Corsan-Corviam. The project cycle was abandoned in October – in a period favorable for both: work as well as the implementation of environmental protection measures. At that, Corsan-Corviam team did not bother to assign specialists, responsible for environmental safety at the level of sub-contractors, demonstrating disregard of compliance with safeguard policy. 1.6 Institutional Organization of the Project

Environmental management organization is shown in Figure 1.

Figure 1: Structure Diagram of the Environmental Management Organization

RRF

MFF 2 Project 1

Engineer's

Environmental

Specialist

Contractor's

Environmental

Specialist

Sub-Contractor's

Environmental

Specialist

PMU

PMU

Environmental

Consultant

ADB


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1.6.1 Current Arrangement of Professional Staff in Safeguard Team

Environmental Expert of PMU

The environmental expert at PMU level was hired for undertaking the following responsibilities:

To advise the executing agency (EA) and assist project management unit (PMU) and on implementation and monitoring of environment protection actions;

Manage and coordinate the preparation, updating, monitoring and implementation the IEE/EIA (Environmental Impact Assessment) as required by the FFA and loan agreement;

Set up internal monitoring system on the project’s environmental issues; Management and development information of environmental issues of the

project; Conduct internal and external coordination with relevant parties (state

institutions, community, small business and civil society on environmental issues; Provide advise/recommendation to the PMU on environmental problems and/or

requirements; Provide independent monitoring on the constructors’ compliance to

environmental management plan; Prepare and submit environmental monitoring/compliance reports as required by

the FFA and loan agreement; Engage with relevant civil society organizations interested in the project

implementation. The Environmental expert of the PMU has undertaken activity according to the mentioned above responsibilities, communicating with ecologist in the field, submitting reports and giving critical advices. Environmental Engineer

Sambo’s environmental consultant Ulugbek Bozorov was hired in May 2013 to undertake following activities:

supervision of environmental activity indicated at the EMP; periodical environmental monitoring on the construction site in collaboration with

ecology-engineer; reviewing and updating EAP (Environmental Action Plan) prepared by Contractor

upon results of the site visit; preparation of regular environmental reports and submission to PMU.

His contract was completed in March 2014 when Mr. Bozorov resigned from the position. Since May 2013, during 10 months he has conducted a field visit with frequency: ones at every 2 months for a short period of a week, sometimes - 10 days. The exception was only at winter time, when work on the site stopped due to the weather conditions. His monthly reports were sufficiently informative and visual.

Absence of Engineer-ecologist for more than a year caused problem in implementation of EAP and EMMP, ecological monitoring & timely preparation of reports.


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The engineer made several attempts to invite environmental specialists from Tashkent. Position was announced, even interviews were organized. However, when it comes to the execution of duties, none of the selected specialists got ready to leave the capital city for the Kamchik pass. It was recommended to Engineer to search such a specialist not in Tashkent, but rather in Kokand or in Namangan, from where it might be not so difficult to get to the project site. Engineer has accepted these arguments, but asked to wait until situation would be released from uncertainty, addressed the issue of the application (or - non-application) of penalties to Contractor. Absence of ecologist at the initial & mid-stage of work cause problems in management and monitoring of environmental safety. Since May 2015 this position occupied by Askar Abduraupov. With his appointment situation has been a changed for better, and the most significant result of his work was the restoration of Kushminor aryk (ditch). He was actively connected to the correspondence between the engineer and the contractor, and was able to convince Corsan that the water entering the mountain village was not illegal. Ecologist of the Contractor

Initially, Ms. Carlotta Gil Dias combined duties of ecologist with the other two positions, for example, she was also responsible for quality control of the road cover. In mid-2014 she was replaced by Mr. Gustavo Marmol, responsible for following activities:

to monitor environmental security of the site and the adjacent territories on a daily basis;

to provide data on implementation of safeguard measures, indicated in EAP; to develop further action Plan, based on SSEMP prepared before

commencement of construction activities; to prepare monthly environmental report to submit to Contractor, Engineer and to

EA. In October 2014 Mr. Gustavo Marmol was hired as an environmental specialist by the Contractor. With low experience in environmental field and zero knowledge of Uzbek, Russian and English languages, during a year of his presence at Kamchik as contractor’s ecologist, he has never presented environmental monitoring plan or updated environmental management action plan. No changes observed on the project site during his stay in Uzbekistan. Corsan’s monthly reports had the same formal character, consisted of few repeated sentences only and plenty of photos. Laboratory measurements of the state of air and water were for certain time available, but they have been ordered and produced in situation, when the road reconstruction work was almost not carried out, not in proper place, i.e. quite remote from the active sites, from cement plants, etc., also without seal of the head of that institution, which made test papers questionable. In autumn 2015 Mr. Gustavo Marmol left the camp along with other specialists. Until October 7, 2015, when Corsan left Uzbekistan, company continued disregard the environmental culture in its policy abroad. 1.7 Recent Changes in National Legislation

The following changes in national legislative framework took place related to government bodies, non-governmental organizations and citizens:


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In October 2015 the Cabinet of Ministers approved the "Standard regulation for implementation of public environmental control", which stipulates the procedure for the implementation of public environmental control, as well as the legal bases of activity of subjects of public environmental control, among which are mentioned: self- NATIONAL LOWS & REGULATIONS.

In paragraph 3 of the Regulation states: "The public environmental monitoring is carried out in accordance with the Constitution of the Republic of Uzbekistan and the laws of the Republic of Uzbekistan "On Environmental Protection", "On Health Protection" and "On Environmental Control".

New certificate form for public inspectors on environmental control was created, which may be issued by citizens' self-governmental bodies (ex. Mahalla).

PART 2 – ENVIRONMENTAL MONITORING

Analyzing the course of events of the reporting period, it is understandable that during the reporting period Corsan was in process of demobilization. No any measurement provided for air, water and vibration condition. Such data stopped immediately after ecologists pointed out that those measurements were taken not in the places where the operations are currently being done. Moreover, in response to our verbal request, Corsan could not provide any invoice for such laboratory tests, nor contract with any local institution to hold the measurements. Main sub-contractor Alliance Capital provided test only for July 2015. According to test results AC-SES-15-156 performed laboratory measurements and reported the following: sampling and measurements of noise and vibration level at workplace near the hydraulic hammers, located at km 180 and km 183 of road Tashkent-Osh and the crushing plant located at 187 km level of dust at workplace of plant at km 175 and the crushing plant km 187 confirmed that all measurements are valid to standards of Uzbek republic according to the SanKM 0120-01 "Permissible noise levels at workplaces", SanKM 0122-01 "Sanitary standards of common and local vibration at workplaces", and SanKM 0294-11 "Maximum permissible concentrations (MPC) of harmful substances in the air of working area". Dosimetric measurements made along the road Tashkent-Osh (km 181 and 185) of the gamma background and spectrometry laboratory tests of sampled rocks meet the requirements of sanitary rules and measurements 0193-06. Full chemical analysis of water from the river Rezak (samples from km 175 and 186) correspond to the permitted norms.


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PART 3 – ENVIRONMENTAL MANAGEMENT

3.1 The Environmental Management System (EMS), Site-Specific Environmental Management Plan and Work Plans

3.1.1 Environmental Management System at Current Stage

As mentioned above, the contract on construction work was awarded to consortium formed by Corsan and ETQ in September 2012. Mobilization of resources/mechanisms, setting up office/camping have been conducted through April – May 2013. Starting from May 2013 till autumn 2015 the company was constantly behind the main chart, completely ignoring safeguard policy in its activity. October 7, 2015, Corsan left Uzbekistan, applying for international arbitration. The main reason why Corsan caused such a serious environmental damage, having mastered less than 40% of the planned volume of work is disregard to the environmental dimension of activity, combined with belief that non-compliance to environmental regulations, which cannot be deviated in Europe, permissible in the emerging economies. History of Conflict and the Arbitrage

October 9, 2015 the Republican Road Fund (RRF) under the Ministry of Finance of the Republic of Uzbekistan received a notification from Secretariat of the International Chamber of Commerce (ICC) in Paris informing that as long as in April 1, 2015 Consortium «Corsan Corviam Construccion SA» (Spain), which is the contractor for the construction of the highway a-373 "Tashkent-Osh" in the section 116–190 km, through their representative – the company «Pinsent Masons LLP» (United Kingdom) – appealed to the ICC with a claim for damages caused by National Road Fund in the amount of $ 70 million USD. November 5, 2015 RRF has sent a request to the ICC Secretariat to extend the period of Contractor's claim and possible counterclaim withdrawal. The request was satisfied with the Secretariat of November in 19, 2015. December 5, 2015 RRF sent a counterclaim and a second request to the Secretariat to extend the period of withdrawal of Contractor’s statement claim until 16 January, 2016. December 11, 2015 that request was also satisfied by Secretariat of the International Chamber of Commerce. December 23, 2015 RRF received a notification from Secretariat of ICC on decision to appoint of three arbitrators to the trial. The same day, December 23, 2015 the company «Pinsent Masons LLP» (United Kingdom), refers to the Secretariat with request for extension submission of the co-arbitrator candidate until January 18, 2016. Violation of Financial Statement

Ignorance of safeguard policy led to breach of the contract, in particular – to the misuse of funds, when from 200.000 dollars, intended for the environmental protection measures, 140.000 was addressed in a wrong way.


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The circumstances were as follows: during 2013 and 2014 the Contractor submitted, and the Engineer signed few checks, addressed to environmental protection measures in total amount of 140K USD. Among those, for example, check №100 dated from 08.23.2013. Article 23 of the contractor’s invoice, named "environmental protection", clime 53,333,33 with decoding: "for re-vegetation". Engineer, confirming the required amount towards environmental protection, changes type of activity, stating that 20% (from that quantum) will go to the approval of the environmental management plan, & 60% – to the delivery of monthly reports. Where would go the remaining 20% of the requested amount was not even specified. If the invoice of Contractor was about re-vegetation, that is—activity with materialized positive result for the environment, the checks signed by Engineer diverted large part of this sum to contractor’s monitoring reports, which – in case if submitted—consisted from several, constantly repeated phrases. At the same time, the cost of photographs and video of the object were indicated at separate article: 5 400—for photos, & 2 000—for videos. The remaining 86,666,67 of this sum were requested without any explanation in few steps, and spent for unknown purposes as “ineligible expenses”. These transformations are just evidence of violation of Article 15.6 of the Contract, where parties incur obligation to use funds strictly according to their purpose. In that case: on the environmental measures. The incident also occurred due to a common practice, when safeguard expert of the Executive agency is not able to control and positively influence at usage of environmental budget. S/he does not have access to information about critical budget movements. At best, the expert may be informed about saddest state of affairs ex post facto. The incident shows that changes should be introduced in the procedure itself, in such a way that without authorization and sign of safeguard expert, no movement of funds allocated to the protective measures may occur.

3.1.2 Site Specific Environmental Management Plan (SSEMP)

SSEMPs were developed by PMU in collaboration with sub-contractor (Alliance Capital). They were approved by Engineer in 2014 with reference to the IEE, Environmental Laws and Norms of the Republic of Uzbekistan. Laboratories for environmental monitoring & sanitarian-epidemiological station for control of water and air quality, which formed a base for monitoring of environmental safety, finally identified. SSEMP defined place, time, parameters and responsibility of environmental monitoring. Sub-clauses of SSEMPs also included Contractor’s schedule of submitting reports to Engineer and Employer (EA). The field works on monitoring of environmental management plan for this period was carried out in project areas (road A372 on 116–190 km with exclusion of two tunnels+ 108–116 km) as follows:

Section of the road and the shoulders (roadsides) – the working places;


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Concrete batch plants, located at 109 km, 152 km. and 172 km. (the biggest plant situated at 109 km);

Road side quarries; Contractor’s site camp; Engineer’s site camp Sub-contractors site camps;

Other Environmental Management Plans

No other plan has been prepared, as it was requested in IEE: neither Waste Management Plan, nor Health & Safety Plan. This situation reflects the company's behavior towards waste management, as well as in safety and health. 3.2 Site Inspections and Audits

3.2.1 Schedule of Site Inspections by PMU Ecologist

PMU specialist conducted site visits on monthly basis, sometimes, one in two months. Environmental engineer use to spend up to 10 working days on the site every single month with exception of winter break at the construction work. The schedule of conducted site inspections and audits are listed below: 1. July 7 – in Kamchik pass: to negotiate restoration of Kushminor pipeline with the

contractor & the engineer. 2. July 14 – Kamchik: to start recovery of Kushminor pipeline as contractor bought 1 100

meters of pipes and deliver those to Mahalla. Verification of conformity with technical requirements, sufficiency of pipes, checking the proper pipe route.

3. August 12 – Kamchik: the conversation with the residents of the village on quality of water from the new aqueduct. Visit to school 44, where the students were given exemplary seeds for sowing, control of planting & new shoots.

4. October 2 – Kamchik: negotiations with Angel Martinez – the representative of Corsan company – regarding the continuing practice of dumping into the river bed of stripped asphalt and the damaged jersey (road overlap)

5. November 13 – Kamchik: organization of training workshops on protective measures among the affected population, concentrated on water quality & methods of water domestic purification.

During site inspections Corsan received environmental warning notes/non-compliance notices & memos regularly (see Annex 2). 37 written non-compliance notices concerning ecologic safety have been issued totally by engineer, most of them are described below in chapter 3.3. 3.3 Non-Compliance Notices

The contractor, in most cases, did not respond to comments of EA and the Engineer. Mr. Marmol – ecologist of contractor for the reported period - never spoke & never entered into a dialogue. Mr. Angel Martinez used to lecture about perfect ecological conditions of Europe in response to instructions and comments about the poor state of the object.


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Excerpts from Corsan letters addressed to the engineer, dated 8.07.2015 and 29.08.2015 may serve as an example of written non-compliances, neglect of local residents, as well as false interpretation of situation and the local legislation (see Annex 2). Table 2 below reflects other non-compliances revealed during the reporting period.

Table 2: Other Non-compliances

Changes of riverbeds of Akhangaran-sai, Rezak-sai and Chodak-sai due to development of careers inside of dry course

Crushing – and-sorting aggregates started to work without positive conclusion||permission of the State environmental expertise.

Features of Corsan-Corviam company's commitment relates to the extraction of gravel directly from the floodplains, as stones there are not subjected to silting (oozing). Those stones are easier to split up, there is no need to wash and dry them prior to processing. Nevertheless, contaminated floodplains of the rivers significantly worsen the quality of water that used by local population for drinking

Restoration of hill top at185 km of A 373

Laying 4 culverts under A373, which were not envisaged in the project

Status of SSEMP along the Road side

The following works were carried out: cold milling of existing asphalt concrete pavement, filling of the roadbed for the new pavement and PCCP placement operations on RHS of the road.

Type of Impact Areas

Affected Instructions Instruction Issue Date Remarks

1. Loss of virgin areas.

Shoulder Prevention of filling the shoulders more than 20–25 sm.

March, April, May, June 2013-spring 2014 (repeated)

Regulations are generally being met

2. Pollution with wastes of construction

Shoulder – Contamination timely removal for recycling;

– Prevention of spills and leakage of petroleum products in areas of temporary parking of road construction equipment;

June 2013, April 2014

In general compliance with conditions, excluding some places indicated further in report

3. Air pollution Dust emission during transportation

In accordance with Environmental management plan

Generally in compliance excluding late autumn and early spring, some winter days, when it is dusty in daytime, but road humidity may cause the formation of ice due to sharp difference daytime, evening and night temperatures


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4. Contaminating-of ground, damage to vegetation and fauna

Shoulders In accordance with Environmental management plan

- – Uprooting performed under supervision of regional committee for the nature conservation.

– Recovery of herbaceous covering along the shoulder on LHS is noted.

Status of SSEMP for Concrete Mini Plants

Three plants located at 109 km, 152 km and 175 km. Monitoring of these batching plants may be summarized as follows:

– Batching plant No.1 (109 km): industrial area of the plant had enlarged in order to accommodate larger sand washing site and the larger raw materials storage with the purposes to increase production of the batch. At the same time, there is no sump for obsolete used water, efficient and proportional in its volume.

– Batching plant No.2 (152 km.) was erected in very sensitive area, in close proximity to the river. Only the fact that the plant was not used actively during reporting period, staying idle most of the time, can justify its poor positioning. That plant should be dismantled first of all.

– Batching plant No.3 (175 km) is erected in seismic zone, on the top of mountainous terrain, with no sufficient anchorage reinforcement. This plant almost directly adjacent to the river, creating thus additional risks of water contamination. The plant erected on placer of stony waste, which was produced by explosions. The upper sole of that place was covered with concrete pad. From there wastewater, which contains harmful chemicals necessary for the production of concrete, flow directly into the Kamchik-sai river, which, in turn, flows into the Ahargaran-sai. From that river it flows directly into the Ahargaran reservoir, which supply water to households, hospitals & social institutions of Akhangaran city.

Multiple warnings on necessity to organize the sewage tank, where polluted water could be sediment and purified in order to prevent harmful materials from getting into the drinking water sources, had zero result. In conclusion of GlavGosexpertiza was indicated requirement on assessment which should be carried out as per regulations of project environmental second stage, including the following:

geological survey & material analysis on the sections with dynamic instability, ground water discharge and demonstration of landslide danger.


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1. Dust mission during unloading and requisition of materials: (a) finished

cement dust

(b) inorganic dust

Concrete batch plants at 109, 152 and 175 km

Substitution of ineffective cloth roof on bins with metallic sashes, repairing of sashes Carry out control (test) on sources of emissions with assistance of the laboratory Arrange installation of sewage treatment facilities and ensure their uninterrupted operation

Last – in autumn 2015

Cement is supplied using a special transportation means; holding of hydraulic dust control on access roads and the batch plants sites.

2. Water pollution

Batch plant at 175 km

Arrangement of washing facility with circulating water system; Maintenance of circulating water system; Reusing the water after washing the sand and concrete plant; Discontinuation of discharging return water into the pit

October November 2013, spring-summer 2014. March-2015.

water discharge has stopped.

3. Failed concrete waste piles

Concrete batch plants at 109, 152 and 175 km

Timely recycling of wastes by crushing and re-use for construction purposes Carry out supervision over the maintenance of the industrial site in good condition.

October 2013 January 2014, March 2015

Carried out regularly. Regularly.

Status of SSEMP for Quarries along the Road

Contractor has developed supply of necessary materials at few road-side quarries located at different distance from the project site. As it was indicated, the most hazardous are quarries situated in the riverbeds.

Type of Impact Affected

Areas Instructions Instruction Issue Date Remarks

1. Impact on landscape, water and ground

Riverbed & littoral zone

Reclamation of quarries after completion of mining

In accordance with Environmental action plan

Recommendation of phased reclamation

2. Air pollution Air around & inside of the villages

Hydraulic dust control on access roads

Performed irregularly

– Hydraulic control over dust on crushing plant site.

– Carry-over the crushing cars from the river bed

Hydraulic dust control complied constantly


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Status of SSEMP for Contractor, Engineer & Sub-CШЧtraМtШrs’ Work Stations

1. Contractor’s and Engineer’s offices, neighboring to each other, are situated in the very outskirt of Angren city, nearby the very beginning of the project site;

2. Subcontractors’ “Alliance Capital K/S” camp situated at 175 km; 3. Another semi-empty camp, occupied previously by ETQ and later – by Alliance – at

185 km, nearby the Kamchik & Rezak tunnels; 4. Despite the fact that in comparison with Elektrtarmoqqurilish, Alliance Capital K/S is

much better complies with requirements to environmental protection, they still failed to correct deficiencies accumulated by ETQ;

5. Few portacabins remains in the camp for accommodation of shower rooms and worker-toilets. They are not equipped with airtight containers to collect waste and grey-water, which used to flow directly into Rezak-sai river. Residents of underlying villages used it as drinking water;

6. System for collection and disposal of land, contaminated by petroleum products is in lack;

7. Floodplain of Rezak-sai become better as not much work was done by contractor during reported period. However, there is no system for collection and disposal of wastage produced in camps;

8. Currently Alliance Capital itself found sub-sub-contractor, whose camp located at 172 km. of A373. The camp was used during summer and autumn 2015. Currently empty for winter off-season, but it will be used starting from spring 2016.



Spillage of petroleum products, ground contamination

– areas, where storage tanks installed;

– filling stations

- Separate fuel/ lubricant storage area - Create natural backstop for contamination - Clean the areas contaminated with petroleum products

Quarterly

Carried out irregularly

Accumulation of household and industrial waste

Arrangement of a special area Quarterly

Carried out with some delay and irregularly

Vehicle washing Camp site and outside

Arrangement of special area Quarterly

Overflow of a cesspool with industrial and domestic effluents, contamination of ground water

Rezaksai river bed

Arrangement of a timely removal and better organization of cesspools

Quarterly

Quality of potable Water

At the site camp the drinking water supply system was not equipped with water filters. After the installation, they need periodical renewal.

Semi-annually

Preventive maintenance held during the year.

Status of SSEMP for Landscape Alteration

One of the most difficult aspects of the project 2772 is the demolition of top of the hill opposite to the contractor’s camp at 185 kilometer of A373.


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That camp was organized, equipped with portacabins, tents, and others by initial Consortium, as during tender procedure ETQ company performed in one whole consortium with Corsan. But when the tenders have passed, ETQ faced difficulties in providing the bank guarantee (insurance). In this connection between the two companies: Corsan & ETQ signed new agreement according with which ETQ has acted as subcontractor of Corsan. In summer 2013, when the hill’s breakdown happen, subcontractor "Elektrtarmoqqurilish" (ETQ) has been located in the camp, which they left in first decade of December 2013. Despite the fact that according to the contract ETQ had to perform, and therefore - to receive compensation for 20% of the entire project activity, ETQ participation in the project was very limited in both: scope & time. They performed drilling work, transferred some of the high-voltage and low-voltage towers, prepared new basement for the expanded roadway at 190-170 km, and with these participation of ETQ in the project ended as early as in 2013. The camp territory passed into the full administration of Corsan who provided camp to the next subcontractor. In 2014 it served as base for Alliance Capital. At present moment the camp is empty from people, but not empty from unusable abandoned machinery and portacabins. Exactly opposite to the camp organized unauthorized parking lot in shape of an irregular rectangle with area over 5, 650 square metres. Contractor (Spanish company Corsan- Corviam), has no permission of the State Nature Committee – GosComPrirody, neither authorization from the local government for the hill diminishing and organization of the parking lot. Notwithstanding that this issue was on the agenda in multiple discussions between the EA (PMU), engineer and contractor; none of the parties took responsibility for the hill damage. There is no corrective actions plan to restore the mountainous landscape yet. Probably, the only one scenario is restoration of the hill top, opposite to contractor’s camp at 185m kilometer of A373. This task is really complicated, as not only bulk of work needed, but also restitution of newly formed hill’s vegetation. In order to prevent erosion and spraying the mound, we need to "dress" newly created huge surface with special soluble “cloth” - biomat, soaked in a solution of biological plant growth stimulants and fertilizers, which will contribute to the formation and growth of the roots. Such geotextile fabric or biomat does not produced locally yet, it need to be purchased either abroad, or at any representative offices of foreign company in Uzbekistan, since it is not produced locally. It is hard, and even impossible to overcome this task for contractor by their own. We need to design separate sub-project, which requires special knowledge and should last more than one summer season. Apparently, another solution might be signing additional contract with national Botanic garden, or Institute of Botany of the Academy of Sciences of Uzbekistan. One of those institutions may design, monitor and insure restoration of the mountainous landscape. The simplest solution might be just leveling (flattening) newly formed platform, leaving it for further usage by road repairmen in case of machine breakage.

http://www.multitran.ru/c/m.exe?t=3713249_1_2&s1=geotextile%20fabric


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3.4 Corrective Action Plan

Recover the demolished hill at 185 km. Recover the access road to the private farm of Kahramon Kushmatov (see

photo). Previously he can drive a truck on this access road with length of 300 m. After reconstruction only narrow path to his plot left, which creates difficulties in maintenance and assembly of own farm crops.

Four (4) culverts (water sluice pipes) have been set by Corsan under the road A373, which were not envisaged in the project and not sanctioned by the engineer. The water from those culverts is directed to the territory of the agro-farms, damaging thus vegetation during rains, floods, intense melting. It is essential to find an acceptable solution that would satisfy the affected people.

Carry out restoration works of Kushminor cemetery, located directly above the

road. In this section the work has been done by Alliance Capital (main subcontractor). Thanks to their understanding, readiness for cooperation and respect to national cultural values, we managed to avoid extra explosions of the rock mass and - no less important - transferal of the cemetery, despite the fact that it was laid in the original plans of project designers, & representatives of Corsan also insisted on shifting.

Keeping the cemetery in the same place, we had changed slightly the course of the road, which skirts the ledge more smoothly than earlier. However, several graves, close to the cemetery fence, "hovered" over the road, threatening to collapse. These graves are in critical condition, it is necessary to move those into the safe place, restoring the demolished part of cemetery fence. This should be done, demonstrating all possible respect to local rituals, traditions and cultural values of Kushminor & Rezak inhabitants.


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3.5 Consultations and Complaints

Fig. 1 – The Mechanism of Grievance Submission and Redress

The mechanism of grievance submission and redress In connection with the situation around Kushminors pipeline, as well as in case of other grievances from residents of neighboring settlements, PMU proposes to use the following mechanism of grievances submission:

Each affected person (hereinafter - AP) has the right to submit a claim with respect to unforeseen environmental damage caused to the eco-system as a result of reconstruction of national highways;

PMU recommends to address the primary complaint to neighborhood committees, which may be longer process directly to the contractor, duplicating such an appeal to the Republican Road Fund (RF) and PMU;

In case if in 15–20 days the treatment remains unanswered, PMU recommends to re-address the following items to the district and regional administration, even up to the national authorities. For rapid response and coordination the following grievance redress mechanism will be suggested:

Local Grievance

Mahalla, Village

Assembly of Citizens,

Union of Farmers,

Union of Water users

RRF/PMU

Project Grievance Mechanism Team

Rayon, Viloyat

or Republican

administration PMU Social

Consultant

Affected

Household

Contractor & Sub- contractors

versus Engineer


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Within 10 days after receiving the grievance RF/PMU defines person responsible for the consistent resolution of the problem that caused the treatment;

Preparation of response to the grievance within 20 days, taking into account the opinions of local authorities and experts in the field;

In the for mentioned response should be indicated measures to be taken to solve the problem (under current contract) and determined the deadline for improving environmental situation;

By this time in counseling with AP, should be developed and defined the budget, source, i.e. from which particular article of the project funds will be transferred finance to solve the problem and developed a method of repairing the harm;

The engineer has right to appeal to Contractor with requirement to eliminate harm to the APs at their own expense of the Contractor within indicated time;

In the case of non-execution of compensatory work within agreed time, Engineer has the right to appoint a sub-contractor and pay him, with subsequent elimination of withholding amount intended for payment to the Contractor;

In case of Kushminor mahalla grievance within 20 days after receiving such a grievance, meeting with Mahalla committee was organized, negotiations held & signal received. Carriers in Riverbeds

Kushminor Watercourse

In our previous report it was said already about the restoration of the watercourse (aryk) in Rezak village, which was destroyed in 2013. We also indicated installation of the plastic pipeline for the residents of the village in summer of 2015. That was significant result of year 2015, in so far as Corsan company refused to eliminate the consequences of their activities. During negotiations with the residents, environmental engineer, ecologist of PMU they argued that the age-old irrigation ditch had no legal grounds, the villagers had no complete package of documents for the ditch (aryk). All attempts to explain to representatives of foreign company that water is a basic human right, central spiritual and cultural base for indigenous identities - made them only laugh. Representatives of Corsan did not take a trouble to find out the name of the village Rezak, which suffered from the destruction of the centuries-old irrigation ditch, in their correspondence they called mahalla Kushminor as Kushminalli. Corsan changed their attitude towards water issue when safeguard expert of PMU provide them text of the Human Right to Water and Sanitation (HRWS), which was introduced by the United Nations General Assembly on the 28 July 2010. The document explained that human right to water has been recognized in international law through a wide range of international documents, including international human rights treaties, including main international treaties explicitly recognizing the human right to water include the 1979 Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW, Art.14(2)), the 1989 Convention on the Rights of the Child (CRC, Art.24), International Covenant on Economic Social and Cultural Rights. Installation of the pipeline by Corsan was also requested by ADB's mission & this was stated in the “Aide Memoire” dated from April 2015. Thereupon, after two years of inactivity, Corsan fixed a plastic pipe with diameter of 150 mm, even if plastic pipe with diameter of 200 mm was


20

promised. The length of pipes was promised to be 1500 meters, instead 1100 meters was obtained. At the same time, we kept fears that the plastic pipes, unable to withstand the abrupt change in temperature in winter, may crack. The following steps have been taken:

Installation of locking gate on the upper point of the pipeline, so that in winter

days the water did not fall into it, which could pose threat to the pipe breakout due to water freezing at night time;

raising funds for thermal packaging insulation of plastic pipes; signing agreement with Kushminor mahalla that new pipeline is transferred to

their full disposal and under their full responsibility; Yet, risk that freezing water would increase volume of pipe, which cannot withstand abrupt temperature, remained. Even with upper sealing (incoming hole) it was impossible to ensure penetration of water through the joints, as locking adhesive cannot stand the night temperature which may drop up to – 30 degrees in mountains. Therefore, it was decided to dismantle pipeline for winter, in order to restore it at the beginning of March. Responsibility for safety of the pipes during storage imposed at local Mahalla. So, the most significant result of the reporting period was normal functioning of the ditch and reactivation of water supply for Rezak village habitants. Remained Issues are the Following:

Water, which comes to Rezak gardens via pipe of 15 sm. in diameter, is much far from that volume, which was before.

Cleaners never appeared on the project territory. The road, and even camps – those objects were inundated with household’s and construction’s waste.

In sphere of health: related HIV / AIDS Awareness Campaign, for which has been allocated 10K – those funds were also spent inappropriately, as no event or activity related to that campaign was held.

Corsan’s workers never provided with uniforms, any equipped health center in project area was observed, & medical staff never looked at the construction site. Even the first-aid kits were absent in the camps and the working areas.

Mitigation in Kushminor

Training seminars on water treatment have been conducted, distribution of seeds of varieties of vegetable crops has been underway, introduction of new kinds of vegetables, cooking classes "Healthy nutrition", in collaboration with "Association of Chefs of Uzbekistan" organized, and these activities among population of the affected areas will continue.

PART IV – CONCLUSIONS AND ACTION PLAN FOR THE NEXT PERIOD

4.1 Conclusions

During the reported period ecological status of the object has not undergone major changes due to the fact that technique was stand idle, that is, nor polluting the atmosphere, neither creating high noise affect.


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Even the main sub-contractor of Corsan company - Alliance Capital - due to lack of funding and non-payment was active only during August – September 2015. In general, no serious progress over past half-year period in reconstruction of the road may be observed. It was not systematic: either slow or, for the most part, it was not conducted at all. Each of the parties: contractor and engineer have own explanations in this regards, and such proceedings are not the main object of this report. Positive aspect was that part of the road A373, requested previously under renovation, but not used by contractor, started to be operational, returned to authority of "KamchikAutoYul", that is open to traffic, which reduced the accident rate and significantly ease burden on traffic-bearing at surface. 4.2 Recommendations

The role of experts on safeguard measures must be strengthened. They should have access to information about the flow of funds, which addressed to the protective measures; to assess and correct the IEE, to participate in the evaluation of tender results from the standpoint of protecting ecosystem and sustainable approach to the environment;

Selection procedure for position of Contractor’s specialist in ecology should be transparent for all parties. Both: Engineer and Executive Agency should be acknowledged with CV of candidates. Already in time of selection the entire complexity of challenges, which will face environmentalist, should be explained in advance;

Strict compliance with the limits of scope of work; Preventive marking the edges of action with special attention to typically sensitive

areas; Prohibition from abuse in the areas adjacent to the strip of works; Keeping adequate speed of work in sensitive area in accordance with the values

of the wildlife (this is particularly true for blasting); Minimize deterioration of soil and both: surface and groundwater; To give more attention with respect to sections of the road along the villages,

also to the river bed, very special care to alluvial zones of Rezaskai, Ahangaran-sai and Chodak-say rivers that passes through the villages;

Start recovery of local virentem, good samples which may be seen along 122–123 km of A373. This vegetation previously existed throughout the Kamchik road;

Implementation of preventive maintenance to minimize risks of dust clouds.

4.3 Action Plan for the Next Period Addressed the Company, Which Will Continue the Project Execution

Hire adequate ecologist with appropriate background and knowledge of national, international requirements and ADB’s safeguard policy, who will specifically address the environmental protection issues in sensitive area of Kamchik pass – April–May 2016;

Stop quarrying and gravel mining in the river beds – April 2016; Solve the issue of the demolished hill at 185 km of A373 – April–May 2016;


22

Engage cleanups at concrete mini-plants and the adjacent territories, contaminated during the project (109 – the biggest, 152 – the, smallest, & 175 км. – the most risky placed) – May 2016;

Remove the broken jerseys, lying in a variety along the roadside – April-May 2016;

Liquidation of slag and culled asphalt pieces along the road – May-June 2016; Conclude contract with Forestry department (LesHoz) to restore vegetation –

May–June 2016; Develop plan of action for the restoration of the vegetation cover and reduce

erosion effect after the explosions – April–May 2016; Actively implement bioengineering methods for restoration of damaged

landscape, such as sowing of perennial grasses, winter crops or legumes with high soil protection efficiency – May–June 2016;

Collect/store soil, contaminated by oil spillage, and send it for further recycling – during next reporting period (June–Jul 2016);

Apply biomat – fabric made of plant fibers (eg: straw, sponge gourd (Luffa), or mixtures of those, fortified by jute yarn in order to protect the surface from erosion, & re-vegetation (May–June 2016);

Liquidation of camp at 185 km. of A373, as work on both sides of the road near the camp has been completed – April-May 2016;

Cleaning of roadsides from debris – April –May 2016; Conservation of careers in rivers Ahangaransai (140 km & 144 km), Rezaksai

(184 km. and 187 km.) – May–June 2016; Restoration of watercourse & return channel configuration at Ahangaransai

&Rezaksai – May–June 2016; Preclude garbage dumps located everywhere around the object – April–June

2016.


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PART V – APPENDIXES

Annex 1: Laboratory test results for noise and vibration level at workplace


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Translation of letter on Alliance test results

**

To: The Head of PE

Alliance Capital

Mr. Sh.S. Mukhamedkhanov

By this letter State Republican SES reported on results of performed laboratory

measurements, performed in reference to your letter AC-SES-15-156.

Sampling and measurements of:

• noТsО anН vТbratТon lОvОl at аorkplaМО nОar СвНraulТМ СammОr, loМatОН at km 180 anН

km 183 of road Tashkent-Osh and crushing plant located at 187 km,

• lОvОl of dust at workplace of screening plant at km 175 and crushing plant km 187

conformed to the valid standards SanKM 0120-01 "Permissible noise levels at

workplaces", SanKM 0122-01 "Sanitary standards of common and local vibration at

workplaces", and SanKM 0294-11 "Maximum permissible concentrations (MPC) of harmful

substances in the air of working area".

Dosimetric measurements made along the road Tashkent-Osh (km 181 and 185) of the

gamma background and spectrometry laboratory tests of sampled rocks meet the requirements

of Sanitary rules and measurements # 0193-06.

Full chemical analyzes of water from the river Rezak (samples from km 175 and 186)

also correspond to the permitted norms.

The results of measurements and laboratory tests are attached on 7 sheets.

Chief Sanitary Physician

Signature


25

Include Alliance test results


26


27


28


29


30


31


32


33


34


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Annex 2: Non-Compliance

----------------------------------------------------------------------------------------------------------------------------

Memo1

Violating paragraph 4.18 of General Conditions of the contract number 2772-UZB, the Contractor made unauthorized demolition of top of the hill on the 175th kilometer of A373, creating platform about 100m x 80 m. with purpose to deploy trucks in front of the construction camp. There are no vehicles on that ground at the moment. In order to prevent penetration of other cars, created a ditch. Meanwhile, there are about 30 cubic meters of rock mass, remained from blasting, and about 50 tons of obsolete asphalt, excavated from the old asphalt pavement. Pursuing to meet requirements of paragraph 4.18 of General Conditions of the Contract number 2772 UZB, it is essential to take out the rock & used asphalt from the site, performing restoration of the landscape. For all these the contractor should:

Open the entrance to the ground by filling the ditch; Take out the rock from the area for further crushing & usage as raw material for the road construction; Take out asphalt & use it as the road base or shoulders; Finally, to restore the landscape.

Dinora Azimova Ascar Abduraupov

Notices #1

(Translation of Russian version of NCR):

Dear Sirs!

With regards to the letter of 2015_0603-CCSE-06/001 “Monthly program of monitoring” dated of June 3, 2015, the engineer informs and provide following instructions:

1. Monitoring Air Quality

The contractor has obtained two air quality tests from concrete plants, located at 109 km and 152 km. Both of them were not functional during testing time.

1 Since this is the first time, when we faced the requirement of formalization of every single visit, it is difficult to

submit all of it in a formal way. However, we provided some written papers on results of our visits, even if in many cases oral instruction have been given.


36

In accordance with the article 106, section II of the Contract ''On Air Quality Monitoring" said that "Display the total number of suspended particles (TSP) must be secured at least in two points, identified on the basis of the actual construction … including the location of pollution sources…"

Thus, the engineer asks the Contractor to provide air quality test reports for:

- current construction sites on 176 km - 190 km;

- station for inert materials washing @ 185 km;

- melting plant 187 km;

2. Monitoring of water quality

The contractor has provided two tests the water quality of the river Akhangaran 109 km and 152 km.

Engineer asks contractor to provide water quality test for such points as:

- Rezaksay river, near the washing station at 185 km;

- Rezaksay river, near the crushing plant at 186 km;

----------------------------------------------------------------------------------------------------------------------

Non-Compliance Notice #2

Subject: Monthly Environmental reports.

Systematically ignoring ADB policy on protective measures, violating the requirements of the contract (PP 4.21 and 106.1 General and special terms of the Contract), the terms of the customer and the instructions of the Engineer (SBE Ref. SBE-CC-09- 001 2015 NO. 627, SBE-CC -2015-07-043 No.612), starting from August 2015 Contractor ceased to report on environmental protection. If previously, PMU were complaining about the quality and timing of reporting, that is no longer available even formal statements, which reflects the aggravating situation in the environmental protection. As of 10.02.2015, the Contractor doesn’t even provided the report for August 2015. As similarly, not providing monitoring quality protocols of water, air, noise and vibration has already became as an “normal” behavior for the Corsan team in Uzbekistan. Of particular concern is the lack of response to the many comments on the dreadful state of the landscape, there are no steps has been taken to the hill reclamation of the illegally organized parking area for vehicles on the 185th km. of A-373 highway "Tashkent-Osh" (opposite to the camp, where is located "Alliance Capital".


37

Numerous oral and written notices requiring the restoration of the landscape and conducting reclamation remain unanswered, although they have a detailed and phased proposal reclamation. Ignoring this and previous notes by Contractor may be a valid reason for termination of the Contract in accordance with P. 15.1.

Safeguard expert of PMU Dinora Azimova 02/10/2015

**


SBE Ref. No.: L2772UZB-CC-2014 07-021

PROJECT Loan #: 2772-UZB, Second CAREC Corridor2 Road Investment Program - Project 1 MFF2/CWP1 Reconstruction of A373 Tashkent-Osh Road Section 58 km within km 116 to km 190 ENGINEER: Mr. KANGSIK CHO Team Leader of Engineer, Sambo Engineering CONTRACTOR : Mr. Angel Martinez Bachiller / Corsan Corviam Construction S.A cc :Mr. Jamol Shukurov, Director of Road Fund cc: Ms. Larisa Belousova , Director of Alliance Capital TECHNICAL INSTRUCTION LETTER NO. 317 Date 15 July2014

TITLE: Instruction in response of Contractor’s letter Ref. 20140709 - CCSE-07 012 In response

to TIL 307 “Damaged irrigation system in Kush minor Village” by 09th

July, 2014. ________________________________________________________________

Pursuant to Chapter 3 of the Contract, the Engineer hereby issues this Technical Instruction Letter (TIL) (with Enclosure), Contractor is hereby directed to perform the following works..

Description of Instruction:

Regarding Contractor's letter of REF. 20140709-CCSE-07.012 in response to TIL 307 “Damaged irrigation system in Kushminor Village” by 09th July, 2014 Engineer informs and instructs below as:

Contractor cannot apply Contract’s Sub clause 701.1 (d) because in this particular case, the structure is not subject to be permanently relocated but is a subject to ensure of temporary protection and preserving the functionality of the existing communication up to perform work on the construction of the ditch at the existing location according to design.

Engineer again reminds you that Contractor didn’t provide Sub clause 701.1 (a): “Before commencing construction work the Contractor shall undertake a survey to establish the detailed location of all utilities affected by the Works. Survey results shall be recorded in plan form to the satisfaction of the Engineer.

Be noted that according to Sub clause 701.1 (b): “Where works of either temporary or


38

permanent nature are to be undertaken by the Contractor in the vicinity of utilities, the Contractor shall adopt appropriate construction methods, provide adequate protective devices and take precautionary measures, in order to avoid damage to the utilities. Any damage to utilities caused directly or indirectly by the Contractor's work shall be the Contractor's responsibility."

Moreover, according to Sub clause 701.1 (c): “The Contractor shall be responsible for locating all existing structures affected by or affecting the work under this Contract prior to the start of construction. Any delay or extra expense to the Contractor due to the encountering of existing structures shall not constitute a claim for extra work, additional payment, time or damages.

Engineer strongly instructs to Contractor This destroyed irrigation system was caused by Contractor’s careless work Contractor should carry out “rehabilitation of existing irrigation ditch” “within shortest

time.

Non-Compliance Notice # 4

SAMBO III SBE SAMBO ENGINEERING 7 A Ahangaranskaya Street, Angren,

SBE Ref. No.: L2772UZB-CC-2014 07-021

PROJECT Loan #: 2772-UZB, Second CAREC Corridor2 Road Investment Program - Project 1 MFF2/CWP1 Reconstruction of A373 Tashkent-Osh Road Section 58 km within km 116 to km 190 ENGINEER: Mr. KANGSIK CHO Team Leader of Engineer, Sambo Engineering CONTRACTOR : Mr. Angel Martinez Bachiller / Corsan Corviam Construction S.A cc :Mr. Jamol Shukurov, Director of Road Fund cc: Ms. Larisa Belousova , Director of Alliance Capital TECHNICAL INSTRUCTION LETTER NO. 317 Date 15 July2014 TITLE: Instruction in response of Contractor’s letter Ref. 20140709 - CCSE-07 012 In response to TIL 307 “Damaged irrigation system in Kush minor Village” by 09th July, 2014.

Pursuant to Chapter 3 of the Contract, the Engineer hereby issues this Technical Instruction Letter (TIL) (with Enclosure), Contractor is hereby directed to perform the following works.

Description of Instruction:

Regarding Contractor's letter of REF. 20140709-CCSE-07.012 in response to TIL 307 “Damaged irrigation system in Kushminor Village” by 09th July, 2014 Engineer informs and instructs below as:

1. Contractor cannot apply Contract’s Sub clause 701.1 (d) because in this particular case, the structure is not subject to be permanently relocated but is a subject to ensure of temporary protection and preserving the functionality of the existing


39

communication up to perform work on the construction of the ditch at the existing location according to design.

2. Engineer again reminds you that Contractor didn’t provide Sub clause 701.1 (a): “Before commencing construction work the Contractor shall undertake a survey to establish the detailed location of all utilities affected by the Works. Survey results shall be recorded in plan form to the satisfaction of the Engineer.

3. Be noted that according to Sub clause 701.1 (b): “Where works of either temporary or permanent nature are to be undertaken by the Contractor in the vicinity of utilities, the Contractor shall adopt appropriate construction methods, provide adequate protective devices and take precautionary measures, in order to avoid damage to the utilities. Any damage to utilities caused directly or indirectly by the Contractor's work shall be the Contractor's responsibility."

4. Moreover, according to Sub clause 701.1 (c): “The Contractor shall be responsible for locating all existing structures affected by or affecting the work under this Contract prior to the start of construction. Any delay or extra expense to the Contractor due to the encountering of existing structures shall not constitute a claim for extra work, additional payment, time or damages.

5. Engineer strongly instructs to Contractor 1) This destroyed irrigation system was caused by Contractor’s careless work 2) Contractor should carry out “rОСabilitatiШЧ ШП ОбistiЧР irriРatiШЧ НitМС” “within

shortest time, 3) During “rehabilitation work”, Contractor should provide

temporary water supply system ( ex: polyethylene pipe) for residents and agriculture by his own expenses.

The Engineer certify that this TIL is within the scope of subject Enclosure:

Date: 15 July 2014 ATj'ChP Signature of Team Leader


REF. 20150708-CCSE-07.005 Response to your letter nº576 about Environmental issues To: Mr. Cho Kangsik Team Leader Engineer Sambo Engineering, Co., Ltd. Cc: Mr. Shukhrat Tagaev, Deputy Director of Road Fund. Cc: Mr. Narendra Singru, Senior Transport Specialist, Transport and Communications Division Central and West Asia Department, ADB. Project: “RОМШЧstruМtiШЧ ШП A373 TasСkОЧt – Andijan Road Section, km 116 to km 190 (58 km)" Subject: Response to your letters nº576 about Environmental issues Dear Sirs,


40

We refer to your letter dated 25 June 2015 (ref. SBE-CC-2015 06-015 letter no.576) regarding Environmental issue. To remind some of the outstanding issues, because the Engineer hasn’t shown any progress in the resolution thereof, the Contractor exposes:

- The rehabilitation of irrigation systems of Village of Kushiminali: As we have explained in our last letter regarding this issue (Ref: 20150504-CCSE-05.002 Response to letter Ref. SBE-CC-2015 04-025 Engineer’s notice of recovery of Bill Nº100), Contractor is waiting since middle of 2014 for this approval/instruction, which clearly specifies the scope of works to execute. Up today, Contractor does not have any answer from the Engineer.

In addition, Contractor would like to request the Engineer position on this issue, because, as he must knows, this irrigation system did not meet with the Law of the republic of Uzbekistan “On water and water use”, according to the Resolution of the Cabinet of Ministers from June 14, 2013 Nº 171 as well as the Decree of the Cabinet of Ministers from March 19, 2013 № 82 "On approval of Regulations on the Procedure of water use and consumption in the Republic of Uzbekistan". Contractor would like to know the Engineer’s opinion according to the Contract about this illegal issue, because Contractor has been pressed by the Engineer, the Customer and the ADB to solve this issue, and to commit an illegality. - The restorations of damaged riverbeds alongside of the Rezaksay River: Engineer must clarify this issue, and explain the scope of works that the Contractor/Subcontractor shall carry out, because, according to the Contractor’s opinion, there are not environmental damages regarding this issue. - The restorations/clearance of the all damaged construction site: Engineer must clarify this issue, and explain the scope of works that the Contractor/Subcontractor shall carry out, because, according to the Contractor’s opinion, there are not Environmental damages regarding this issue because they have been solved. Best regards. Mr. Ángel Martínez Bachiller Contractor’s Representative Non-Compliance Notice #6 REF. 20150826-CCSE-08.006 Response to your letter nº611 about irrigation system in Kushminalli village To: Mr. Cho Kangsik Team Leader Engineer Sambo Engineering, Co., Ltd. Cc: Head of P.E. ALLIANCE CAPITAL K/S Cc: Mr. Shukhrat Tagaev, Deputy Director of Road Fund. Cc: Mr. Khuong Luu, Transport Specialist ADB Project: “RОМШЧstruМtiШЧ ШП A373 TasСkОЧt – Andijan Road Section, km 116 to km 190 (58 km)" Subject: Response to your letter nº611 about irrigation system in Kushminalli village


41

Dear Sirs, We refer to your letter dated 28 July 2015 (ref. SBE-CC-2015 07-042 letter no.611) in response to our letter “20150717-CCSE-07.0013”regarding the Kushminalli village irrigation system. Contractor would like to inform you again as follows: - Again, Contractor is seriously concerned about the lack of careful of the Engineer in their answers, due to they don’t read the letters submitted by the Contractor and their own letters. This is the first time that the Engineer says that this irrigation system is in agreement with the Law of the Republic of Uzbekistan. .- According to the Engineer’s letter, Chapter VII, Art. 25 say: “Water objects are provided for use primarily for drinking and household needs of the population”. As we have explained many times, this is an irrigation system. It is not used for drinking and household needs2. - According to the Chapter VII, Art.22 “General and special water use”: “Varies total water use -Implemented without structures or technical devices influencing the condition of water, and special water - carried out with the use of such installations or devices. For special use of water in the some cases can also be classified using water objects without structures or technical equipment, but influencing the state of waters. The list of types of general and special water use is established by agriculture and water, nature protection, sanitary supervision, geology and mineral resources. (In edition of the Law N 421-I of 25.04.97) In view of this Article, and taking into account that the Kushminalli village irrigation system has used structures and technical devices that influenced the condition of the water, this system must be considered like a “special water use”. Engineer must also revise the Chapter XIII “The use of water bodies for agricultural needs” included in the law submitted by him. Contractor thinks that this irrigation system does not comply with this Chapter of the Law. For that reason, Contractor still is in the opinion that this irrigation system was illegal. - As we have explained, this irrigation system is for “Special water use”, not for “General water use” as it is exposed by the Engineer .- The Employer and the related authorities must prove with relevant documents the assertion that this irrigation system is not illegal. - Regarding the Engineer’s requests: - Contractor cannot fulfill of the Contract regarding this matter, because, as we have explained, this irrigation system was illegal. If the Contractor restores this illegal system, is committing an illegality, and violating the Law and the Contract. Engineer assures in his letter that has instructed many times to the Contractor to restore this system. That is to say, the Engineer is instructing another time the Contractor to violate the Law and the Contract. Contractor will not submit any report of Restoration plan, because this is an illegality.

2 Which is wrong, as many households used it as a drinking water


42

The Engineer does not have any reason according to the Contract to deduct some amounts related to this issue If the existing steel pipe (pk 44.6) is one part of this irrigation system, it was illegally executed. The Contractor is not going to take any measures on it to avoid committing an illegality. Contractor is not going to take any measures regarding this matter until the Engineer proves with the relevant documents that this irrigation system is not illegal. Best regards. Mr. Ángel Martínez Bachiller Contractor’s Representative CORSÁN CORVIAM CONSTRUCCIÓN, S.A. ----------------------------------------------------------------------------------------------------------------------


Sambo EnРТnООrТnР .

24.06.2015 . 373 - . 181-182 . , ,

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43


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45

Alliance Capital, 171-172 . , , я

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**

Non-compliance # 8

в ч

а: Е ч ы ч х а а щ ы.

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46

(SBE Ref. SBE-CC-2015 09- 001 NO. 627, , SBE-CC-2015-07-043 No.612)

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29.09.2015 . 2015 .

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Non-compliance # 9

Note on the environmental state of the object for July 2015

AcМorНТnР to P.106 ContraМt № 2772 UГB "SpОМТПТМatТons" SОМtТon 100- "Preliminary and

general requirements", the monitoring of quality of air, water, noise and vibration should be

conducted at least once a month and more frequently if required by the Engineer.


47

In a report of May 2015, dates from June 3, 2015 under number 20150603-CCSE-06.001, the

Contractor provided the test results on quality of air, water, noise and vibration on the basis of

samples taken in areas which currently work is not carried out.

In this regard, suggestions were made by PMU, and also it was sent a letter of Engineer dated

08.06.2015, unНОr № 568.

In a report of the July 2015, the Contractor should cover the laboratory tests of construction

area 175-190 km., Where in July 2015, the construction works and production of building

materials were carried out. The water samples for comparison should be taken from the river

before and Ц and after them.

Beside, on territory of Alliance Capital camp builders on 24.06.2015, it was recorded

numerous spots of and garbage accumulation place and household waste, where it was

made the verbal warning to the deputy chief of the construction site with requirement to clean up

the territory and dispose of spills of lubricants. As of 29 July 2015, there is no any positive

changes on current issue.

Specialist of protective measures

PMU under Republican Road Fund of Uzbekistan D.Azimova

Specialist of

Sambo Engineering: A. Abduraupov

**

Non-compliance # 10

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( . . 4.21 106.1 К ),


48

(SBE Ref. SBE-CC-2015 09- 001 NO. 627, SBE-CC-2015-07-043

No.612), 2015 .

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02.10.2015 . 2015 .

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02.10.2015

Documents

Environmental Monitoring Report...In terms of ecologic safety level “B” category has given to 116–190 km road section of A373 highway. This environmental monitoring report for