KESC has presented plans and relevant information about potential environmental and social issues related to the project – both Generation Expansion and T&D Rehabilitation and how KESC is addressing these issues. The following paragraphs summarize the issues and mitigation in areas covered by IFC Performance Standards on Social and Environmental Sustainability.
PS-1 Social and Environmental Assessment and Management Systems:
Corporate Environmental Management Systems – Since its privatization in December 2005, the Company started actions to strengthen its social and environmental management systems. These actions include establishment of Health, Safety and Environment (HSE) Policy, identification of HSE objectives, establishment of HSE management structure (including appointing the head of HSE Unit), preparation of HSE manuals, formation of Safety Committees, establishing HSE Action Plan, including HSE key performance indicators (KPIs), implementation of adequate HSE training, and implementation of social programs. Tasks ahead are challenging, especially considering that the significant corporate resources will need to be devoted first to restore and improve reliable supply of electricity, but the Company’s commitment in improvement performance in the environmental, health and safety, and social fields is strong.
Generation Expansion Project – KESC plans to add a 220MW gas-fired combined cycle power units at Korangi Thermal Power Station and a 575MW gas-fired combined cycle power units at Bin Qasim Thermal Power Station. An independent environmental consulting company (ECTECH) was retained by KESC to support KESC’s social and environmental assessment in accordance with the Pakistan Environmental Protection Agency (Review of IEE and EIA) Regulations 2000 and the IFC’s Performance Standards on Social and Environmental Sustainability. For both expansion projects, Social and Environmental Impact Assessment (SEIA) reports are being prepared. The latest versions of January 2007 are attached to this ESRS. IFC has advised KESC to supplement some of the assessment areas to further strengthen the quality of assessment, to confirm that the proposed mitigation measures are adequate, and to design more robust and effective Environmental Management Plans. IFC will monitor the progress of the supplement assessment in parallel with processing financing documents.
Communities affected by the Generation Expansion Project – The SEIAs identified that the communities surrounding Korangi Thermal Power Station and some of the communities surrounding Bin Qasim Themral Power Station are characterized as poor. There are high levels of poverty, illiteracy, unemployment, and malnutrition. The SEIAs indicate that KESC is developing a plan to support social programs in the local communities.
Environmental, Health and Safety Performance of Existing Assets – As part of the privatization process, the Company retained ECTECH to conduct an environmental audit for existing thermal power stations. Air emissions, ambient air quality, wastewater discharge, and noise were measured and evaluated against the Pakistan standards (National Environmental Quality Standards – NEQS). Some areas of non-compliance with the NEQS, or of concern, were identified and relevant recommendations were made by ECTECH. These recommendations are summarized in the attached Action Plan, which will be implemented by the Company. Furthermore, the Company is committed to conducting an environmental, health and safety audit for the existing T&D assets to identify areas of non-compliance or of concern and to determine corrective actions. Areas of T&D audit will include Polychlorinated Biphenyls (PCBs), asbestos, minimum clearance of high voltage conductors, occupational and public exposure to Electromagnetic Fields. Implementation of this audit and its recommendations is included as one of the tasks in the Action Plan.
PS-2 Labor and Working Conditions:
The Company has over 18,000 employees and there are several labor unions. The Company recognizes the importance of improving the employee / labor relationship. Human Resources Manuals for Officers and Non-Officers, both dated November 2002, as well as Collective Bargaining Agreement dated November 10, 1998 (still valid), provide details on working conditions and terms of employment. The Company informed IFC that no retrenchment of staff is expected in the near future. The Company publishes internal newsletter “Empower” to disseminate information about the gains in performance made after privatization.
The Company’s occupational and public health and safety performance needs to be improved significantly to reach international standards. There are some buildings under the transmission lines, or high voltage areas in grid stations not properly fenced to prevent workers from entering such areas. The Company had 33 fatal accidents of workers in 2001-2006. Due to the improper protection of the T&D assets, as well as the high frequency of electricity thefts, the Company recognizes that fatalities among the general public are also high. Significant improvement in health and safety management, for both workers and the general public, needs to be made. An environmental, health and safety audit for the T&D assets, and the implementation of recommendations, are part of the Company’s Action Plan.
PS-3 Pollution Prevention and Abatement:
Air Emissions – The SEIAs prepared for the 220MW Korangi Expansion Project and the 575MW Bin Qasim Expansion Project describe various pollution mitigation measures planned or proposed and conclude that the projects’ impacts will be minimized to ensure that relevant Pakistan National Environmental Quality Standards are met. The new gas-fired combined cycle units to be added are cleaner than the existing Korangi and Bin Qasim thermal power stations, which are running on either heavy fuel oil or gas. The NOx emissions performance described in the SEIAs are 103 mg/Nm3 – or about 50ppm (assumed at 15%O2) with water injection NOx control measure for Korangi Expansion, and 9 ppm (assumed at 15%O2) with Dry Low NOx Combustor for Bin Qasim Expansion, both in compliance with the current World Bank Group NOx emission guideline of 125 mg/Nm3 (about 61ppm, at 15%O2). The proposed stack heights are 30m for Korangi Expansion, and 46 m (150ft) for Bin Qasim Expansion. The SEIAs conclude that the expansion projects would not effect the environment to the extent that it would cross the allowable Pakistan National Environmental Quality Standards for ambient NO2 which is 100 microgram per cubic meters.
Thermal Discharge – Both expansion projects are proposed to use once-through cooling system, discharging thermal effluent to the marine environment. The shoreline where the Korangi Thermal Power Station is located is inhabited by villages of local fishermen. In the vicinity of both Korangi and Bin Qasim Thermal Power Stations, the SEIAs identified mangrove forests. The SEIAs conducted thermal discharge impact assessments and conclude that the effect of thermal discharge from the project is diminished within a distance of 580m from the point of discharge (Korangi Expansion) and the rise in the temperature of the recipient sea water after mixing with the discharge water will be negligibly small and restricted to very small area (Bin Qasim Expansion). The condensers are designed for maximum temperature rise of 8 Celsius (Korangi Expansion) and 7 Celsius (Bin Qasim Expansion), whereas the actual rise in incoming and outgoing seawater is not expected to increase above 3 Celsius.
Impacts on entrainment / impingement of marine organisms –The cooling intake structure of the new units will be designed to have the through slot velocities of the screen below 0.5 feet per second to minimize entrainment and impingement of marine organisms.
Noise – At Korangi, some project affected communities are close to the plant ranging 0.05km to 8km, whereas at Bin Qasim, the the project affected communities are in the range of 8 to 16 km from the plant. Although there are some communities near Korangi, the noise levels from the expansion project and the existing thermal power plants combined are expected to be within the World Bank limits for residential and industrial receptors.
Water Usage – At Korangi expansion, water injection to reduce NOx emissions requires 208 liter per minute on gas fuel, and 295 liter per minute on backup liquid fuel. Total intake of seawater is expected to be 21,000 m3 per hour, out of which 16,000 m3 per hour will be used for the steam condenser. Remaining seawater will be used for RO Desalination Plant and Electro-Chlorination Unit. The desalinated water will be further treated in a demineralization plant to supply make-up water for Heat Recovery Steam Generator and other use. The Bin Qasim SEIA also describes desalination of seawater with subsequent demineralization will be used.
Wastewater Treatment – The regeneration effluents of the deminaralization plant will be neutralized before it is discharged into the sea. Mitigation measures specified in the SEIAs include wastewater treatment to be carried out continuously and monitored before mixing with return seawater. Sanitary wastewater will be discharged to the existing Karachi Water and Sewerage Board system at Korangi and to the existing Port Mohammad Bin Qasim Sewerage system at Bin Qasim.
Greenhouse Gas Emissions – In 2006, KESC’s GHG emissions performance is estimated to have been 730 tCO2/GWh, assuming that 9,130 GWh of electricity was produced with consumption of 83 million MMBtu of gas and 21 million MMBTu of heavy fuel oil. The CO2 emissions performance of the new gas-fired combined cycle power units is estimated to be 380 tCO2/GWh assuming 53% LHV thermal efficiency, in the case of Bin Qasim Expansion project. The overall GHG emissions performance of KESC is expected to be significantly improved, not only through improvement in the generation side, but also in the transmission side due to expected improvement of technical loss by the project.
Environmental Management Plan – Both SEIAs proposed Environmental Management Plan (EMP) for both construction and operational phases. The Action Plan being agreed with KESC will include finalizing the EMP with more specific information and its implementation.
PS-4 Community Health, Safety and Security
The SEIAs identified 12 communities (0.05 to 8 km from the Korangi TPS) and 8 communities (8 to 16 km from the Bin Qasim TPS). These communities have a positive view of the generation expansion project, but they have concerns about job opportunities, marine life, coastal life and livelihood of fishermen. The SEIAs proposed both Environmental Management Plans and Social Management Plans with actions to minimize the potential for community exposure to hazardous materials. SEIAs describe that KESC has initiated the development of a plan to support community development initiatives.
PS-6 Biodiversity Conservation and Sustainable Natural Resource management
There are mangrove forests in the vicinity of KTPS, along the Korangi Creek. KTPS is at the mouth of the Korangi Creek, adjacent to a fish harbor in the Korangi Industrial Area. The mangrove forests were declared as protected forests under Forest Act 1927, and all the trees in the mangroves were declared as reserved trees. The mangrove forests are being degraded due to reduced flow of sweat water, navigational activities, industrial effluents, wood and fodder harvesting, over fishing, etc., resulting in the reduction of fish and birds resources. Turtles are present in the creek waters and a scheme has been launched by World Wildlife fund and Sindh Government for their conservation. There are no fishermen in the project affected communities of Bin Qasim TPS, but there is the existence and declining trend of mangroves in the project’s area of influence. The SEIAs, based on their assessment of impacts, conclude that the generation expansion projects will not significantly affect the surrounding fauna and flora including mangroves. IFC has suggested KESC to supplement SEIAs with more quantitative assessment (e.g. thermal discharge impacts on the mangroves in the area).
PS-8 Cultural Heritage
Karachi is rich in cultural heritage. After the privatization, the Company handled some of the cultural heritage related issues, and now recognizes the importance of introducing cultural heritage policies / procedures as part of KESC’s next set of activities. The SEIA for Korangi suggests that there has been an issue of the protection of sacred grave at Korangi, but due to the change in site location of the Korangi expansion project, IFC understands that the sacred grave will not be affected by the Korangi Expansion project.