Translated version of this PSD: Turkish
A EUR 27 million senior loan to Hatay Water and Sewerage Administration (HATSU) which currently does not have the capacity to meet the increased demand for services. The loan will be accompanied by an investment grant of EUR 7 million from EBRD Shareholder Special Fund Community Resilience Window (SSF CRW) to finance:
- the replacement of 200 km water supply network in Samandagi District of Hatay,
- the construction of 240 km waste water collection network in Arsuz District of Hatay, and
- procurement of construction supervision engineering works for the two investments mentioned above
Turkey is experiencing significant population growth caused by the refugee influx since the start of the conflict in Syria. Based on recent estimates, some 3 million refugees live in Turkey, placing a huge toll on host communities which are struggling to provide needed services given the dramatic short term population growth. This is particularly true in areas such as Hatay, which are close to the conflict zone.
The refugee influx has strained key municipal services in the areas of water, waste water, urban transport and solid waste operations in Hatay. Although the Turkish government has established refugee camps in Hatay region, the majority of the refugees live in the city centre. The project is part of the EBRD's refugee response and will focus on building resilience.
The project's transition impact is in line with the Municipal Resilience Refugee Response (MR3) Framework, which foresees improvements in the resilience and governance of utility services.
The project fully contributes to the transition objectives of the framework and focuses on the "resilient" quality through an expansion of water and wastewater infrastructure which will lead to an improvement of services. The project also contributes to "well-governed" quality through the commercialisation of HATSU operations by introducing key performance indicators (KPIs) and outsourcing some of the company's non-core activities.
Hatay Water and Sewerage Administration
EBRD Finance Summary
A senior loan of up to EUR 27 million.
Total Project Cost
Environmental and Social Summary
Categorised B (ESP 2014). The Project will result in limited, localised and short-term adverse environmental and social impacts, which can be prevented or mitigated by adhering to good construction practices. The scale and scope of the proposed project components are below the thresholds, hence no Environmental Impact Assessment ("EIA") is required for the project under the national or EU legislation.
The environmental and social due diligence ("ESDD") has been carried out by independent consultants and involved an E&S review of the Company's current E&S management capacity, practices, operations and facilities, and an E&S impact analysis of the proposed project.
The proposed investment is part of the Bank's response to the Syrian refugee crisis in Turkey and aims to help addressing the severe strain being placed on the water services in Hatay, which hosts approximately 500,000 Syrian refugees.
Through the implementation of the project, all PVC and asbestos water supply pipes which have exceeded their economic life will be renewed and water losses will be considerably reduced from current 66 per cent of production to 20 per cent in year 2020. Consequently, energy consumed for pumping water will also be reduced by 40 per cent. Similarly, new wastewater collection pipes replacing the septic tanks will minimise soil and water contamination risks and potential spread of infectious diseases.
In Arsuz District, which has a population of 82,000, currently there is no wastewater collection network and wastewater is discharged to the Mediterranean without any treatment. The Project will enable all the households in Arsuz to be connected to the wastewater collection network, which will be connected to Iskenderun Wastewater Treatment Plan ("WWTP"). The investments under the Project will enable HATSU to provide water and wastewater services in line with national and EU requirements in Samandag and Arsuz districts. According to the reviewed water quality monitoring data, the quality meets the EU and national quality requirements.
HATSU will need to improve its existing occupational health and safety (OHS) management system and develop an environmental management system in line in line with OHSAS 18001 and ISO 14001.
There are asbestos cement pipes in the existing networks. Although the project does not envisage replacement of asbestos pipes, removal of certain parts might still be necessary during construction. Current OHS measures do not address handling of asbestos cement pipes. The procedures for safe handling, removal and disposal of asbestos-containing materials need to be developed and training shall be provided to ensure workers and public are not exposed to asbestos dust. Provision of appropriate PPE to workers will be closely monitored by the HATSU.
HATSU applies a 50% subsidized tariff to households that have been certified as vulnerable by the Social Assistance and Solidarity Foundation. HATSU has distributed a leaflet announcing the 50% tariff reduction for vulnerable households. HATSU will coordinate with relevant authorities to identify and implement additional measures to ensure that piped water supply and wastewater services are affordable to Syrian refugees as well.
HATSU has appropriate human resources procedures in line with national legislation, and has documented and communicated working conditions and terms of employment to their permanent employees and communicated the labour standards (e.g. minimum wage, age limits legal limits for working hours and OHS requirements) to their contractors. However, certain improvements are required including more frequent labour audits of their contractors and core suppliers; improvement of their Employee Grievance Mechanism for non-unionised and sub-contracted workers; and assessment of options for increasing the gender balance among HATSU staff, including contracted personnel. Women employees' career progression to leadership/managerial positions will be a specific area of focus for improvement.
There will not be any involuntary resettlement caused by the proposed Project and no acquisition of private land will be needed. There are no informal users or refugees within the project areas. No known physical cultural heritage sites are affected by the project.
HATSU disseminates information on its operations through a variety of channels including social media, the HATSU website, television, radio, bill boards, posters, which all appear very appropriate. Also HATSU communicates and coordinates with district and quarter leaders in connection with repair and rehabilitation work. HATSU will be required to disclose information on the project and consult with the directly affected communities prior to and during construction works in line with PR 10.
HATSU has a robust grievance mechanism for customer complaints (social media and Hatay Municipality's hotline, which operates 24 hour/day, seven days a week). All complaints are registered and followed up by HATSU's call center. There is, however, a need for improvement of the grievance mechanism to address construction related issues, better coordination between HATSU and the village leaders, and better mechanisms for village leaders to receive complaints/inquiries. HATSU will be required to ensure that grievance mechanisms are also accessible by Syrian refugees.
An Environmental and Social Action Plan ("ESAP") has been developed and agreed with HATSU prior to Board. The ESAP commits the Company amongst others to completing the environmental permit procedures for Samandağ WWTP; operating Iskenderun and Samandag in line with EU requirements; distributing water quality results to the public through their website; implementation of odour prevention measures at the existing WWTPs; developing contractor management plan, defining roles, responsibilities, and authority to monitor and ensure contractors' compliance with environmental, OHS and social/ labour regulations; developing a policy on environmental and OHS in line with ISO 14001 and OHSAS 18001 to be adopted by contractors and sub-contractors; strengthening and formalising labour monitoring; improving hazardous materials management; asbestos management; emergency response planning, conducting consultation meetings with directly affected people; improvement of the grievance mechanism to address construction issues; development of chance find procedure. The Non-Technical Summary and Stakeholder Engagement Plan will be disclosed by the Client in Turkish and Arabic in order to engage the refugee population.
The HATSU's environmental and social performance and implementation of the ESAP will be monitored through annual E&S reports and site visits when deemed necessary.
Company Contact Information
Husna Karayazgan, Head of Waste Water Collection Network Department
HATSU Genel Mudurluk, Mehmet Kafadar Caddesi, No:3, Antakya/Hatay, Turkey 31100
For business opportunities or procurement, contact the client company.
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