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Approved : Aug 15, 2000 Signed : Apr 25, 2001 Invested : Aug 13, 2001
Sector
Resort Hotel (Including Lodges)
Industry
Infrastructure
Department
Gbl Ind, Manufact, Agribus & Services
Project Description
The project involves:
- Refurbishment of the existing 3-star 32 room Machu Picchu Sanctuary Lodge; - Refurbishment of the existing 123-room, 5-star Monasterio Hotel in Cusco; and - Conversion of an adjacent building to the Monasterio Hotel to a 58 suite, 5-star hotel.
The Machu Picchu Sanctuary Lodge is located within the Machu Pichu Historical Sanctuary and adjacent to the Citadel’s entrance.
Environmental and Social
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) provides details of where the ERS has been made available to the locally affected community. The SPI must be sent to 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 of this project consisted of appraising technical and environmental/social information submitted by the project sponsor, as well as a site visit by the Environment Division. The following potential environmental, health and safety, and social impacts of the project were analyzed:
- Impacts on cultural heritage; - International environmental agreements; - Land acquisition process and arrangements; - Liquid effluent treatment and disposal from all three properties; - Solid waste disposal arrangements and adequacy; - Recovery of dry cleaning solvents; - Use of CFCs in air conditioning and refrigeration equipment; - Fire protection and life safety, including emergency response plans - General employee health and safety and training programs; and - Implementation of an environmental management program.
The sponsor has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific measures listed in the attached Environmental and Social Action Plans,comply with applicable host country laws and regulations and World Bank Group requirements. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow.
- Cultural Heritage:
Before beginning the project, Peru OEH will have permits from the Insituto Nacional de Cultura (INC) for the refurbishment and new construction. The INC is the government agency responsible for the protection and management of cultural properties in Peru. INC will have a representative in place during construction at the Nazarenas construction, and INC personnel will observe the refurbishments of the existing hotels. Peru OEH and shareholder companies, Sea Containers and Peruval, are committed to following the Master Plan for the Machu Picchu Historical Sanctuary in all of their respective operations. The refurbishment of the Machu Picchu Sanctuary Lodge fulfill mitigative measures under the Master Plan for the hotel: it will reduce the visual impact of the facilities, implement a fire safety plan, and bring effluent treatment up to international standards. The treatment will include the effluent from the INC facilities next to the hotel. Orient-Express Hotels, through the management of Peru OEH, has made unsolicited contributions to reducing solid waste problems in Aguas Calientes, the community associated with Machu Picchu. The project and the company are thus contributing to the solution of problems at Machu Picchu identified in the Master Plan. The company will avoid contributing to the problems of crowding and transportation at the Machu Picchu Citadel by moving its materials early and late in the day. The project meets the requirements of the IFC’s operational policy note on the management of cultural property.
- International Agreements:
Both Machu Picchu and Cusco are World Heritage Sites. UNESCO is concerned about the Machu Picchu Historical Sanctuary because of growing visitor numbers and associated development. UNESCO’s World Heritage Committee recently reviewed the status of the Machu Picchu Sanctuary Lodge. Both the company and IFC informed the World Heritage Center of the planned refurbishment.
- Land Acquisition:
The Machu Picchu Sanctuary Lodge is a government concession. The Monasterio is a concession from the Diocese of Cusco. The Nazarenas property is a lease obtained under a willing ‘seller’, willing ‘buyer’ arrangement.
- Liquid Effluent:
The sponsor will upgrade its existing effluent treatment system at the Machu Picchu Sanctuary Lodge to meet IFC standards. Effluent at the Monasterio and the new Nazarenas hotels will be treated by the Cusco wastewater treatment system. The Cusco municipality can accept and treat the effluent. The project will meet IFC’s standards for the treatment of liquid effluent.
- Solid Waste:
Solid waste from the Monasterio Hotel and Machu Picchu Sanctuary Lodge is taken to a landfill facility in Cusco, where the municipality has agreed to accept it. The train takes the solid waste from the Sanctuary Hotel once a week to Cusco. Solid waste from the Nazarenas development will also go into the Cusco landfill and local authorities have agreed that the facility can receive it. Construction waste from all three sites will go to Cusco.
- Hazardous Materials:
None of the hotels has or will have dry cleaning facilities. The existing hotels use acceptable CFC substitutes in their refrigeration systems, and no new equipment using CFCs will be installed.
- Fire Protection and Life Safety:
The company is having a fire protection and safety audit conducted by a fire safety engineer. Corrective Action Plans developed by the fire safety engineer to bring the Monasterio and Machu Picchu properties into compliance with IFC fire and life safety guidelines will have been accepted and scheduled by the company prior to first disbursement; furthermore, Peru OEH agrees to follow the engineer''s recommendations for fire and life safety on the Nazarenas property. All buildings will meet Peruvian standards for earthquake risk.
- General Employee Health and Safety:
The hotels have a health and safety training program for their employees.
- Environmental Management Program:
The sponsors are committed to developing an environmental management system for the hotels. The company will appoint an environmental manager with responsibility for implementing the system.
Conclusion & Monitoring
Accordingly, IFC concludes that the proposed project will meet the applicable World Bank/IFC environmental 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 measures contained in the Environmental and Social Action Plans; and - ongoing performance of project-specific environmental, health and safety [and social] activities [as reflected in the results of periodic and quantitative sampling and measuring programs.
Periodic site supervision visits will also be conducted.
Press-Release
Related SPI
Similar Projects
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.
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