Page 1 INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC2396 Date ISDS Prepared/Updated: 11/30/2006 I. BASIC INFORMATION A. Basic Project Data Country: Philippines Project ID: P071119 Project Name: PH-Private Sector Development for MWSS Financial Rehabilitation Task Team Leader: William D. Kingdom Estimated Appraisal Date: February 19, 2007 Estimated Board Date: June 14, 2007 Managing Unit: EASUR Lending Instrument: Specific Investment Loan Sector: Water supply (100%) Theme: Other urban development (P) IBRD Amount (US$m.): 100.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER 25.00 25.00 B. Project Objectives [from section 2 of PCN] B. Project Objectives [from section 2 of PCN] The Project development objective would be to improve MWSS? financial status through enhancement of MWSI revenues. This will be achieved through: (i) upgrading the level of water supply services in the west concession area (MWSI) via reconstruction of the distribution network, better control of non- revenue water, improved performance of provided services, and increase in water sales; and, (ii) strengthening the associated institutional arrangements focused on managerial responsibility for regularly monitoring the status of distribution network and ensuring sustainability of high- quality, state-of-repair of production and distribution facilities. C. Project Description [from section 3 of PCN] The Maynilad Water Services Inc (MWSI) is a private company awarded a government concession through the Metropolitan Waterworks and Sewerage System (MWSS) to operate the West zone of Metro Manila (population=7.9 million) for 25 years (1997-2022). The MWSI concession agreement includes obligations to provide water supply connections, continuity of Page 2 water supply and ensure adequate water quality. They are also obligated to provide sewerage and sanitation services in compliance with wastewater standards. The water supply system currently has very high physical and commercial non-revenue water levels (approximately 60%), insufficient water pressure (affecting 3 million people) and in some areas 24 hour service cannot be provided (affecting 3 million people). Since being awarded the concession in 1997, MWSI has had financial difficulties and in 2003 filed a petition for Corporate Rehabilitation. In 2005 a Debt and Capital Restructuring Agreement and a Rehabilitation Plan was approved that among other things set targets for increasing the billed water volume (from 700 Mld to 1800 Mld by 2015) which would require an associated reduction in non-revenue water. The Bank-supported project (Phase 1) will assist in the financial rehabilitation by restructuring and rehabilitating the water supply network in the northern and central hydraulic areas of the MWSI concession in order to reduce non-revenue water. It will include the following components: Component 1: Establishment of Hydraulic Areas. The component would include strengthening- restructuring of the primary distribution network through establishment of 35 separate hydraulic areas, each fed by a single monitored inflow. Works would include separation of hydraulic zones, laying of about 180 km of primary mains, construction of two balancing reservoirs, and upgrading of pumping stations. Component 2: Zone Rehabilitation. The component would involve the establishment of 128 zones within the 35 hydraulic areas, each fed by one or two monitored inflows. The works would include (a) full or partial replacement of the distribution network (dia 50-300 mm), and installation of about 250,000 service connections, flow meters, pressure reducing valves and associated works in 90 priority zones, and (b) provision of water meters, transport, construction equipment, various instruments and computers. The rehabilitation would involve separation of zones, full replacement of pipes with proven unsatisfactory conditions, namely asbestos cement pipes, pipes deeper than 2 m that are difficult to locate, and pipes where burst rates are shown to exceed 4 bursts per km and year. Component 3: Services and Training The component will include engineering support for design and construction management and supervision, institutional study to strengthen implementing and operating capacity of MWSI, and monitoring of the project results and outcome. D. Project location (if known) Manila's west zone concession area covers 540 km2 and consists of nine cities and two municipalities in Metro Manila and one city and five municipalities in the province of Cavite. The project will be located in all zones excluding the Southern zone. E. Borrower’s Institutional Capacity for Safeguard Policies [from PCN] MWSI has recently completed the Manila Second Sewerage Project (MSSP) which was partly financed by the Bank. Based on this and the various infrastructure projects which it has Page 3 undertaken in the past eight years, MWSI has demonstrated its institutional capacity to ensure compliance with Bank's safeguard policies and the Philippine government's environmental and social regulatory requirements. Monitoring records indicate MWSI has performed satisfactorily. F. Environmental and Social Safeguards Specialists Mr John Morton (EASEN) Ms Victoria Florian S. Lazaro (EASSD) Ms Maya Gabriela Q. Villaluz (EASEN) Mr Shunong Hu (EASUR) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) X The project impacts are those associated with the new construction and rehabilitation activities necessary to restructure the distribution networks to establish the hydraulic areas and zones as well as the actual implementation of the works necessary to reduce non-revenue water in each of the zones. Environmental Assessment Framework: MWSI is preparing a programmatic environmental management plan that will cover the scope of the proposed works. As rehabilitation within the individual zones will be undertaken in reaction to monitoring and planning that will be done during project implementation, the framework will allow for the necessary flexibility in the detailed design of individual investments to account for slight changes in the location, phasing and type of works to be undertaken in a given area. The plan will include an EMP that would include standard operating procedures for contractors. The issues to be covered are anticipated to be those associated with construction including traffic, health and safety, use and removal of asbestos cement pipes, erosion control, and management of backfill material, waste management including fuel and oil and chance find procedures. Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X The Resettlement Policy prepared by MWSI was submitted on August 29, 2006 to the Bank for review. This has been reviewed and found in compliance to OP 4.12. This will govern circumstances under the project that require land acquisition, compensation, and resettlement of Displaced Persons and susceptible communities. MWSI will formulate overall framework plan for the conduct of Social Impact and Land Acquisition Assessments to cover the different stages of the project where private properties and informal settlements are affected. Safety of Dams (OP/BP 4.37) X The water supply for the system to be rehabilitated originates from a reservoir that is retained by the Ipo Dam, which is itself fed by a reservoir retained by the Angat Dam (see diagram in Annex). As both dams are >15 m in height, the Safety of Dams Policy (OP4.37) is triggered. The Task Team has had initial dialogue with the Borrower on the requirements of the policy and they indicated their willingness to conduct further assessments. The Task Team has engaged a Page 4 Safeguard Policies Triggered Yes No TBD dam specialist to join the team. Previous documentation in relation to the dam safety assessment on Angat Dam has been provided to the Bank for review. The dam specialist of the Task Team will visit two dam sites to assess the situation and conduct further dialogue with the Borrow in early November 2006. During his visit, an action plan for further assessment by an independent expert for the safety of two dams would be discussed and agreed upon. The Task Team has had initial dialogue with the Borrower on the requirements of the policy and they indicated their willingness to conduct further assessments. The Task Team has engaged a dam specialist to join the team. Previous documentation in relation to the dam safety assessment on Angat Dam has been provided to the Bank for review. The dam specialist of the Task Team will visit two dam sites to assess the situation and conduct further dialogue with the Borrow in early November 2006. During his visit, an action plan for further assessment by an independent expert for the safety of two dams would be discussed and agreed upon. Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X Environmental Category: B - Partial Assessment III. SAFEGUARD PREPARATION PLAN A. Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared: 01/04/2007 B. For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: N/A C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing 1 should be specified in the PAD-stage ISDS. D. Timetable for EA preparation: Scoping with stakeholders - September 20 2006 Data collection and necessary monitoring - August 30 2006 First draft IEE report - August 30 2006 First round public consultation - September1-15 2006 Second draft EA/EMP reports & first draft EA Summary - October 15 2006 Second round public consultation - October 30 2006 Information disclosure - December 15 2006 E. Timetable for Dam Safety work Desk review by WB dam safety specialist 1 Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in-country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons. Page 5 - October 10 2006 Site visit by WB dam safety specialist - November 5-10 2006 Completed assessment by independent expert - December 1 2006 IV. APPROVALS Signed and submitted by: Task Team Leader: Mr William D. Kingdom 11/29/2006 Approved by: Regional Safeguards Coordinator: Mr Glenn S. Morgan 11/30/2006 Comments: Sector Manager: Mr Keshav Varma 11/30/2006 Comments: