risk assessment and risk management plan - … · 2016-10-17 · risk assessment and risk...

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Page 1: RISK ASSESSMENT AND RISK MANAGEMENT PLAN - … · 2016-10-17 · RISK ASSESSMENT AND RISK MANAGEMENT PLAN Risk Description ... material properties is the foundation for the design

Qinghai Haidong Urban-Rural Eco Development Project (RRP PRC 48102-02)

RISK ASSESSMENT AND RISK MANAGEMENT PLAN

Risk Description Risk

Assessment Mitigation Measures or Risk Management Plan

Financial Management

Financial risks exist because of a lack of clear direction on a water tariff-setting mechanism for rural areas and water tariff adjustments for urban areas, which limits financial sustainability and strains the budget.

Medium

HPMO will hold bilateral discussions with ADB (supported by loan implementation consultants) to review the tariff structure and identify a strategy to recommend a tariff-setting mechanism that enables better recovery of investments and operating and maintenance costs. A general covenant in this regard is added to the project agreement.

Procurement

Low procurement capacity and lack of experience in administering ADB-funded projects.

High

The PPTA consultants provided training in procurement, financial management, and resettlement and environmental management to the HPMO and implementing agencies. HMG has agreed to provide sufficient staff for the HPMO, who can be trained by a start-up procurement specialist prior to loan effectiveness and engagement of implementation consultants (including procurement specialist).

Governance

Poor governance and corruption reduce project impacts.

Medium

ADB’s Anticorruption Policy (1998, as amended to date) has been explained to the HPMO and implementing agencies. Assurances for governance and anticorruption efforts are included in the project agreement. Following ADB’s governance and anticorruption policies and the Second Governance and Anticorruption Action Plan, HMG and the implementing agencies will mitigate governance and corruption risk by improving financial management, strengthening procurement systems, and combating corruption through preventive enforcement and investigative measures.

Other

Lack of project coordination or synchronization between implementing agencies.

High

A project leading group chaired by the vice mayor was set up to provide leadership and resolve any problems. The HPMO will provide the required coordination with support from the project implementation consultant.

The design flood estimates undertaken during the FSR are not correct.

Medium The design hydrology undertaken for the FSR was checked based on the available data from LDI. To mitigate this risk, the design hydrology shall be peer-reviewed during the DED for construction. To do this, all relevant raw hydrological data, as well as climate projections, shall be provided to the peer reviewer before proceeding with the DED. This will ensure that the flood design data used to design and construct the project is correct and therefore will minimize the risk of underestimation of the design data.

The data for soil and material properties is the foundation for the design of resilient flood protection infrastructure for the project. Poor availability of this data will lead to unsafe design of the structures.

Medium To mitigate this risk, further field geotechnical investigations shall be undertaken during the next stage of the project (DED) in the project area.

The flood model provided in the FSR is to a feasibility level, so increasing the accuracy of the model may lead to additional land requirements for the implementation of the project.

Medium More accurate flood modeling work during the DED phase of the project will mitigate this risk. The outcomes of this model will then be used for the design of the proposed flood and river bank protection works. If additional land resumption is required as a result of this accurate modeling, it will be mitigated by implementing measures laid out in the resettlement plan.

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Risk Description Risk

Assessment Mitigation Measures or Risk Management Plan

Community landholders do not want their land to be affected by river construction works, posing a subsequent risk of stopping the construction works.

Low Affected communities will be consulted and educated during initial environmental examination and preparation of the resettlement plan. Similarly, during the resettlement assessment, the areas most affected by project construction will be identified and potential risk mitigation options provided.

The probability of the flood protection levees to be overtopped by larger flood events than the design standards account for is high. This will affect the river greenbelt and wetlands.

Medium A comprehensive O&M procedure will be formulated, including any clean-up procedures in the event of major flooding of the greenbelt and wetlands.

As flood protection will follow the 20- and 30-year flood immunity standards, the probability of higher flood events overtopping the levee banks is high. The risk is that the water trapped behind the levees cannot be evacuated quickly, creating nuisance and health hazards for the communities living in the affected areas.

Medium This risk will be mitigated by providing low-level gated outlet structures along the areas where this can possibly happen. In areas where the river’s water level is higher than that of the levee’s ponded water, pumping stations shall be provided to pump the ponded water back into the river. The O&M manual will include step-by-step procedures to manage this type of events and minimize the risk of having ponded water behind the levees.

Poor O&M practices continue at the Ledu sanitary landfill, with negative environmental impacts.

High Standard operating procedures will be prepared and followed during implementation. Extensive training of O&M staff will be conducted and regular monitoring of site conditions will be required.

Leachate treatment plant is not operating because technical skills or O&M funds are lacking.

Medium The project team will ensure that operating staff has adequate training and skills for operating a leachate treatment plant; conduct regular monitoring (sampling and lab analysis) for effluent, including all regulatory parameters; and ensure sufficient O&M budget.

Groundwater monitoring is not being conducted.

Medium A minimum of five groundwater-monitoring wells to be installed, extending to a depth reaching the upper aquifer, as required by regulation in the PRC. Conduct of regular sampling at a frequency consistent with PRC requirements, or international best practices where PRC requirements are inadequate. Maintenance of good records on groundwater sampling conducted by an accredited laboratory.

The proposed project scope calls for the leachate collection system’s new cells nos. 3 and 4 to be connected to the old cells nos. 1 and 2. If the baseliner in nos. 1 and 2 has been damaged, leachate leakage through the old cells may increase.

Medium Installation of groundwater-monitoring wells and conduct of groundwater contamination assessment as soon as possible in the spring of 2017, along with a comprehensive sampling and monitoring program. If groundwater contamination is discovered, two choices exist for installing a leachate collection system for the new cells nos. 3 and 4: (i) Separate solid leachate pipe (after exiting from waste deposit

area) to direct leachate from cells nos. 3 and 4 directly to the leachate storage tank.

(ii) Excavate waste from existing cells nos. 1 and 2 (see PPTA SD5), repair baseliner and leachate collection system of the existing cells nos. 1 and 2, prior to connecting with leachate main header from new cells nos. 3 and 4.

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Risk Description Risk

Assessment Mitigation Measures or Risk Management Plan

Water supply for Sanhe and Shihuiyao townships and surrounding villages is not guaranteed in dry and very dry years.

Medium The Ping’an district government and Ping’an District Water Affairs Bureau will ensure that water regulation plans are prepared for the Fatai and Wenzukou reservoirs in accordance with the PRC guidelines for formulation of reservoir regulation rules (SL 706-2015), prioritizing water supply to target communities

Project implementation is slowed by delays in land acquisition and resettlement.

Medium This risk will be mitigated by minimizing land acquisition and resettlement impacts. If impacts cannot be avoided, measures laid out in the resettlement plan will be implemented. A full-time social and resettlement staff member will be assigned to the HPMO for smooth implementation of land acquisition and resettlement. The HPMO will conduct internal monitoring of resettlement plan implementation and report to ADB through quarterly project progress reports. An independent agency acceptable to ADB will conduct external monitoring and evaluation of resettlement plan implementation and report to ADB semiannually during implementation and annually for 2 years after thereafter. ADB, particularly ADB’s social and resettlement development specialist, will closely supervise the implementation of land acquisition and resettlement, conducting missions in a timely manner.

Construction and management of the components is undertaken without regard to the recommended impact mitigation and management measures.

Medium The HPMO and the implementing agencies must implement the project in strict conformity with all PRC laws and regulations on environmental protection, health, labor, occupational safety, ADB’s Safeguard Policy, and the environmental management plan. Assurances in relation to this issue are included in the project administration manual to ensure that the appropriate actions are taken.

Overall Medium

ADB = Asian Development Bank, DED = detailed engineering design, FSR = feasibility study report, HMG = Haidong Municipal Government, HPMO = Haidong project management office, LDI = local design institute, O&M = operation and maintenance, PPTA = project preparatory technical assistance, PRC = People’s Republic of China. Source: Asian Development Bank.