10165 - Ramstore II

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Environmental Review Summary

Project Number

10165

Company Name

RAMENKI, OOO

Date ERS Disclosed

Aug 21, 2000

Country

Russian Federation

Region

Europe

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Nov 20, 2000
Signed : Dec 6, 2000
Invested : Apr 3, 2001

Sector

Retail (Including Supermarkets, Grocery Stores, etc.)

Industry

other

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

This project involves the construction and operation of a third hypermarket Ramstore and mall with sales area of 6,910 m2 and a mall lease area of 9,480 m2 plus three neighboring stores. The new Ramstore will be located in Moscow’s Kashirsky district. Ramstore is a retail grocery store, and shopping mall project in Moscow, operated by a joint venture between Migros and Ram of the Koch Group and Entrade and Enka, a construction company, each company being based in Turkey. In October 1998, IFC extended a loan to help finance the construction of 3 “Ramstore” hypermarkets in Moscow. With two hypermarkets complete, the Company has now decided to accelerate construction of the third hypermarket. As a result the Company is seeking a new IFC loan instead of relying on future internal cash generation as originally planned. At the conclusion of the project the Company will own and operate three hypermarkets with integrated malls and five supermarkets in surburban Moscow under the name “Ramstore.”

Environmental and Social

The sponsor has presented plans to address these impacts to ensure that the proposed project will comply with applicable Russian and World Bank Group requirements. The information about how these potential impacts will be addressed by Ramenka is summarized in the paragraphs that follow.

Site Selection, Settings and Land Acquisition. The project site for the new Kashirsky hypermarket/mall is located in suburban Moscow “sleeping communities” on major roads served by public transport. There are about 600,000 people living in the Kashirsky area, mainly in relatively modern high rise buildings. A gas station has opened on an adjacent site since our last visit. The Kashirsky site is 4.6 ha. However, a portion of the site closest to the main road is available only on a 5 year lease with an option to extend for 5 years at the end of each term and will not be utilized for additional surface parking. The site is previously undeveloped and having once been part of an orchard. Ramenka has acquired the land from the City of Moscow. Out of the 4.6 ha, 1.7 will be built (supermarket and mall) and 2.9 will be parking and lawns. According to the Sponsor there is no potential for contamination of the project site from past activities. All necessary permits and approvals to develop the property have been secured. People have not been occupying the site nor was it being used for any purpose. Of the three supermarkets, two have been inspected. They are ground floor structures, one under a high rise blocks and the other one a stand alone structure. They are located in new high-rise communities in the suburbs of Moscow.

Air emissions will be limited to the car traffic in the parking lot and some fugitive sources from the ventilation system. As part of the study for “Preservation of Natural Environment” an air emission study has been conducted for this object. The study focuses on the combined air emission from the number of cars expected to visit the specific shopping mall. The air emission study for the mall in Kashirsky did not foresee any significant local degradation of the ambient air due to these activities.

Water, heating, gas and electricity supply. Potable water will be distributed by the local utility company. The shopping malls will include fast food restaurants. This water will be also used for fire safety and landscape irrigation. Heating will be supplied through city heating network. Electricity will be provided from the grid. A small transformer will be installed on site. A standby diesel is not necessary as a back-up power supply.

Sewage Treatment. Employee- and customer-generated sanitary sewage will be discharged to the municipal sewerage system with permission from the authorities. Stormwater run off will also go to the sewer separately. In accordance with new local environmental regulations the surface run off water shall be treated by a compact plant before discharge. Wastewater from restaurants will pass fat separators before mixing with the remaining domestic wastewater. The mixed wastewater will then be discharged to the Moscow city sewage and the municipal wastewater treatment system for final treatment. A maximum discharge of 80 cubicmeters per day has been foreseen for this new mall.

Solid Waste Management and Hazardous Materials Storage. Most of the waste generated by the store is packaging related material, and will be recycled. No hazardous waste will be generated. Any solid waste that is not recycled will be collected by the local authorities and disposed in a licensed municipal landfill. The company has agreed to develop programs for recycling of containers and waste minimization, as well as to encourage their suppliers to do the same. No hazardous chemicals to be sold. The project will avoid installation of CFC using equipment, as well as avoid the installation of PCB containing electrical equipment.

Fire Protection and Life Safety. Ramenka will comply with the fire protection and life safety systems set forth in the standards that the authorities have approved for the project. Fire protection is provided to the facilities in compliance with insurance company requirements (Allianz, Germany), the Moscow City code and the fire authorities. In the Ramstore and mall stores sprinklers are provided: mall common areas and escape corridors are fitted with smoke detectors and alarms which operate pressurizing fans and smoke exhaust dampers in the roof to keep escape routes free of smoke. Means of escape corridors have 2 hour fire walls and the general area has fire hose points. The smaller neighborhood stores over 1,000 m2 have sprinklers and those under 1,000 m2 have smoke detectors, alarms and fire hoses fresh air pressure and smoke exhaust systems per regulatory requirements. All building systems will be monitored from a dispatcher room.

Employee Health and Safety. A comprehensive safety plan has been prepared for the construction phase per municipal requirements. Ramenka will implement programs to ensure the health and safety of all employees. In addition, all employees will receive work and fire training on a regular basis.

Conclusion & Monitoring

Accordingly, IFC concludes that the proposed project site will meet the applicable World Bank/IFC environmental and social policies and the environmental, health and safety guidelines. IFC will conduct its due diligence on the other four sites and make sure that all applicable World Bank Group and Russian environmental and social policies and guidelines as well as health and safety guidelines are met.

IFC will evaluate the project''s compliance with the applicable environmental and social requirements during the lifetime of the project by:
· Asking Ramenka to provide detailed information to the satisfaction of the IFC to demonstrate that each of the three new supermarket sites will comply with World Bank group requirements;
· Reviewing the annual monitoring reports (AMRs) prepared for the project covering: (i) the status of implementation of any outstanding environmental measures; (ii) ongoing performance of project-specific environmental, health and safety activities as reflected in the results of periodic and quantitative sampling and measuring programs; and
· Conducting periodic site supervision visits of the previous investment as well as this new one, i.e. three hypermarkets/mall, two small supermarkets and three supermarkets.

This Environmental Review Summary (ERS) is prepared and distributed in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Any documentation that is attached to this ERS has been prepared by the project sponsor or in conjunction with the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. The following ERS is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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