Document of The World Bank FOR OFFICIAL USE ONLY Report No: 25250 IMPLEMENTATION COMPLETION REPORT (CPL-38720; SCL-38726) ON A LOAN/CREDIT/GRANT IN THE AMOUNT OF US$ 99 MILLION TO THE RUSSIAN FEDERATION FOR AN EMERGENCY OIL SPILL RECOVERY AND MITIGATION PROJECT December 30, 2002 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective) Currency Unit = lluble 31.867 = US$ I US$ I = .03138 FISCAL YEAR 1995 2003 ABBREVIATIONS AND ACJOWNYMS EBRD European Bank for Reconstruction and Development FRR Financial Rate of Retum GOR Govermnent of Russia IBRD Intemational Bank for Reconstruction and Development INIC Intemational Management Contractor NGO Non Governmental Agency PIU Project Implementation Unit SNA Social Needs Assessment USAID United States Agency for International Development WSP Water Separation Plant Vice President JohaTjcs Linn Country Manager/DLrector: liani Schwcitzer Sector Manager/Director: Hosseia Rpzavi Task Team Leader/Task Manager: William R. Porter RUSSIAN FEDERATION Emergency Oil Spill Mitigation CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 1 4. Achievement of Objective and Outputs 4 5. Major Factors Affecting Implementation and Outcome 7 6. Sustainability 8 7. Bank and Borrower Performance 8 8. Lessons Learned 9 9. Partner Comments 10 10. Additional Information 15 Annex 1. Key Performance Indicators/Log Frame Matrix 16 Annex 2. Project Costs and Financing 17 Annex 3. Economic Costs and Benefits 18 Annex 4. Bank Inputs 19 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 20 Annex 6. Ratings of Bank and Borrower Performance 21 Annex 7. List of Supporting Documents 22 Project ID: P040409 Project Name: Emergency Oil Spill Recovery and Mitigation Team Leader: William R. Porter TL Unit: COCPO ICR Type: Core ICR Report Date: December 23, 2002 1. Project Data Name- Emergency Oil Spill Recovery and Mitigation LIC/TFNumber: CPL-38720; SCL-38726 Country/Department: RUSSIAN FEDERATION Region: Europe and Central Asia Region Sector/subsector: Oil & gas (98%); Other social services (2%) KEY DATES Original Revised/Actual PCD: 02/22/1995 Effective: 06/29/1995 06/29/1995 Appraisal: 03/20/1995 MTR: Approval: 04/25/1995 Closing: 03/31/1998 06/30/2002 Borrower/lImplementing Agencv: RUSSIAN FEDERATION/KOMINEFT Other Partners: EBRD STAFF Current At Appraisal Vice President: Johannes F. Linn Wilfred Talwitz Country Manager: Julian F. Schweitzer Yukon Huang Sector Manager: Hossein Razavi Jonathan C. Brown Team Leader at ICR: William Porter Doug McKay ICR Primary Author: Richard Bemey (Consultant) 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Safisfactory, U=Unsatsfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: HL Institutional Development Impact. SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: HS Project at Risk at Any Time: No 3. Assessment of Development Objective and Design, and of Quality at Entry 3 1 Original Objective: Background: One of the world's largest oil spills occurred during the autumn of 1994 in the Komi Republic (North of the European Russia), as a result of multiple ruptures of the regional oil pipeline. This 148 km pipeline from Kharyaga to Usinsk transported up to 11 million tons of oil a year, evacuating oil from several producing entities. It had been built in stages throughout the mid-70s and 80s and, by the time of the spill, included a northem, above-ground section (approximately 40 km of 325 mm pipeline, the so-called Section 1), and the southern, underground section (approximately 110 km of 530 mm pipeline, the so-called Section 2). Komineft, the regional oil production association and owner and operator of the pipeline, realized in 1992 that the pipeline integrity was deteriorating, due primarily to the high concentration of corrosive water (approximately 25%) in the transported fluid. The pipeline had a history of spills starting as early 1982. A program of replacement was begun, but due to lack of funds, was only 60% completed by the time of the multiple pipeline rupture in Section 2. The cumulative volume of the spill was estimated in excess of 100,000 tons (730,000 barrels), more than three times the amount spilled by the Exxon Valdez, which was now trapped in bogs, creeks, and dikes, waiting to be released by the spring floods. Heavy rains in September 1994 had already caused the failure of some temporary dikes constructed to contain the oil. Over 20,000 tons of oil were released into the Kolva River, causing serious damage to downstream communities. It was recognized that the existing containment structures, which had been built quickly, with the limited resources then available, would be inadequate to contain the oil when the water level rose (up to nine meters) during the spring thaw, which usually occurred mid May. The potential release of this massive quantity of oil into the river system would have devastated the downstream communities and caused widespread ecological damage in the region. To contain the oil, existing structures needed to be reinforced and new structures needed to be completed in the short time available before the spring thaw. The extent of the spills led to widespread coverage by the intemational press. The international environmental community voiced its serious concern about their potential impact. In October 1994, the Komi Republic Emergency Situation Commission declared an emergency situation in the Kolva River area. However, the Govemment of Russia and Komineft, the pipeline operator, were not able to provide the resources needed to adequately cope with the problem. The President of the Bank was sufficiently concerned with the potential magnitude of the ecological impact of the spill that he personally raised the matter with the Govenmment of Russia (GOR) at the highest level in November 1994. After some delay, apparently due to intemal debate, the Prime Mister wrote to the Bank on January 23, 1995, requesting emergency assistance in containment and cleanup of the existing situation, and in mitigating against similar events in the futures. The Bank had preliminary mission in the field by the beginning of February. Given the late date of the Government's response, and the limited time now available to undertake remediation action before the spring floods, the risks of being unable to respond quickly enough to effectively assist in avoiding a major ecological disaster were extremely high. In recognition of the emergency nature of the situation, the Bank established two essential conditions for successful implementation: (i) that a contractor with previous intemational experience in oil spill clean up would be hired on a sole source basis: (ii) the Government put $12 million into a special account to be used to pay the mobilization fee of the intemational management contractor (IMC) until the Bank financing became available. The Government agreed to provide $12 million. The contractor was hired in early March, and the Bank sent a preparation/appraisal mission in mid-March 1995. The mission met with all concemed parties. It visited local affected villages and met with, and gained the support of, local and intemational NGOs (the committee of the Revival of thc Komi people, the Save the Pechora Committee, and Greenpeace). A social assessment was included in this preparation work, to assess the impact of the spill on the people and to elicit their views on what they needed as relief and mitigation. The Canadian Govemment provided C$1 million for an assessment of the environmental status of the area and the technical condition of the pipeline and USAID provided funding for an oil spill expert to assist Komineft with spill planning. EBRD agreed to provide up to $25 million for the Emergency Project and arrange a grant to fund initial inspection services needed to verify the work of the IMC and the work related to replacing the pipeline's rapidly deteriorating middle section. The Bank loan proposal was presented to its Board on April 25th 1995. The Bank's major challenge was to design a project that would be responsive to the current emergency conditions and would also support long term solutions to help ensure that similar emergencies would not reoccur in the future. Water that separated from the oil -2- and settled in low spots was the prime cause of intemal pipeline corrosion and pipeline failure. An oil-water separation facility was needed to that would eliminate the cause of internal corrosion, but the time available was insufficient to design and cost such a unit. It was, therefore, included into the project in a summary format, with the expectation that the details would be worked out during implementation. The objectives of the project were defined as assisting Komineft and the Russian Federation to: (i) Stabilize the oil in the spill area prior to the 1995 spring thaw to minimize the amount of oil released during runoff and prevent ecological damage in the Pechora River Basin; (ii) Continue cleanup in an environmentally appropriate way and minimize damage to the impacted areas and people; (iii) Support safe pipeline operations in the near term and evaluate the need for a replacement pipeline investment project for the longer term; and (iv) Identify and implement other measures to mitigate against future oil spills. 3.2 Revised Objective: The objectives were not revised. 3.3 Original Components: Immediate response to minimize environmental and social damage of the 1994 oil spills: * Contain the oil spill to minimize additional environmental damage; and * Assist the affected people (social mitigation). Medium term environmental response: * Clean-up oil spills in environmentally appropriate ways to minimize damage to impacted areas and people; * Implement an environmental monitoring evaluation of the affected area; * Complete the replacement of the remaining identified defective portions of the southern and middle portions of Section 2 of the pipeline; * Undertake an integrity assessmerlt of the entire pipeline and undertake repairs and remediation as required; and * Support safe pipeline operations. Enhance long term safety offuture pipeline operation by: * Enhance Komineft's emergency spill repair, containment, and recovery capacity; * Complete the construction of a Water Separation Plant needed to reduce future pipeline corrosion and installation of associated facilities needed to enhance safe pipeline operations; * Evaluate the need for a replacement pipeline investment project for the longer term; * Identify and implement other measures to mitigate against future oil spills; and * Study alternative oil transport options, including a new, "dry oil" pipeline to mitigate against similar spills in the future. 3.4 Revised Components: The components were not revised. 3.5 Quality at Entry: Quality at entry was highly satisfactory. The project was supported at the highest level of the Government. It met the borrower's immediate short term emergency needs to stop further environmental damage from the oil spill, its medium term need to remediate the damage from this and other spills in the area, and, just as importantly, its longer term need to upgrade the pipeline transmission system so that such Jarge spills would not reoccur. Both the Government and the implementing agency, Komineft, demonstrated a high level of commitment to rapid project implementation. The Government provided the necessary emergency funding and authorized the engagement of an IMC on a sole source contract, and Komineft hired and supported the IMC, so that the first stage of the project, the contaimnent of the oil spill before the spring floods, was implemented in a timely fashion. - 3 - 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: The overall outcome of the project is satisfactory with many components being highly satisfactory. The project resulted in containment of the oil spill, implementation of a social support program, repair of the regional pipeline, training on pipeline welding and welding quality control techniques, training on the use of special pipeline inspection tools (so-called 'intelligent pigs') to detect any weaknesses in the pipeline, and reduction in the future rate of pipeline deterioration through the construction of a proper water separation processing facility. Most importantly, there have been no leaks from the refurbished pipeline. The project has created a growing environmental awareness and concem at the company level and has introduced intemational best practices in response to such major problems. The company has also become much more sensitive to the environmental aspects of it operations (both on its pipeline and in its oilfields). Management's level of expertise and awareness has grown considerably. 4.2 Outputs by components: Containment of the oU spill to minimnize additional environmental damage [Highly Satisfactory] The primary, immediate objective, that of avoiding a potential environmental disaster from the release of massive oil spills into the Pechora river system, was achieved. Virtually no oil was released into the Kolva river during the spring thaw and subsequent cleanup. This success was attributed to the IMC's rapid mobilization of the local subcontractors, its detailed supervision of the work of the local contractors, and, also by the fortuitous weather pattern of warm days and cold nights that slowed the thaw process and greatly reduced the rapid increase in river flood levels. However, once the emergency of the potential for a large release of oil into the Pichora estuary system was avoided, Komineft's interest in implementing the remainder of the project flagged somewhat and after releasing the IMC, it continued the work on its own at a much more leisurely pace. According to data from Komineft, 270.4 hectares were contaminated and damaged by the 1994 oil spill. As of September 1, 1999, 161.79 hectares had been reclaimed and commissioned but 19,860 cubic meters of oil and 56,600 cubic meters of sludge was still in temporary containments (polygons). The company told the October 2000 Bank supervision mission that there had been no direct oil releases into the Kolva river and no oil slicks observed since the pipeline was restored. The mission confirned this report with the Usinsk municipal environmental authorities. Villagers also reported that they had started to catch fish species with low tolerance to oil pollution. In May 2002, 237 hectares of the 270 hectares originally contaminated land had been reclaimed leaving only 33 hectares to be reclaimed during the 2002-2003 operating seasons. Assistance to the affectedpeople (social mitigaton) [Satisfactory] The affected populations were rural communities. Their economies were largely based on traditional activities, highly dependent on the maintenance of water quality in the rivers both for direct consumption, agricultural/livestock activities, and fishing. The Bank organized (and the Canadian Government financed) a Social Needs Assessment (SNA) of six major communities along the affected rivers. Other social expenditure priorities were identified through a community consultation process. The process identified two kinds of requested mitigation activities: (i) those responding directly the impact of the recent oil spill; and (ii) those responding to decades of neglect by both oil and mining companies and the government. The Government's concem, however, focused primarily on only the former. In both instances, the affected communities place heaviest emphasis on reliable drinking water and improvements of community health care and medical supplies. In addition, uncontaminated cattle feed was of primary concem to two communities. It is instructive to note that the same priorities were highlighted by the IBRD-fimded consultant several years later. Villagers were, in general, dissatisfied with the Social Mitigation Program. In addition to mitigating the recently created problems, they had expected mitigation of many long festering problems that the project was not designed to confront. In retrospect it appears that expectations were too high relative to the total funds available. In addition, delays in the construction of water supply systems and other approved infrastructure generated a negative attitude toward the program as a whole. Villagers also felt there was a lack of transparency in the program's decision making process, and local authorities and the PIU failed to communicate information about where funds -4- had been spent and what were the causes of implementation problems. The villagers' dissatisfaction probably also reflected their long-standing resentment about Komineft's pattern of behavior because they felt the company never really listened to their concerns and neglected the environmental impact of their normal operational practices. Villagers also confused IBRD's obligations with those of EBRD, and the latters inability to disburse ruble funds through local banks was a cause of significant delays in implementing the program. The decision to "jointly" co-finance the social mitigation program meant that when EBRD encountered payment problems, it impacted the entire program and not just their small portion of it. "Parallel" co-financing would have been so much better. The second round of social mitigation fund expenditures were focused on more easily implemented supply of quality breeding calves and fodder. The IBRD share of the program was completed in full but not as quickly as had been planned. The original program was for $4.53 million, of which $3.95 million was fully committed (World Bank $2.82 million; EBRD $0.70 million; Komineft $0.43 million). These funds went for supplies of animal fodder and calves: drilling of wells for potable water, medical equipment and supplies, including laboratory equipment for environmental control and for veterinary and sanitary evaluations, food supplements for children under 2 years old, summer vacations for children at health rehabilitation centers away from the contaminated area (150 in 1995 and 225 in 1997) and the completion of a village school and village kindergartens. Higher than expected costs of some items (health center, village school) had led to a lower level of delivery of some of these supplies relative to original projections. Clean-up of oil spills and land reclamation [Satisfactory] Clean-up of the'oil /soil residues and restoration of the storage sites started in 1996. Whenthe IMC contractors left, Kominet continued the work, aided by various regional bodies, but it made slow progress during the period when ownership was shifting from the public sector to the private sector. When Lukoil purchased controlling interest in Komineft in 1999 from its original private sector owner, it reinvigorated the clean-up process and, by May 2002, all but 33 hectares of the land from the 1994 oil spill had been reclaimed. Processing of the mixture of oil and soil tumed out to be a difficult assignment in the harsh northern climate and Komineft, and eventually Lukoil, experimented using a number of techniques to separate the oil from the soil. Efforts at land disposal, which involved removing oil from one area and transporting it to another, more protected one, including putting oily peat into sand pits, increased the number of areas needing eventual cleanup. It was found that burning of peat bogs just drove the oil further down, to where it could no longer be mopped up. This practice was not endorsed at all by the IMC but unfortunately it did happen. Most areas were resistant to microbial degradation, either because there was too much oil in the soil, or too much bum residue coating the oil. Komineft monitors the ground water quality from observation wells drilled in the region. In September 2001, the sampling indicated that water content in the upper Quatemary and middle Quatemary aquifers was within the maximum permissible concentration, and in the shallow water-carrying horizons, are slightly contaminated with oil products. Water quality monitoring on the sites of the 1994 oil spill is planned to continue in 2003. Environmental monitoring of the affected area [Satisfactory] The project focused on containment and cleanup of the oil spill. However, it also included a relatively small social-economic rehabilitation and support program. A baseline study of the affected areas was implemented by a t6am of consultants, as part of the project appraisal process, during the month of February 1995 and submitted to the Bank in March 1995. It covered the impact on state farms and agricultural lands, reindeer habitat and migration corridors, rivers contamination and fisheries, and socio-economic impact of riparian villagers, and a monitoring program. A follow-up environmental and socio-economic study was supposed to be implemented in 1996 to provide guidelines for further support in these areas. However, extended contract negotiations delayed the mobilization of the consultant for well over a year. The work actually started in February 1997 and was completed in July 1998, but unfortunately, a financial dispute between the consultant and Komineft delayed the issuance of the final report until September 2001. The objectives of this studies were to assist Komineft in: (a) identifying the priority environmental and socio-economic issues for the region, as related to residual impacts resulting from oil spills and to areas that may be affected by the further releases of spilled oil; (b) designing additional environmental and socio-economic - 5- mitigating actions and implementation plans; (c) identifying the applied research needs to support the above programs; and (d) developing longer-term environmental and socio-economic monitoring and mitigation plans. Several studies were implemented to determine how to best meet the identified priority environmental and social concerns including the treatment of contaminated soil. On the social side, the assessment of the social and economic consequences of the environmental problems required a simultaneous analysis of contamination of water, soil and food sources, within the context of other social issues connected with changing living standards and the changing economic situation. Safety of groundwater and rivers were of the highest priority, in that they directly impacted the lives and livelihoods of all local residents. Contamination resulting from the Komi oil fields spills is undoubtedly one of the main causes of ecological damage to the river ecosystem; although, the contamination process began well before the spills of the early 1990s since many other fields operating throughout the river basin contributed to the problem. Replacement of remaining defective portions the southern and middle sections of the pipeline [Highly Satisfactory] Sixty-four km of defective pipeline were replaced in Section 2 during the winter construction seasons in 1995 and 1996 in a highly satisfactory manner. Integrity assessment of the entire pipeline and remediation and repairs were undertaken as required. A special purpose inspection tool (so-called "intelligent pig") was used in 1997 on Section 2, and the indicated required repairs were undertaken in 1998. In addition, Komineft carried out another inspection program in 2000 on the remainder of the pipeline. Komineft now carries out an annual maintenance program for the entire pipeline and plans to send 'intelligent pigs' through the pipeline once every three years. Support safe pipeline operations [Highly Satisfactory] Komineft hired a consultant to undertake a pipeline engineering and technical inspection program, which included, among other objectives: (i) an assessment of the pipeline operating environment and the development of a set of recommendations to improve it; (ii) preparation of recommendations for the creation of a temporary leak detection system; and (iii) development of measures to respond to potential emergency oil spills with a view of reducing their impact on the environment. This operation was highly satisfactory because in addition to fulfilling the objectives of the program, the consultant trained local staff and today Komineft has the capacity to manage the inspections and carry out the required repairs on their own. The company established an emergency spills prevention unit has been equipped with specialized equipment and has received specialized training. Identify and implement other measures to mitigate againstfuture oil spils [Satisfactory] A review of the remaining project budget in late 1996 showed that there were insufficient funds available to finance all of the operational improvements that Komineft needed to reduce the risk of further spills from the pipeline system to acceptable levels. Items not yet financed include: * The Water Separation (water knock-out) Plant (WSP) to reduce the water content from 25% to 2% before the oil was injected into the pipeline. If this plant were not built, future spills would be inevitable because the briny water left in the oil would destroy the pipeline from the inside out, as it had done in the past. • A SCADA system to better manage the pressures and flows and to reduce leakages from the main pipeline with an integrated data sensing, control and telecommunications system. The expected cost was approximately $15 million. Prequalification applications had been called for and submitted; * A pipeline to transport separated water back to the field for reinjection (otherwise this high salt content water had to be put into streams). The Water Separation System [Satisfactory] The Bank had included the completion of a "partially completed" Water Separation Plant (WSP) as a project component of the activities needed to enhance the sustainability of the pipeline. There was no discussion of this component in the technical annex, but the loan documentation included an allocation of $2 million for it. When the proposal was more fully reviewed in 1996, it was estimated that $15 million would be needed: $3-4 million for the actual water knock-out facility, and another $11- $12 million for related pipeline facilities, including storage tanks, utilities, installation facilities. When the bids were reviewed in mid 1997, the only responsive bid was for approximately $25 million. -6- Shortly thereafter, Komineft went through a major change in ownership, and the new management decided that, since a request for a supplemental loan (primarily to install a SCADA control system) was lacking official support from the Russian Government, it would look for other financing for all of the necessary investments, including co-financing (or supplier credits) for the additional $10 million needed for the WSP. However, the Russian financial crisis of August 1998 eliminated the possibility of any additional financing, and the Bank agreed to let Komineft (now Komitek) negotiate a reduced investment program with the bidder for the plant while Komineft took responsibility for most of the work on the subsidiary facilities. The contract was finally approved and signed in June 1999 after Komitek had sold its majority state to Lukoil. There were numerous problems in the implementation of the construction contract, many of which were caused by the complicated arrangements for construction and/or rehabilitation of off-site facilities (such as pipelines and oil storage tanks), which were implemented by Komineft, with on-site plant facilities implemented by the contractor, all of which needed to work as an integrated whole. These problems were further complicated when the sub-contractor expected to manage the installation of the project decided not to participate and the turnkey contractor took over project supervision using its own, less experienced staff. The Bank considered this WSP so important to the pipeline's long term integrity that it extended the loan closing date twice, from March 30, 1998, to June 30, 2002, a total of more than four years. However, the plant was finally completed and successfully went through technical startup in August, 2002. If the WSP had been built sooner, this component would have been rated as Highly Satisfactory. 4.3 Net Present Value/Economic rate of return: The Memorandum of the President points out that the present value of the economic cost of shutting down the pipeline would be some 15 times the cost of the project, and some five times the cost of the project in the first year alone. In addition, this estimate does not take into account any of the environmental costs of failing to stabilize and clean up the 1994 spill. Crude oil prices have fluctuated greatly in the seven intervening years, from an average of $15-20 per barrel ($105-140 per ton) when the project was appraised down to an average of $10 dollars, and, in the past two year in the $25-30 range. Assuming a $20-25 crude oil price range would yield a benefit/cost ratio of over 20, even before one attempts to measure the benefits from the oil containment and cleanup project components. 4.4 Financial rate of return: The Memorandum of the President estimated the financial rate of return (FRR) to the pipeline company at over 30%, based on the transport price of $3.75 per ton. There is no change in this estimate. However, again, it should be noted that the financial rate of return does not take into account the income generated for the oil producers that would be lost if the pipeline closed. 4.5 Institutional development impact: The institutional development impact has been substantial. Lukoil has brought a region-wide approach to the company's operating and environmental issues. When it took majority ownership of Komineft, it commissioned a full-scale environmental appraisal of the entire area. Upon completion of the study, Lukoil announced that it would take on full responsibility for the liquidation of the results of the oil spill and started to develop a program of clean up and rehabilitation. In September 2000, the authorities of the Komi Republic and Lukoil approved Komitek/Komineft's "Corporate Program on Rehabilitation of Polluted Territories and Prevention of Oil Spills for 2000-2005'. The Bank environmental specialists who reviewed this program were impressed by the depth and scope of the works planned by Lukoil. Komineft has taken effective action to keep the implementation of this plan on track. 5. Major Factors Affecting Implementation and Outcome 5. 1 Factors outside the control of government or implementing agency: The favorable weather conditions in the spring of 1995 greatly contributed to success of the containment efforts. The precipitous fall in the price of oil in 1997 and 1998 greatly reduced the ability of Komineft to provide all the resources needed to carry through it such activities as cleaning up the oil sites, and delayed the construction of the WSP plant. Lastly, the techniques to remove the oil from the schlum and reclaim the soil took longer to - 7 - develop than originally expected because of the harsh conditions. 5.2 Factors generally subject to government control: The Government provided the funds needed to start project implementation in a timely fashion. 5.3 Factors generally subject to implementing agency control: Several changes in ownership and in management of Komineft meant that the program went through several delays as the expenditures for the project program were repeatedly reviewed by successive managements. The project started with Komineft being a publicly owned company, and then it was sold to private interests (bankers) which in turn went through a number of management teams. Finally Komineft was purchased by Lukoil. However, each new management eventually came around to supporting the project's long term goals but always with delays. However, the implementation of the project sped up once Lukoil got involved and became committed to the project. The company increased the annual budgets for cleaning up the polygons and prioritized their environmental problems. It reclaimed and commissioned (accepted by the Republic Commission on Land Acceptance) 42.2 hectares of oil contaminated and damaged land in 2000, and another 33.7 hectares in 2001, at a cost of 32 million rubles and 12 million rubles, in these respective years. It plans to reclaim another 31.7 hectares during 2002-2003. 5.4 Costs andfinancing: The Bank's original cost estimate for its portion of the Project was $99 million and the actual cost turned out to be slightly lower at $98.41 million. The Bank spent $1.25 million for identification, appraisal, and supervision of the Project. Undoubtedly, the supervision costs would have been somewhat lower if the delays in the construction of the oil/water separation plant had not occurred. 6. Sustainability 6.1 Rationale for sustainability rating: Sustainability is highly likely. Komineft is now wholly owned by Lukoil, Russia's largest oil producer. The new company, Lukoil-Komi, has been implementing its own, self-financed regional environmental plan "Program for Rehabilitation of Contaminated Areas". Over the past two years (2000 and 2001) all annual program targets have been met or exceeded, with the exception of sludge processing. Of the 270 hectares of contaminated land identified as sites of the 1994 oil spill, there now remains (as of the first of 2002) only 33 hectares of unreclaimed oil contaminated land. Lukoil plans to reclaim it by the end of 2003. The 2002 Rehabilitation Program targets call for the construction of two sludge processing unit with a capacity of 10,000 cubic meters each. If the expected processing rates can be achieved, the 40,000 cubic meters of sludge still stored in the containment polygons can be expected to be closed before the Spring thaw of 2004. Lukoil is implementing an annual program of preventative pipeline maintenance and repairs. To ensure that this program provides effective results, every three years they will run a corrosion detection tool through the system (to identify any weak spots needing repair). The Bank loan financed the last one in late 2000, and Lukoil-Komi followed up by completing all identified repairs in 2001. There is every indication that they intend to continue to maintain this pipeline in top condition, since any interruption of its operation could have an immediate impact on its oil sales and profitability. 6.2 Transition arrangement to regular operations: Lukoil has been operating the pipelne successfully since 1999. They have demonstrated a strong commitment to avoiding any more spills and protecting the environment, and they have the resources to backup this commitment. 7. Bank and Borrower Performance Bank 7. 1 Lending: The Bank did an excellent job in making the Government and the Production Association acutely aware of the - 8- magnitude of the potential environmental disaster, and in identifying a program to overcome the problem and avoid a national disaster. Without the personal pressure from the President of the Bank this environmental problem would most likely have remained a relatively low priority in the Russian political conscience, to be handled with its limited domestic resources and management capabilities. The Bank accepted the challenge created by the need for extremely rapid deployment, and was willing to adjust its procurement rules and approve a large sole source contract to meet the challenging situation, and to insist on a significant initial Government contribution as a show of its commitment. The loan was appraised and approved in record time. 7.2 Supervision: Supervision was satisfactory. It was highly satisfactory in all technical aspects, where its fast action and strong support were a major factor in assuring that almost none of the spilled oil leaked into the Pichora estuary system. It also showed a great deal of flexibility in supporting the project's objectives within the context of a situation where the executing agency was greatly pressed for funds, and in continuing to support the implementing agency and extending the closing date, to ensure completion of the water treatment plant, which was essential for long term sustainability of the entire pipeline system. The most difficult activity to supervise was the implementation of the Social Mitigation Program because of the resentment of the villagers. However, even here, the Bank's efforts was satisfactory. 7.3 Overall Bank performance: The Bank's overall performance is judged satisfactory. Borrower 7.4 Preparation: The Government's performance was highly satisfactory after it decided that implementation was of national priority. It provided the initial funds to get implementation going before the spring floods of 1995. 7.5 Government implementation performance: The Government's performance was satisfactory. It supported the project from start to finish. However, it never forgot its fiduciary obligations in requiring that its sub-loan get repaid on schedule and actually stopped disbursements when the private owner of Komineft got behind in its payments in 1998/99. This problem was removed in 1999 when the Government negotiated a settlement with Lukoil. 7.6 Implementing Agency: The performance of the implementing agency has been satisfactory. Komineft was interested primarily in meeting the technical requirements for avoiding having large quantities of oil spill into the Pichora estuary and in obtaining immediate pipeline repairs. It was less interested in longer term social and environmental matters. Komineft went through several changes in management and ownership during the course of project implementation, as well as some very difficult financial times when oil prices fell dramatically in 1997-1998. During these periods its support of project implementation varied greatly, but it did succeed in meeting all its agreed targets albeit with considerable delays. The oilfield's new owner, Lukoil, has strongly supported the project's objectives. It has taken the lessons to heart and has upgraded the environmental departments in its other oil production companies and has adjusted its internal safety and environmental procedures company wide, so as to avoid the risk of repetition of such spills in its other operations. 7.7 Overall Borrower performance: Overall borrower performance is satisfactory. 8. Lessons Learned * Emergency lending requires a clear assessment of the essential elements for successful implementation, and demonstrated govemment commitment to these elements. In this project, the Govemment agreed to hire an experienced intemational contractor using sole source negotiations and to provide $12 million to initiate the -9- contractor's work. On the Bank's part, emergency lending requires (i) intensive implementation supervision to keep project on track; (ii) a willingness to take risks where the prospects for success are uncertain; and (iii) a continuity of project management, especially from the field office. o It is worthwhile to extend the closing date of an emergency project when the purpose is to complete project components that will greatly enhance the sustainability of project benefits. In this case, extending project completion to ensure that the water separation unit was completed was essential for achieving sustainability of the long-term integrity of the oil pipeline. * Surveys of the concems and wishes of negatively affected groups increase the expectations of survey participants that their concerns will be addressed and resolved. To keep expectation to a level with project funding capabilities, it is important for the PIU to help communities establish clear social program priorities and to ensure that they remain them well informed about the level of funds available and the proposed usages of these funds. The PIU needs to maintain regular and timely communications with the affected population, about where the available funds are being spent, including details on causes of implementation problems and delays. e Emergency projects should, to the extent feasible, take into consideration the historical context of the problem. In this case, the project focused primarily on the urgent action needed to avoid an immediate major deleterious environmental impact of an oil spill on a vulnerable Arctic ecosystem, and secondarily on ameliorating the immediate damage done to local populations. There was only minimum attention paid to the extensive harm that the previous oil spill had done to local communities. The local population, however, viewed the most recent damage to their ecosystem in the context of a long history of environmental assaults. A return to the unsatisfactory status quo just prior to the most recent environmental assault left a residue of grievances of justice unfulfilled. To minimize this kind of a problem in the future, the Bank might wish to include a project component directed at ameliorating preexisting problems. * If Loan funds are provided to organizations that are candidates for restructuring, frequent management or ownership changes (including privatization), are likely to cause delays in project implementation. The Bank needs to consider ways for the loan's legal documentation to include agreements on ways that the Bank and the Government would respond to such events. 9. Partner Comments (a) Borrower/implementing agency: Emergency Oil Spill Recovery and Mitigation Project in the Republic of Komi Emergency IBRD and EBRD Loan No. 3872-RU Project Description and Main Results of its Implementation An emergency oil spill from the Kharyaga-Usinsk pipeline at the end of 1994 - early 1995 resulted in a large-scale environmental disaster in the Republic of Komi. In January 1995 it became clear that it was impossible to deal with the disaster using own resources. The RF Government requested the World Bank to provide an Emergency Loan to eliminate the impact of the emergency oil spill from the pipeline. The World Bank agreed to provide assistance to Russia through an emergency loan. The EBRD also agreed to participate in the financing. The relevance of the project was stipulated by the developed grave situation and a potential possibility of an environmental disaster as well as a need to continue oil production in the Republic of Komi. - 10 - The Komi Emergency Oil Spill Recovery and Mitigation Loan in the overall amount of $124 MM was provided to the Government of the Russian Federation in March 1995. The IBRD and the EBRD parts are $99 MM and $25 MM, correspondingly. The BRD loan was extended several times to complete the Project. As a result of the last and final Loan extension, the Loan Closing Date is June 30, 2002. The EBRD loan closed on December 31, 1999. The following major areas are covered by the Projects: * Oil spill containment and clean-up work in the oil contaminated lands; * Works to replace the most damaged middle section of the Kharyaga-Usinsk oil pipeline; * Engineering and technical inspection work in the Kharyaga-Usinsk pipeline; * Environmental monitoring of the oil contaminated lands and water reservoirs; * Provision of consultants' services on the Project management and procurement; * Implementation of the social assistance program in the communities affected by the oil spill; * Procurement of equipment under the Project implementation. Financingfrom the IBRD loan proceeds I . Oil Spill Containment and Clean-up Work in the Oil Contaminated Lands As a loan condition, the Bank made a requirement that an international contractor capable of managing clean-up activities in oil contaminated lands and containment of oil spills be hired. Intemational competitive bids to select a General Contractor were conducted; the contract was awarded to an Australian-American joint venture AES/Hartek. The contract with the joint stock company Komineft was signed in March 1995. Under the contract totaling $50 MM (the IBRD part of financing is $41 MM), the General Contractor managed this Project component, its specialists conducted assessment of each spill site and identified measures that were to be undertaken to contain the oil spill sites as well as determined a range of oil removal equipment, which was appropriate for oil collection. The work in the oil contaminated lands was carried out using local Russian contractors both through subcontracts with the General Contractor and through direct contracts. The main task was to prevent oil releases to the Pechora River. As a result of activities carried out in 1995-1996, a large scale spread of the oil spill from the existing oil spill sites was prevented, a significant part of the oily sludge was buried in temporary polygons, and the recovered oil was injected back into the pipeline. The contract was completed and payments under the contract were made in full amount. 2. Work to Replace the Middle Section of the Kharyaga-Usinsk Pipeline A preliminary analysis of the oil pipeline demonstrated that intemal corrosion was the main reason of its unsatisfactory operating conditions. A lack of adequate preventive repair and maintenance work as well as low quality of construction in some cases also impacted the pipeline operating conditions. The original pipeline design did not provide for use of good quality insulating lining, it did not envision use of the cathodic protection system, while the quality of welded connections on the pipeline often left much to be desired. A shortage of funds for capital construction and maintenance work on the oil pipeline did not allow the company to commission a water removal separation plant on time and use inhibitor additives in transported oil with a view of reducing intemal corrosion of the pipeline. The contract for rehabilitation works on the Kharyaga-Usinsk pipeline, which is 146 km long, in the amount of $29.5 MM (the part of the IBRD financing is $24 MM), was signed with the joint stock company Poisk (Russia) in March 1995. As a result of the work carried out in 1995-1996, 64.2 km of pipelines, 530", were replaced in the most damaged middle section of the Kharyaga-Usinsk pipeline. The contract was completed and - 11 - payments under the contract were made in full amount. 3. Engineering and Technical Inspection Work in the Pipeline. Consultants' services on inspection and engineering of the pipeline were provided by ILF Consulting Engineers (Germany) that has experience in carrying out such studies and that was selected based on the results of the international competitive bidding. The contract was signed in February 1996, its total amount was $5,968,383, taking into account the Amendments. Main objectives of the work under this Project component included: * Assessment of the pipeline integrity and development of a technical solution to improve it; * Assessment of the pipeline failure-free operation period (remaining service life); e Assessment of the operating environment and development of a technical solution to improve it; * Development of measures to mitigate against potential emergency oil spills with a view of reducing their impact on the environment; * Preparation of recommendations for developing a pipeline temporary leak detection system; * Risk assessment of the Kharyaga oil field pipeline system; * Preparation and conduction of the first stage of the CDP-run in the Kharyaga-Usinsk pipeline by specialists of the subcontractor specialized company (Rosen Engineering, Germany); * Implementation of supervision Over the CDP-run in the Kharyaga-Usinsk pipeline; * Implementation of supervision over top prionty repair works on the Kharyaga-Usinsk pipeline based on the results of the CDP-run conducted. o All works under the contract were completed and all payments under this contract were made in full amount. 4. Environmental Monitoring The main task of environmental monitoring was to ensure public health and preserve priority natural resources, by using, among other things, renewable natural resources. The Environmental Monitoring Program included monitoring of the air after buming off the oil spill, monitoring of surface and underground water reservoirs, monitoring of drinking water sources in villages, study of the oil spill impact on vegetation, wildlife, including domesticated animals, and organisms inhabiting rivers and reservoirs. As a result of the intemational competitive bids conducted in January 1997, a contract in the amount of $1.7 MM was signed with the company Brown and Root (Great Britain) to carry out overall environmental monitoring of soil, water resources, vegetation, cattle and poultry (General Contractor). Additionally, 13 contracts were signed with Russian subconsultants in the total amount of around $ 1 MM to carry out scientific and research works in the Usinsk region in the following areas: * Quality analysis of tissue of local fish populations and study ofhydrobiota and bed sediments in polluted water reservoirs; * Quality study of hay and milk in villages Kolva, Ust-Usa, Ust-Tsilma and Brykalansk; e Veterinary studies of cattle and poultry in villages Kolva, Ust-Usa, Ust-Tsilma and Brykalansk; o Extemal monitoring of quality; * Determination of the oil spill impact on fauna; * Study of vegetation conditions in villages Kolva, Ust-Usa, Ust-Tsilma and Brykalansk; * Study of agricultural lands conditions in villages Kolva, Ust-Usa, Ust-Tsilma and Brykalansk; * Quality monitoring of water from the Kolva River (from the Kharyaga oil field as far as the estuary) and streams affected by the oil spill; * Monitoring of drinkmg water and study of surface water from local rivers and water reservoirs around villages Kolva, Ust-Usa, Ust-Tsilma and Brykalansk; * Monitoring of vegetation on'the agricultural lands along the Kolva, the Usa and the Pechora nvers and around villages Kolva, Ust-Usa, Ust-Tsilma and Brykalansk; * Monitoring offish stocks in the Kolva, the Usa and the Pechora rivers; - 12 - * Drilling wells and bore pits to take samples from selected sites in the Usinsk region; * Collection and restoration of existing environmental data. Activities of all contracts under the environmental monitoring were fully completed and all payments under the contracts were made. Based on the results of the studies carried out in the Usinsk region in all aforesaid areas, Brown and Roots, General Contractor on environmental monitoring, prepared a comprehensive report on the environmental situation in the oil spill area. The report was reviewed and approved by the Customer and forwarded to the IBRD. 5. Consultants'Services on Project Management! Procurement. Under the said contract the Consultant provided the Customer the following consulting services: * Determination of procurement methods under the Project; * Preparation of the Project implementation plan and its periodic update; * Preparation and conduction of international and national competitive bids under the Project to procure equipment, services and works in accordance with the IBRD/EBRD rules and procedures, including: * preparation offender documentation; * preparation and publication of Procurement Notices in mass media; * Tender opening; * evacuation of submitted bids and preparation of evaluation reports for the IBRD with contract award recommendations; * preparation of relevant contracts and getting no-objection from the IBRD; * conduction of pre-contract negotiations with the winner and supervision over implementation of the contracts signed; * Coordination of the Customer's actions with the IBRD/EBRD and other international financial organizations; * Getting of no-objection from the IBRD/EBRD on all major stages of the competitive tender; * Submission of regular project implementation reports related to procurement to the Customer; * Assistance to the Customer in preparation of reporting materials on the Project implementation performance for submission to governmental agencies supervising the Project; * Participation in IBRD supervision missions on the project; * Training of the Customer's staff in procurement and disbursement procedures under the Project implementation; Assistance to the Customer in resolution of all kinds of differences that arise during the Project implementation. All contracts with the Consultant for provision of the aforesaid consultants' services were completed and payments under the contracts were made. 6. Social Assistance Program Under the program implementation 12 contracts in the total amount of $4 MM (the part of the IBRD is $3.2 MM) were concluded and fulfilled, including: * contract for procurement of concentrated fodder; * contract for procurement of land improvement machinery; * contract for procurement of breeding young stock; * contract for arranging summer vacations at health rehabilitation centers for children (for 150 children in summer of 1995, and for 225 children in summer of 1997); * contract for procurement of food for children under 2 years; * contract for procurement of equipment for the laboratory of veterinary and sanitary expertise; * contract for procurement of equipment for the environmental control laboratory; * contract for procurement of equipment for the health rehabilitation center; - 13 - * contract for drilling water wells; * contract for construction of water conduits; * contract for construction of a kindergarten in the village Kolva; * contract for construction of'a schoolhouse in the village Mutny Materik. The Program is practically fulfilled, except for the uncompleted contract amounting to $600,000 in total for construction of a schoolhouse in the village Mutny Materik. The construction company disbursed around $450,000, the remaining work was financed using Komineft own funds. 7. Procurement of Equipment and Specialized Works under the Project. The decision of the Russian Government and the World Bank relating to procurement of a transported oil de-watering plant and stopple equipment used on operating pipelines, which are the most efficient means of achieving a failure-free operation of pipelines on the basis of advanced modem technologies, predetermined selection of types of equipment to be procured. * Contracts for construction and installation of KTS (water removal separation: Based on international competitive bids conducted in May 1999, contracts were signed with Nippon Steel (Japan) and Nippon Steel Energy Projects Russia (Ireland), their total amount was $16.3 MM. The duration of the contract was 18 months. Due to a number of objective reasons, both contracts became effective in November 2000. KTS was procured and installed so that it would be possible to use this plant to separate reservoir water from oil and to inject de-watered oil back into the pipeline. Due to oil de-watering, its corrosive characteristics drastically reduce, which has a positive effect on the integrity of the pipeline systems, increasing their duration and significantly reducing risk of pipeline failures due to corrosion. The use of such a plant fully meets objectives and tasks of the Project as well as environmental interests of the North-West Region of Russia. Therefore, the implementation of these two contracts became one of major thrusts of the Project as a whole. The plant will be commissioned in June 2002 after pre-commissioning. All works under both contracts will be hence completed to full extent. * Contractfor supply of equipment to seal and replace damaged sections of existing. pipelines (Stopple equipment): As a result of the intemational competitive bids conducted in June 1999, a contract in the amount of$l MM was signed with the company T.D. Williamson (Belgium). The aim of this equipment procurement is as follows. When it is used to replace damaged sections of the pipeline, there is no need to shut down the whole pipeline system, which is highly inappropriate from the economic point of view and brings about significant financial losses. This equipment was supplied in September 2000. Under the contract, the Supplier carried out training of the Customer's technical staff and conducted tests in the pipeline to replace damaged sections without stopping oil transportation. The contract was completed, alArelevant payments were made. e Contract for work to have a re-run of the corrosion detection pig in section 2 of the Kharyaga- Usinsk pipeline. In November-December 1996, under the contract for consulting services on engineering and inspection works in the pipeline signed with the ILF Consulting Engineers (Germany), the first run of the corrosion detection pig in section 2 of the Kharyaga-Usinsk pipeline was conducted. Based on the results of the CDP-run, repairs were carried out in this section of the pipeline. Three years later there arose a need to have a re-run of the corrosion detection pig in section 2 to obtain data on changes over time related to corrosive processes inside the pipeline and to compare results of two CDP rnms. Based on the results of the competitive tenders conducted in April 2000, a contract was signed with Rosen Engineering (Germany) to have a re-run of the corrosion detection pig in section 2 of the Kharyaga-Usinsk pipeline. The work under the contract was completed in December 2000, and all relevant payments were made in full amount. A report was prepared based on the results of the second CDP-rnm. The report was accepted by the Customer and forwarded to the IBRD. The total amount of contract related payments under the Project from the IBRD financed part is $98,220,000 -14 - Financingfrom the EBRD loan proceeds 1. Oil spill containment and clean-up activities - $9.1 MM (counterpart financing). 2. Work to replace a pipeline section - $5.5 MM (counterpart financing). 3. Social program - $800,000 (counterpart financing). 4. Commitment fee -$316,000. 5. Consultants' services under the Project Agreement with the EBRD. Based on the results of international competitive bids, a contract for consultants' services was signed with SGS (Switzerland) to conduct supervision over implementation of the aforesaid contracts signed with the AES/Hartek (USA/Australia) and the company Poisk (Russia) that included verification of the scope of work performed, its quality as well as the fiscal discipline. The amount of the contract is $1.7 MM. The contract was fully implemented and all relevant payments were made. The total amount of contract related payments under the Project from the EBRD financed part is $17.5 MM. (b) Cofinanciers: Nil (c) Other partners (NGOs/private sector): Nil 10. Additional Information -15 - Annex 1. Key Performance Indicators/Log Frame Matrix Outcome / Impact Indicators: - 'lndicater/Matrix,, - PrJI to pi,-ioteiEnst PSR AcuaULe',A*teEstImatoe:I 1 Containment of the oil spill to minimeze Highly Satisfactory, Relatively little oil was potential release of 100,000 tons of oil into spilled the Pechora river system during the 1995 spring runoff and removal of gross oil concentrabons to safe storage areas for eventual disposal. 2 Delivery of an emergency social support SaUsfactory, Medicine and food were program for affected downstream delivered; new water wells were drilled; and communities including: children's medicine some livestock was replaced. Pasture and food; dnlling of new water wells; animal rehabilitation equipment was not provided feed and replacement livestock and pasture rehabilitation equipment 3. Reduction and minimizabon of the risk of Highly Satisfactory. The risk of future spills further spills from the existing pipeline has been minimized through the through completion of replacement of the repair/replacement program for the complete middle secton of the pipeline by end-1995 pipeline and the looping of Section 1 of the and installabon of improved pipeline pipeline with a new line. equipment and operating procedures. Output Indicators: 'lindlcattib/ i , ' - ' ; AtitestEsimate- Si Higher environmental awareness and Lukoil, as the current owner of Komineft, has Sustainable: The way Komineft now responsibility of the oil producer/pipeline been self-financing and implementing a five implements the program indicates that it operator, including regular environmental year corporate 'Program for Rehabilitaton of treats environmental concems seriously. The monitoring and mitigaton of past Contaminated Areas' since 2000. Over the company has laid out a comprehensive environmental impact. past two years, all annual program targets program and met its targets. These includes were met and/or exceeded except sludge targets related to the subject oil spill, i.e. processing. complete rehabilitation of polluted and affected lands by end-2003; closure of sludge polygons - by end-2003. The next ecological monitoring of the 1994 oil spill Introduction of the intemabonally accepted The WSP commissioning and start-up Sustainable: practices of safe pipeline operabons and schedule was aimed at the technical start-up § the dewatering plant (WSP) was preventve maintenance. by July 1, 2002. commissioned in August 2002; § The end-borrower annually clarifies and Komineft is implementing an annual program implements preventive pipeline repair of preventive pipeline repairs and program(s); maintenance. In 2001, all planned repairs, § The end-borrower plans to use special including stopple application were instruments to check the status of the completed. This has allowed the company to pipeline every three years; start using the stopple for tie4rnnetwork § Specialist [stopple] repair team is being expansion acvities rather than for urgent increasingly involved in be-ins rather than repairs. urgent repairs; Komineft is building a new pipeline along the original one (which will become a back-up pipeline) to accommodate expected increase in oil production. End of project -16 - Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) " 6 < > :r 1, l-C; 0 ' . ' App~raisal ActuallLatest Percentage of Estimate Estimate Appraisal Project Cost By Component. US$ million US$ million . Management of contaimnent and clean up activities 36.00 31.17 0.87 Pipeline replacement 12.80 19.45 1.52 Pipeline remediation 16.70 13.82 0.83 Goods 5.30 4.60 0.87 Consultants' services 9.10 13.15 1.44 Social expenditures 1.60 2.82 1.76 Unallocated 17.50 13.40 0.76 Total Baseline Cost 99.00 98.41 Total Project Costs 99.00 98.41 1 Total Financing Required 99.00 98.41 Project Costs by Procureme nt Arrangements (ActuallLatest Estimate) (US$ million equival nt) Procurement Method' Expenditure Category ICBCB B N.B:F. Total Cost _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _C_B_ _ th e r' 1. Works 16.33 0.87 80.80 0.00 98.00 (14.95) (0.00) (68.41) (0.00) (83.36) 2. Goods 1.72 0.00 3.12 0.00 4.85 (1.72) (0.00) (1.86) (0.00) (3.58) 3. Services 0.00 0.00 12.31 0.00 12.31 (0.00) (0.00) (11.46) (0.00) (11.46) 4. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 5. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 6. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 18.05 0.87 96.24 0.00 115.16 (16.67) (0.00) (81.73) (0.00) (98.41) "Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 2'Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. - 17 - Annex 3. Economic Costs and Benefits Not applicable for an emergency rehabilitation project - 18 - Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No.of Persons and Specialty Performance Rating (e.g. 2 Economists, I FMS,, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation February 1995 10 econ, fin, pol, env, proc, mgmt, eng Appraisal/Negotiation March 1995 10 econ, fin, pol, env, proc, mgmt, eng Supervision Jun 1995 6 econ, fin, eng, env, pol, proc HS S Sept 1995 6 econ, fin, eng, env, pol, proc HS S Dec 1995 2 eng, proc. HS S June 1996 2 env, eng HS S Nov 1996 2 env, proc HS S Mar 1997 3 proc env, eng HS S May 1997 4 env, eng, proc, egy Sept 1997 5 proc, eng, egy, econ, env Jan 1998 5 econ, proc, eng, egy, env S S Jun 1998 5 econ, admin, pol, env, eng S S October 1998 3 econ, admin, egy U S Feb 1999 3 econ, env, eng U S Oct 1999 3 econ, eng, egy U S Feb 2000 4 econ, eng, egy, env S S Oct 2000 2 econ, eng. S S June 2001 4 econ, egy, eng, env. S S May 2002 2 econ, egy S S ICR May 2002 2 eng,egy S S (b) Staff: Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) Identification/Preparation Appraisal/Negotiation 352.4 Supervision 896.8 ICR Total 1249.2 - 19 - Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N-Negligible, NA=Not Applicable) Rating LiMacro policies O H OSUOM O N * NA El Sector Policies O H OSUOM O N * NA O Physical * H OSUOM O N O NA O Financial OH OSUOM ON *NA Oi Institutional Development 0 H O SU O M 0 N 0 NA L Environmental * H OSUOM O N O NA Social LI Poverty Reduction O H O SU S M O N O NA O Gender O H OSUOM O N * NA L Other (Please specify) O H OSUOM O N O NA Li Private sector development 0 H O SU O M 0 N * NA L Public sector management 0 H O SU O M 0 N * NA O Other (Please specify) O H OSUOM O N O NA -20 - Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bankperformance Rating El Lending *HSOS OU OHU El Supervision OHS OS O U O HU O Overall OHS OS O U O HU 6.2 Borrowerperformance Rating O Preparation * HS OS O U O HU El Government implementation performance O HS OS 0 U 0 HU O Implementation agency performance OHS OS O U O HU El Overall OHS OS OU O HU - 21 - Annex 7. List of Supporting Documents * Field Report Usinsk Oil Spill Initial Action Assessment by Agra Earth * Environmental Ltd, Calgary, Canada, March 1995 o Kolva Basin Oil Spill Recovery & Mitigation Project 1995 Project Report in 8 volumes: Overview; six Site Reports; and an Environment Report by Australian Emergency Services/Hartec Management Consultants, Nicosia, Cyprus * Pipeline Integrity Assessment Kharyaga to Usinsk Pipeline, by AGRA April 1995 e Komi Emergency Oil Spill Recovery and Mitigation Project Environmental Studies, Final Report, 2001 Brown and Root - 22 -