IFC requires that this document is made available through the World Bank InfoShop and to the locally affected community no less than 30 days prior to project consideration by the IFC Board of Directors. The Summary of Project Information (SPI) also provides details of where the ERS has been made available to the locally affected community. The SPI must be sent to World Bank InfoShop no less than 30 days prior to project consideration by the IFC Board of Directors.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review consisted of appraising technical, environmental, and social information provided by ICA and field visits by IFC staff to the existing roadway. Environmental and social issues associated with this project include: - Environmental, health and safety management systems; - Land use and licensing; - Construction impacts; - Road safety; and - Land acquisition for right-of-way.

ICA has presented plans to address these issues to ensure that the project complies with applicable Mexican laws and regulations administered by the Secretaria de Medio Ambiente y Recursos Naturales (SEMARNAT), the Comision Nacional del Agua, and the Instituto Nacional de Antropologia e Historia, as well as the World Bank Group environmental and social policies. The detail about how these issues are addressed by ICA and other responsible parties is summarized in the paragraphs that follow. Environmental, Health and Safety Management Systems ICA has in place a corporate-wide Environmental Management System (EMS) structured according to ISO 14001, the international EMS standard, and the Company is applying the policies and procedures therein to the planning, design, construction and operation of the Irapuato – La Piedad Road project. Environmental impacts have been identified and are valued in terms of significance. Legal and other requirements have also been identified at the federal, state, and municipal level and are appropriately tracked. A Plan of Action has been developed that incorporates the environmental objectives necessary to fulfill these requirements. This Plan includes the applicable written procedures that are to be followed, as well as emergency preparedness and response activities. Reporting directly to the ICA Project Manager, an independent Environmental, Health and Safety (EHS) Manager has been assigned to the project, and is responsible for assuring the Plan is implemented. The EHS Manager regularly monitors and inspects performance of specific actions and fulfillment of objectives, measuring selected environmental parameters where appropriate. Non-compliances will be addressed through a corrective and preventative action process. Internal audits are also carried out. Land Use and Licensing Involving the rehabilitation and expansion of an existing roadway, the project is located in the center of Mexico in the State of Guanajuato, northwest of Mexico City. Passing through predominantly agricultural and some scattered industrial areas, the towns of Abasolo and Penjamo (populations of 25,400 and 35,400 inhabitants, respectively) are connected by the road. There are no protected natural or ecologically sensitive areas in the vicinity, nor are there any cultural sites or archeological monuments. Owing to the existing roadway and the limited nature of the rehabilitation and expansion, SEMARNAT does not require a full Environmental Impact Assessment for the project. The document reflecting this resolution was issued by SEMARNAT in August 2002. ICA will obtain the applicable and relevant environmental licenses from the Guanajuato state environmental authorities for the siting of and emissions from the temporary concrete and asphalt plants to be established to support the construction activity. No new borrow pits or quarries will be developed – materials will be obtained from established, licensed operations owned and operated by others. Closure plans for concrete and asphalt plants will be in compliance with government environmental requirements. Construction Impacts The principal environmental impacts from construction of the roadway – emissions from concrete and asphalt plants, fugitive dusts, soil erosion, noise, hazardous materials and waste management – will be controlled to acceptable levels by ICA through application of standard construction environmental controls consistent with the Company’s EMS and IFC Environmental, Health and Safety Guidelines. Storage and impoundment areas for fuels, solvents, and other hazardous materials will be designed with secondary containment to prevent accidental releases from reaching soils, groundwater and surface water. Non-hazardous solid wastes generated during construction will be collected and appropriately disposed at licensed municipal landfills. Any hazardous wastes generated at maintenance workshops will be segregated and recycled or disposed (treated, incinerated, or landfilled) by a SEMARNAT-authorized, licensed contractor. Road Safety Although they have been falling for the last several years, accident rates along the existing roadway still remain significant. As a condition of the concession agreement, ICA is coordinating with the SCT and other government agencies responsible for road safety in the design and construction of the roadway. Key features being implemented going forward include: - Provision of pedestrian crossing areas; - Establishment of procedures for the transport and handling of hazardous materials; and - Implementation of an emergency response program for spills, fires, and major accidents, including emergency equipment and trained personnel, and test critical components of the program on a regular basis. Land Acquisition for Right-of-Way Along the length of the roadway additional right-of-way may need to be acquired to accommodate the expansion in certain segments and for overpasses. Under the concession agreement SCT has the responsibility for acquiring this additional land. The agreement further stipulates that the Company is to provide to SCT the documents that identify the necessary parcels. SCT then submits these identified parcels to the Institute for the Appraisal of National Assets who establishes a fair market value for the land and any related assets. These prices form the basis of the compensation offered to the land owners, which is consistent with World Bank Group policy on involuntary resettlement. It is important to note that there are no areas along roadway where encroachment of irregular structures has taken place within the legally mandated right-of-way. All right-of-way acquisition and related compensation involves transactions with the legal owners of the land.

This ERS contains IFC's summary of its environmental and social review of the project. Additional environmental documentation prepared by ICA may be obtained directly from the following contact person: Ing. Gabriel de la Concha Guerrero Ingenieros Civiles Asociados, S.A. de C.V. Mineria No. 145, Col. Escandon 11800 Mexico DF Fax: 5227-5065

Accordingly, IFC concludes that the proposed project will meet the applicable World Bank/IFC environment and social policies and the environmental, health and safety guidelines upon successful implementation of the agreed mitigation measures.

IFC will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project covering: - the status of implementation of any mitigation measures; and - ongoing performance of project-specific environmental, health and safety activities as reflected in the results of periodic and quantitative sampling and measuring programs. Periodic site supervision visits will also be conducted.