ensamblea

Abstract del Plan Sustentable para la CMR de la Oficina del Banco Mundial Argentina.

In recent decades, the Government of Argentina (GoA) has launched important initiatives to address flooding and reduce pollution levels in the M-R Basin, but implementation has continually been postponed for legal, economic, or political reasons. In the mid-1990s, the government completed a comprehensive M-R Environmental Management Plan (EMP) and received a US$250 million loan from the Inter American Development Bank (IADB) through the Environmental Recovery of the Matanza-Riachuelo project to help finance its implementation. However, 12 years later, the IADB loan has disbursed only US$10 million and is only now committing another US$90 million for secondary networks and a treatment plant expansion (AySA’s Sudoeste treatment plant). The GoA concluded that the lack of a clear mandate and accountability for action combined with an inadequate institutional and legal framework to coordinate the involvement of the relevant jurisdictions was a major obstacle to implementing the M-R EMP. Therefore, in spite of these early efforts, the social and environmental degradation of the M-R Basin has worsened over the past decade.

Given worsening conditions in the M-R Basin, national governments have made its clean-up a high priority over the past several years. At the same time, a high-profile lawsuit1 was filed by people affected by environmental degradation against the national government, Buenos Aires province, the government of the City of Buenos Aires, and 44 industries in 2004. In 2006, the Supreme Court issued a ruling calling on the government to put in place a concrete action plan to improve environmental conditions in the basin. As a result, the Integrated Cleanup Plan for the Matanza-Riachuelo Basin (Plan Integral de Saneamiento de la Cuenca Matanza-Riachuelo, PISA) was designed and agreed by all applicable jurisdictions and AySA. A river basin authority (ACUMAR) was created by national law to implement this plan. In July 2008, the Supreme Court issued its final ruling establishing general criteria to ensure that the PISA is executed and setting a timeline for its main milestones.

The new government strategy. The new approach adopted by the GoA to solve the pollution issues in the M-R Basin is different from previous cleanup attempts and is based on two concepts: (i) the establishment of a River Basin Authority that brings together all major actors in the basin and (ii) the progressive elimination of identified point source discharges of municipal and industrial wastes into the M-R River.

The government’s formal financing request (the “carta de priorización”) from November 2007 called for World Bank lending of US$640 million as part of a total project envelope of US$800 million. Since making this initial request, the government has brought additional works into consideration, which brings the final level of Bank financing to US$840 million for APL-1.

The project comprises two overlapping phases to be executed over the 2009–2019 period, each phase to be implemented over 6 years. The first phase (APL-1) will extend from 2009 to 2016 for a total loan amount of up to US$840 million. The second phase (APL-2), for a total loan amount of $1,160 million, is expected to begin after achievement of defined targets, overlapping in time with APL-1 as new interventions are ready to be implemented.

The project (APL-1) development objectives contribute to the overall program development objective by (i) improving sewerage services in the M-R Basin and other parts of the Province and City of Buenos Aires by expanding capacity; (ii) supporting a reduction of industrial discharges to the M-R River, through the provision of industrial conversion grants to small and medium enterprises; (iii) promoting a participative approach to environmentally-sustainable land use and drainage planning and piloting urban drainage and land use investments in the M-R Basin; and (iv) strengthening ACUMAR’s institutional framework for ongoing and sustainable cleanup of the M-R Basin. The key program indicators are listed below

APL-1

• Percentage of all sewage that is currently discharged from AySA’s concession area to the La Plata River without adequate treatment that is appropriately treated and disposed of by the end of APL-1;
• Percentage of regular monitoring for at least the 50 most polluting enterprises to track progress in reducing industrial pollution;
• Percentage of the enterprises in the matching grants program that have effectively reduced their discharge loads according to their CRI’s by the end of APL-1;
• Both plans (Integrated Territorial Development Plan for the M-R Basin and updated Drainage Master Plan) are agreed with key stakeholders and implementation arrangements are piloted;
• ACUMAR has fully staffed against its new organigram, operates with its own operating budget and is fully able to fulfill the functions vested in it by law.

APL-2

• Increase in the percentage of the basin population connected to the sewerage network;
• Dissolved oxygen concentration along the M-R River higher than 2 mg/l;
• Percentage of treated wastewater in the basin and the AySA concession;
• Number of industries connected to the AySA sewerage network in line with standards in effect;
• Percentage of drainage master plan1 works completed.

1 The existing drainage masterplan is known in Spanish as the Plan Hídrico for the M-R Basin.

The Matanza-Riachuelo river basin cleanup effort is large and complex, not only because of its scale but also because of the institutional coordination and capacity required for achieving its long-term objectives. The World Bank is well-positioned to assist in this type of project because of its convening power and capability to actively engage experienced specialists from its environmental, water, urban, and social units, recruit independent international expertise, and leverage additional resources (e.g., trust funds) to support project preparation.

In this capacity, the Bank has been collaborating with the GoA in defining the concept for the project. In November 2006, at the request of SAyDS, the Bank supported an international workshop to review the 1995 M-R EMP and evaluate independent technical alternatives for the river-basin cleanup. The workshop recommended the following: (i) redesigning the pollution management strategy in the M-R Basin, taking into account the basin’s dynamic interaction with the metropolitan area of Buenos Aires and La Plata River, (ii) revising the water quality objective proposed in the EMP and adopting an approach of progressive elimination of point source discharges for the M-R River, (iii) reviewing the priorities of investments in both the EMP and the city of Buenos Aires’ pollution management program, and (iv) aggressively addressing the social problems of the poor in the M-R Basin.

Project Phases

Phase 1 (APL-1): Phase 1 of the program includes four components under two macro-components which finance a subset of activities set out under the PISA.

Macro-component 1:

1. Investments in sanitation infrastructure and technical assistance for the supervision of works prioritized by the GoA, including the Industrial collector, the Left Bank collector and the Right Bank collector.
2. collector, the Baja Costanera bypass collector, the Riachuelo preliminary treatment plant, inflow and effluent pumping stations at the Riachuelo preliminary treatment plant, and construction of the Riachuelo outfall.

Macro-component 2:

1. Technical assistance to improve environmental monitoring and enforcement of environmental targets for selected industrial activities, as well as financing of cleaner production investments to enhance and support environmental compliance among polluting small and medium size enterprises;
2. Technical assistance for environmental land use planning and financing for pilot urban and drainage works; and
3. Financing for technical studies to support project implementation (components 1, 2 and 3); a communication strategy to inform key stakeholders; project management activities; and support for the institutional strengthening of ACUMAR.

Phase 2 (APL-2): Phase 2 of the program incorporates infrastructure investments under the sanitation component that are complementary to those initiated in Phase 1. These include (i) the Baja Costanera collector, (ii) Berazategui preliminary treatment plant; (iii) the new Berazategui outfall, (iv) the effluent pumping station at Berazategui, and (v) primary and secondary sewerage networks in various parts of the basin. The Berazategui preliminary treatment plant is functionally part of APL-2 as it will be connected to the new Berazategui outfall, but is temporally concurrent with APL-1 as the government already contracted its construction.1 The investments for the industrial pollution and environmental territorial management components will incorporate the lessons learned from APL-1 and will scale-up successful activities.

Project Components

Macro-component 1: Sanitation

Component 1: Sanitation

This component aims to progressively collect, convey, treat, and dispose of wastewater from the M-R Basin along with wastewater from the AySA concession area. Sewage works included in this component are essential to improving the coverage and quality of sanitation services in the M-R Basin and the entire AySA service area, to enhancing water quality, and to expanding the potential uses of the water bodies in the M-R Basin and southern coastal strip of La Plata River

Treatment plants and pumping stations.

Construction of new sub-aquatic outfalls.

Construction of primary and secondary sewage networks (APL-2).

Macro-Component 2: Support for Industrial Pollution Abatement, Environmental Territorial Management and Institutional Strengthening

Component 2: Industrial Pollution Abatement

Based on initial estimates, there are approximately 4100 industries in the M-R Basin area that contribute a significant portion of the total organic load discharged to the M-R River in addition to virtually all toxic discharges. Of these, approximately 1600 are connected to the AySA network, while the remaining 2500 currently discharge effluents directly to the M-R River. ACUMAR will first focus on the 50 main industrial polluters that contribute approximately 95 percent of the total industrial organic load and 170 industries with the highest toxic loads that current discharge to the M-R River, using some of the technical assistance made available through this component. As part of the government’s strategy, plans for industrial restructuring (Planes de Reconversion Industrial, or PRIs), including indicators, targets, and deadlines will be developed and signed by ACUMAR with these industries.

Activities under Component 2 will complement those under Component 1, thereby contributing to the cleanup of the M-R River. Technical assistance activities will be front-loaded in APL-1 to support ACUMAR in developing and signing PRIs with the highest organic and toxic industrial polluters, and in improving overall monitoring, control, and enforcement. These include (i) supporting pollution diagnostics and policy analysis; (ii) improving the monitoring system for industrial wastes by supporting pollution control institutional infrastructure; (iii) support for adjustments to the strategy for industrial discharges; and (iv) designing and implementing a program for encouraging corporate environmental responsibility.

Additionally, within APL-1, a matching grants program will support an initial batch of private sector investments in cleaner production processes. This program will target a limited number (20 - 50) of small and medium enterprises (SMEs) which have weaker financial and technical capacity to comply with environmental regulations and with whom SAyDS will sign CRI’s (industrial conversion agreements). Firms signing CRI’s with SAyDS would be a subset of those signing PRI’s with ACUMAR. Enterprises that are eligible for participation in the matching grants program shall (i) be categorized as an SME1; (ii) have a signed PRI; and (iii) lack access to commercial credit. Detailed eligibility criteria for assistance to SMEs, as well as the specific disbursement modalities will be defined and disclosed in the project’s Operation Manual to ensure transparency of resource allocation.

Component 3: Environmental Territorial Management

This component’s main objective is to improve public policies on environmental territorial management within the M-R Basin. The component includes the following four sub-components: (i) Institutional development for territorial planning, supporting technical assistance for ACUMAR to promote territorial planning with a comprehensive development perspective for the M-R Basin and to incorporate social and environmental dimensions of planning efforts; (ii) Institutional development for flood control, supporting technical assistance to improve and update hydrological studies and management tools to control flooding events; (iii) Investments in basic infrastructure for territorial development, financing pilot interventions to improve infrastructure in low-income urban areas in both the lower and middle sections of the basin and additionally to manage sustainable urban expansion in the middle and upper sections of the basin1; (iv) Investments in basic infrastructure for flood control, financing mainly micro-drainage systems and specific macro-drainage works associated with the selected micro system. Areas that will receive investments in drainage systems will be selected through a comprehensive socio-economic cost-benefit analysis in consultation with provincial and municipal governments. It is anticipated that two low-income settlements encompassing approximately 20,000 households will benefit from this sub-component. After construction, these systems will be operated by the respective municipal governments.

1 Basic infrastructure includes (i) secondary networks for water and sanitation and the connection of those networks to the main existing water and sanitation systems, (ii) micro drainage and the section of macro drainage required to operate the micro drainage system, (iii) secondary streets, and (iv) recreational areas.

Component 4: Institutional Strengthening and Project Management

In line with the development objectives, a separate TA component has been prepared to support the design and implementation of measures required in both the short and long term to establish the necessary institutional capacity for the new basin authority. The component has been divided into five sub-components: (i) Institutional Strengthening of ACUMAR to adapt its current organizational structure to better respond to its institutional responsibilities. A new structure will be designed through a participatory process and using proven methodologies and strategies. This subcomponent will support the necessary activities such as workshops, consultants, and infrastructure investments to support the new institutional structure; (ii) a Communication Strategy to inform key actors and stakeholder groups in the basin about the project in a transparent manner; to strengthen the credibility of and support for the project; and to contribute to the overall consultation and participation framework of the project; (iii) Establishment of a public information office in ACUMAR supporting the necessary investments for the proper functioning of a public information office such as human resources, office equipment, infrastructure and logistic tools; (iv) Technical and monitoring studies encompassing both additional studies required during the course of project implementation and the provision of expert support (including a panel of recognized independent experts in the fields of environment, engineering, biodiversity, modeling etc.) to provide periodic advice in conjunction with project implementation. Studies will include additional data collection and analytical work relating to impact and water quality monitoring in the M-R River and La Plata River, as well as the control of high groundwater tables in the basin area. This subcomponent may also finance other studies required for the clean-up of the M-R River Basin as agreed with the Bank. Finally, (v) Project management, supporting human resources, physical space and equipment for UCOFI and the proposed UEP within SAyDS to strengthen purchasing, contracting and procurement processes as well as technical management of the project.

Borrower (World Bank) 647.-

International Bank for Reconstruction and Development 840.-

Total (u$s m.) 1,487.-

Implementation

Project implementation period: The project comprises two overlapping phases to be executed over the 2009–2019 period, each phase to be implemented over 6 years. The first phase (APL-1) will extend from 2009 to 2016 for a total loan amount of up to US$840 million. The second phase (APL-2), for a total estimated loan amount of $1,160 million, is expected to begin after achievement of defined targets, overlapping in time with APL-1 as new interventions are ready to be implemented.

Executing agencies: The National Government will be the Borrower for the proposed loan. SAyDS will be responsible for overall project coordination and will directly implement macro-component 2 together with ACUMAR (as the inter-jurisdictional entity). While ACUMAR has been created as an inter-jurisdictional entity with overall responsibility for implementing the PISA, the government recognizes that ACUMAR currently has limited implementation capacity which will be reinforced and developed over the course of APL-1. Regarding macro-component 1, AySA will be the executing entity while ACUMAR, will ensure the consistency of project activities with the PISA in line with its legal mandate

Project administration: SAyDS will exercise its overall project coordination role for the present project through two units: UCOFI (Unidad de Coordinación para la Gestión Técnica y Financiera Internacional) and UEP (Unidad de Ejecución del Proyecto). UCOFI will manage the project’s accounts from which it will make all payments for goods, works, and services procured under components 2, 3 and 4. With technical support from UEP and ACUMAR (which will help produce terms of reference and technical specifications and support bid/proposal evaluation and contract supervision) UCOFI will also carry out all procurement for these components. For component 1, UCOFI will transfer funds to AySA which will contract all goods, works and consulting services and make all payments to consultants and contractors using its regular technical units. These units include AySA’s procurement and legal departments (for the preparation of bidding documents) and AySA’s planning department for technical aspects. The environmental, social relations and communications departments of AySA will also participate in project implementation.

Sustainability

The GoA has made solving the M-R Basin’s environmental problems a high priority. In addition, the Supreme Court ruling requiring the central government, Buenos Aires province and the city of Buenos Aires to clean up the M-R River and its basin makes rehabilitation a matter of national (not merely government) policy. In addition, the Supreme Court ruling has also hightened the profile of ACUMAR which has been designated the lead agency responsible for clean-up of the M-R basin. Finally, given that the M-R River has been a source of national debate for several decades, and the recent Supreme Court ruling, future governments (both national and provincial) will almost certainly continue to consider the clean-up of the Basin a high priority. Even so, it is clear that implementation of PISA will require substantial political and financial commitment by the national government, at levels that may be difficult to sustain given global economic uncertainty. Moreover, the Supreme Court’s ruling notwithstanding, ACUMAR remains dependent on national government financing and personnel.

Regarding financial sustainability of investments under Macro-Component 1, the GoA will assure the adequate operation and maintenance of the main infrastructure investments under the sanitation component of the proposed project. The GoA will own the new assets, and AySA will be the infrastructure operator. The GoA, as the majority owner of AySA, is making budgetary transfers1 necessary for the normal operation of the company, as has been the practice since AySA’s creation.

For industrial pollution abatement, cleanup investments will include those financed by the private sector within a framework of government-sanctioned economic incentives and penalties. The project proposes a US$41 million fund that will provide financing to a number of SMEs for pollution control and cleaner production investments. This financing would be on a matching grant basis, as opposed to a targeted or revolving credit fund. The financial cost of future compliance would be assumed by the private sector.

SAyDS and ACUMAR will implement works and activities such as the infrastructure investments under the environmental territorial management component of the proposed project. For long-term sustainability, these investments rely on strengthening ACUMAR as the lead agency for the basin. Operation and maintenance functions will be transferred to the relevant jurisdictions, i.e., the relevant municipality for micro drainage investments and the province for macro-drainage investments.

Lessons learned from past environmental operations involving utilities.

Past operations have often ignored the additional financial burden that expanded sewage collection and treatment systems place on utilities.

This project explicitly recognizes the importance of cost recovery – in terms of covering the operations and maintenance costs resulting from new sewage infrastructure — and takes several concrete steps towards addressing it.

Adopting an integrated basin-wide approach. Experience with pollution control projects in river basins in Bangladesh, China, and elsewhere has shown the importance of adopting a basin-wide approach, with integrated components that fit together “naturally” and do not place an undue burden on borrowers and implementing agencies.

Understanding obstacles to local capacity building. Implementation experience from previous projects in Argentina, particularly in partnership with SAyDS, has shown the following main weaknesses: (i) lack of technical capacity, (ii) lack of awareness of project processes, and (iii) frequent changes in leadership and personnel. This situation has led to enormous delays in project implementation.

Need for public participation and communication. The Bank’s experience with pollution-control and sewerage infrastructure projects clearly demonstrates the need for a strong public participation and communication component to address public concerns related to project components. The proposed operation has already carried out consultation workshops to analyze the terms of reference for and draft of the Environmental Impact Assessment (EIA). ACUMAR has also agreed to establish and maintain more frequent dialogue with NGOs and other stakeholders through its Social Participation Commission. A dedicated communication strategy is being financed through the proposed project.

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