ROMANIA
HAZARD RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT
GEF Project Document
Europe and Central Asia Region
ECSSD
Date: March 29, 2004
Team Leader: Christoph Pusch
Sector Manager: Marjory-Anne Bromhead
Sector(s): Flood protection (80%), Mining and other
Country Director: Anand K. Seth
extractive (20%)
Project ID: P075163
Theme(s): Natural disaster management (P), Pollution
Lending Instrument: Specific Investment Loan (SIL)
management and environmental health (P), Other urban
development (S), Water resource management (S), Rural
services and infrastructure (S)
Global Supplemental ID: P081950
Team Leader: Rita E. Cestti
Sector Manager/Director: Marjory-Anne Bromhead
Sector(s): General water, sanitation and flood protection
Lending Instrument: Specific Investment Loan (SIL)
sector (80%), Mining and other extractive (20%)
Focal Area: I - International waters
Theme(s): Pollution management and environmental health
Supplement Fully Blended? Yes
(P) , Water resource management (S)
Project Financing Data
[X] Loan [ ] Credit [X] Grant [ ] Guarantee [ ] Other:
For Loans/Credits/Others:
Loan Currency: United States Dollar
Amount (US$m): $150.00
Borrower Rationale for Choice of Loan Terms Available on File:
Yes
Proposed Terms (IBRD): Variable-Spread Loan (VSL)
Grace period (years): 5
Years to maturity: 17
Commitment fee: 0.75%
Front end fee (FEF) on Bank loan: 1.00%
Payment for FEF: Borrower to Pay from Own Resources
Financing Plan (US$m): Source
Local
Foreign
Total
BORROWER/RECIPIENT
46.41
0.25
46.66
IBRD
71.66
78.34
150.00
GLOBAL ENVIRONMENT FACILITY
2.83
4.17
7.00
Total:
120.90
82.76
203.66
Co-financing for GEF Supported Activities: Component D "Risk Reduction of Mining Accidents in Tisza Basin" with
estimated cost of US$15.25 million is financed by GEF, IBRD and the
Borrower. Parallel program activities in support of the hazard prevention
and remediation interventions are expected from the USTDA and Austrian
Government.
Borrower/Recipient: GOVERNMENT OF ROMANIA
Responsible agency: MINISTRY OF TRANSPORT, CONSTRUCTION AND TOURISM
Address: 38 Dinicu Golescu Bvd., Sect.1, Bucharest, Romania
Contact Person: Ms. Ileana Tureanu, Secretary of State
Tel: +40-21-312-5417 Fax: +40-21-212-6945 Email:
Other Agency(ies):
Ministry of Environment and Water Management
Ministry of Administration and Interior

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National Agency for Mineral Resources
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P075163 Estimated Disbursements ( Bank FY/US$m):
FY
2004
2005
2006
2007
2008
2009
Annual
0.53
12.33
34.56
41.78
39.83
20.97
Cumulative
0.53
12.86
47.42
89.20
129.03
150.00
P081950 (GEF) Estimated Disbursements ( Bank FY/US$m):
FY
2004
2005
2006
2007
2008
2009
Annual
0.21
3.32
2.28
0.52
0.45
0.22
Cumulative
0.21
3.53
5.81
6.33
6.78
7.00
Project implementation period: 2004 - 2009
Expected effectiveness date: 07/01/2004 Expected closing date: 12/31/2009
OPCS PAD Form: Rev. March, 2000
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A. Project Development Objective
1. Project development objective: (see Annex 1)
The overall objective of the project is to assist the Government of Romania in reducing the environmental,
social, and economic vulnerability to natural disasters and catastrophic mining accidental spills of
pollutants through: (i) strengthening the institutional and technical capacity for disaster management and
emergency response through upgrading communication and information systems; (ii) implementing specific
risk reduction investments for floods, landslides and earthquakes; (iii) improving the safety of selected
water-retention dams; and (iv) improving on a pilot basis the management and safety of tailings dams and
waste dump facilities.
2. Global objective: (see Annex 1)
The project global environmental objective is to demonstrate and provide for replication for the reduction of
catastrophic accidental spills of transboundary pollution loads from mine operations flowing into the
Danube and Black Sea basins. In support of this objective, the project, through a proposed GEF
co-financed component, will assist in piloting and replication of hazards prevention and remediation
activities for improving the management and safety of tailings dams and waste dump facilities; and in
catalyzing transboundary cooperation on integrated water resources management of the Tisza Basin. The
successful implementation of the GEF co-financed component will serve as a model for replication for
reducing mining accident risks to human and aquatic ecosystem health throughout Romania and other parts
of the Tisza and Danube basins.
3. Key performance indicators: (see Annex 1)
The following are expected outcomes of the activities supported by the project:
l
Strengthened institutional and technical capacity for emergency management and emergency response
through upgrading communication and information systems.
l
Increased earthquake risk mitigation with some key, prioritized public facilities retrofitted.
l
Increased level of flood protection with some high priority investments implemented.
l
Improved dam safety of the selected priority structures.
l
Gradual reduction in number and negative impacts of mining accidental spills of pollutants into the
Tisza Basin and in the volume of toxic releases from mines.

B. Strategic Context
1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1)
Document number: 22180-RO Date of latest CAS discussion: May 22, 2001
The project supports improved national preparedness for natural disasters, one of the CAS objectives. The
CAS states that the HRMEP loan would assist in Romania's efforts to mitigate the costs of damage from
earthquakes, floods, toxic waste, and other natural and man-made disasters which taken together regularly
plague the country. The IBRD operation, to be co-financed by a GEF grant, would support development
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and implementation of an environmental monitoring and warning system, as well as priority rehabilitation
investments for addressing toxic pollution from tailings dams in the Tisza River Basin.
The project is included in the CAS lending program in both low, and high case scenarios.
1a. Global Operational strategy/Program objective addressed by the project:
The proposed GEF-supported component is fully consistent with the GEF's Operational Strategy in that it
supports long-term protection of international waters and complies with the long-term objective of the GEF
"Waterbody-Based Operational Program" (Operational Program No. 8), which is to "undertake a series of
projects that involve helping groups of countries to work collaboratively with the support of implementing
agencies in achieving changes in sectoral policies and activities so that trans-boundary environmental
concerns degrading specific waterbodies can be resolved." The GEF-supported component is also fully
consistent with two of the GEF strategic priorities on international waters, namely, catalyzing financial
resource mobilization for implementation of agreed actions and reforms in Strategic Action Programs; and
undertaking innovative demonstrations for reducing contaminants. In addition, the GEF-supported
component is in line with the objectives of the Programatic Approach to the Danube and Black Sea Basin,
namely, that Danube and Black Sea basin countries (i) adopt and implement policy, institutional and
regulatory changes to reduce point and non-point source nutrients discharges, restore nutrient sinks and
prevent and remediate toxic hot spots; and (ii) gain experience in making investments in prevention and
remediation of toxic "hot spots." The GEF component will: (i) enable the development of a more integrated
knowledge base about transboundary impacts of mine-induced pollution in the Danube and Black Sea
basin; (ii) provide capacity building to increase the opportunity for adoption of best mine waste
management practices throughout the Tisza and Danube basins; (iii) pilot techniques for prevention and
remediation of toxic mining hot spots; (iv) provide for lessons learned that could be replicated to other parts
of the Tisza and Danube basins; (v) leverage support from the mine operators to replicate measures to
manage the risks associated with tailings and waste disposal facilities; and (vi) foster transboundary
cooperation.
The project also directly supports the goals of the International Convention for the Protection and
Sustainable Use of the Danube River. The 1994 Danube Strategic Action Plan under the Convention on
Cooperation for the Protection and Sustainable Use of the Danube River is concerned with transboundary
water issues and includes provisions to protect the Black Sea and Danube Delta against pollution by
nutrient and hazardous. Until recently, most of the attention on the Danube and Black Sea basins has been
concentrated on reduction of nutrient loads to address the problem of euthrophication in the Black Sea.
The recent mining accidents in the Tisza catchment area, however, have pointed out that additional priority
should be placed to address mine-induced water pollution and mining accidents.
The 2001-2005 Joint Action Environmental Program for the Danube River Basin has identified key
priorities areas including mining-induced pollution, i.e., pollution and potential accident pollution caused by
waste deposit sites and mining tailing dams. The proposed GEF component will enable implementation of
some of the recommendations of the Action Plan.
2. Main sector issues and Government strategy:
Romania is the first country in the ECA region whose government has requested the Bank's assistance in
preparation of a comprehensive hazard risk management project on an ex-ante basis. The usual pattern has
been that the Bank is asked for the support in the aftermath of disasters. Romania can be regarded as a
leader and a good example for other disaster-prone countries in the region, for adopting a strategic and
pro-active approach which allows for possible reduction of vulnerability to multiple natural hazards.
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The country is severely exposed to a range of natural disasters, particularly to earthquakes and floods
causing economic and human losses across the country. Since 1908, 14 earthquakes of magnitude VII or
greater and 8 major floods were recorded affecting almost 2 million people and causing massive economic
losses. The 1977 earthquake, measuring 7.2 on the Richter scale, resulted in economic losses well in excess
of US$2 billion, while the July 1991 flood caused damages estimated at $0.5 billion, affecting a large area
of about 1,400kmē, and damaged more than 12,000 buildings, 990 km of roads, 14 km of railroads, and
150 bridges. More recent floods, in 1997 and 1998, caused damages estimated at US$310 million and
US$150 million respectively.
During the time of the highly centralized regime prior to 1989, the national government was taking full
responsibility for the reconstruction work in the aftermath of disasters. The government mobilized military
and other public/private resources via top-down orders to cope with the large-scale damages. All related
financial consequences were carried by the state. Since then, Romania has been going through a major
transition with associated re-organization of the disaster management structures. The restructuring of the
institutional set-up is a part of initiatives to demilitarize and decentralize emergency management functions,
motivated in part by expectations of the European Union and NATO's standards. These changes are
on-going and include organizational restructuring of functions.
The organizations with a mandate to handle disaster management and response, such as the Civil
Protection, Fire Brigades, and sectoral agencies, lack the necessary technical and financial capacities to
respond effectively. Deficiencies in protective investments, equipment, communication systems, and
limited access to up-to-date knowledge and technical schemes are just a few examples of the shortcomings
which hamper emergency preparedness, mitigation and management system, and make Romania more
vulnerable to consequences of natural and man-made disasters.
Vulnerability to seismic risk is due to Romania's geographical location on the Vrancea subduction zone,
situated along the south-eastern Carpathian arc, which forms an ellipse stretching from the north east to the
south west of Romanian territory, including Bucharest. Proximity to the fault and poor soils make
Bucharest Europe's highest risk capital city and one of the 10 most vulnerable cities in the world.
Compounding the situation is the fact that Romanian economic activities are concentrated in and around
Bucharest. The vulnerability of the Romanian economy to earthquakes alone is further exemplified by the
following facts:
·
over 35 percent of Romanians or 65 percent of all urban population is exposed to seismic hazards
from the Vrancea fault;
·
60-75 percent of fixed assets is located in seismic zones;
·
70-80 percent of GDP is produced in highly seismically prone areas;
·
45 percent of all national lifelines are in seismic areas of VII-IX intensities on the Mercalli Scale
(MSK);
There have been various forecasts of future seismic activities, ranging from another earthquake within few
years to forecasts anticipating catastrophic seismic activity within next few decades. Regardless of the
accuracy of either estimation, it is clear from the historical record that large magnitude earthquakes occur
on the Vrancea zone with considerable regularity and that a major event should be anticipated in the
coming years.
The 1977 earthquake served as a catalyst for Romania to begin implementation of seismic risk reduction
measures. This strategy includes the development and implementation of improved building codes and the
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identification of at risk structures. The need for effective measures in this regard may be underscored by
the fact that 26 percent of national housing stock was built before 1944 and is highly vulnerable to
earthquakes.
The government conducted inventories of several categories of at-risk structures, i.e. privately owned
buildings, schools, universities, hospitals, health care facilities, and structures of cultural or historic
significance. As a result of this initial assessment, 541 residential buildings (including 341 in Bucharest),
1,100 schools, 128 university buildings, and 65 hospitals were identified as being at risk.
The Ministry of Transport, Construction and Tourism enforces building codes either through its own
personnel or other experts trained and certified by the ministry. The general consensus is that the codes are
effectively enforced.
Floods often affect Romania and there is a tendency for increased flood levels and frequency in the last
decade. Between 1992-2001 there were floods every year in some parts of the country resulting in
significant and human losses (123 people died due to floods in that period). The total material losses of
US$528.9 million were documented between 1997 and 2001. In 1999 losses were estimated at US$132
million and in 2000 at US$98.3 million. A total of 1.3 million ha and 500,000 people are at serious risk of
being flooded every year. The main damage risk is presently posed by the unprotected streams and the
deteriorated existing flood mitigation facilities.
The Romanian authorities have a good understanding of hazards associated with floods. Areas at risk are
identified and mapped. The National Administration "Romania Waters" (Apele Romane) has a complete
assessment of investment needs for the flood mitigation works to reduce the flood damage in high-risk
communities. The Government has developed a comprehensive overall master plan to reduce flood and
dam safety risk, implementation of which is estimated to cost about US$1 billion over the next 10 years.
Moreover, in view of the urgency of flood control works, the Government took an initiative to secure
several sources of funds from the European Union and other international donors to implement critical
flood defense projects. A total of over EURO 400 million have been provided to implement flood defense
projects. These projects are part of the master plan to eliminate frequent flood losses in many of the North
and North Western areas of the country.
The flood monitoring and forecasting systems, although well organized in regard to the structure of
information flow, are technically obsolete and need to be upgraded in to order have more reliable data input
for forecasting, decision support system (DSS), and for dissemination to communities. For that purpose,
the Government secured international support for financing the upgrading of the existing flood monitoring
and forecasting system.
Romania has 246 large and medium dams, and 1,260 small dams. Most of these dams were constructed in
the last 50 years. The main weakness of the dam safety program in Romania is that there are still major
dams that are unsafe due to either damage or uncompleted or improper construction, resulting in risk of a
collapse. These dams were constructed in the 1980's when funds were scarce and many key items were not
built according to the existing standards. In recognition of these risks, the Government of Romania has
considerably improved the institutional and regulatory environment in the area of dam safety management,
from the design, through the construction, and the operation phases. The National Commission for Dam
Safety (CONSIB) was established in 1994, and at its initiation key laws defining responsibilities and
procedures, standards, and norms were introduced in Romania in recent years.
Another natural hazard typical for Romania is a risk of landslides. In the rural environment, particularly
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in mountainous areas, landslides represent a critical hazard. The total estimated area exposed to landslide
hazards covers about 700,000 ha, putting at risk 50,000 households, 250,000 people, agricultural land,
public and private buildings, public utility networks, and roads. The areas of the highest landslide risk are
located in the South Eastern and North Eastern portions of the Carpathian Mountains. These landslides are
attributed to the precipitation, slope degree, soil condition, land use and management. Realizing the
magnitude of landslide hazard, the Government passed a Law 575 of October 22, 2001 (Plan of
Management of National Territory ­ Section V ­ Areas of Natural Hazard), which provides a summary of
information on landslides in Romania and identifies all communities under landslide risks. The law
stipulates that all areas at serious landslide risk are set aside and should not be developed.
The Government of Romania has initiated a process of developing a financial strategy to cope with
consequences of major catastrophic events, along with legal provisions for coverage of incurred liabilities.
With the insurance penetration presently standing at 3-5 percent of households, $13.9 per capita or 0.85%
of GDP in 2000, most of these losses would have to be absorbed by the government (perhaps through
major tax increases and borrowing), local businesses, and homeowners. Therefore, the government is
considering introduction in the future of a catastrophe insurance program, design of which is still to be
determined based on the required technical feasibility studies.
Romania also faces the risk of water pollution from mining accidents. The accidents at tailings dams in
the Maramures region in year 2000 (e.g., Aurul mine, in January 30; and Baia Borsa mine, in March 20)
have shown that there is a need for mainstreaming safety and environmental concerns into mining
operations. According to available information, there are 264 small dams constructed to store mine tailings,
out of which about 40 pose a severe threat to the surrounding human population and the environment. Long
term environmental damages to surface waters from spill and erosion induced persistence toxins such as
heavy metals are of international concern.
The Mining Sector Environmental Assessment (MSEA) conducted recently by the Government of Romania
points out that the continuous release of toxic substances from mine operations is caused by the poor
management, operation and maintenance of tailings dams facilities (TDFs), including inadequate
monitoring and operational control of the water management systems and the retaining dam structures.
Field surveys have also revealed that a large amount of the contaminated water is actually seeping through
the dam body or escaping from dilapidated pipes. In addition, awareness of these problems is insufficient.
The Government of Romania is aware of the poor situation of the tailings dams facilities of closed and
active mines, and is trying to address the problem. At present, state owned companies receive some funds
from the State Budget to deal with TDF's problems. The Mine Sector Strategy prepared recently by the
Government also recognizes the importance of addressing TDFs and calls for more financial support to this
area.
As a candidate for membership in the European Union (EU), Romania is committed to adopt and
implement the EU environmental directives, including the EU Water Framework Directive (WFD). The
EU WFD introduces the concept of integrated management of river basins. It calls for the elaboration and
implementation of river basin management plans for achieving "good water (quantity and quality) status,"
which shall address among other issues, point-source pollution reduction (including those of mining
activities), prevention and mitigation of threats from land-based sources of pollution, chronic and
accidental pollution, flood control and management, and conservation of aquatic ecosystems. At the
national level, efforts are under way to amend the national legislation and harmonize it with EU directives
and to prepare a management plan for the Upper Tisza Basin. At the regional level, the countries in the
Tisza basin, namely Ukraine, Slovakia, Romania, Hungary, and Serbia and Montenegro have started a
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dialogue on basin-wide management under the EC Tisza River Basin Project and the UNECE River Basin
Sustainable Development Program. Concrete mechanisms are being identified to engage riparian countries
in the development of integrated water and environment management strategies.
3. Sector issues to be addressed by the project and strategic choices:
The project intends to assist the Government of Romania in reducing country's social and economic
vulnerability sense through a set of comprehensive and high priority measures addressing a number of
critical hazards characteristic for Romania. An alternative to this approach is sectoral fragmentation
which would require separate projects for each type of hazard. It has been determined, based on the
experience from other countries, that tackling each category of hazard in isolation from other risks is by far
less efficient and effective.The project supports a comprehensive risk management approach and promotes
close coordination between the responsible authorities. Such approach will help to avoid overlapping of
efforts and will contribute to a cost efficient implementation of high priority measures.
The design of the project is put in a context of a framework program, i.e. individual components will
support activities complementary to the ongoing and planned government initiatives and assistance of other
donors. It is particularly well exemplified by the measures proposed under the Earthquake (component B),
Flood (component C), and Mining Accident (Component D) Risk Reduction components where the
proposed activities are based on the existing analyses and studies completed by the Romanian agencies, and
ongoing or planned assistance from other donors, such as: European Union (Phare Program, European
Investment Bank, European Bank for Reconstruction and Development), the United States (US Trade and
Development Agency, US Agency for International Development, ExIm Bank), Austria, Japan (Japanese
International Cooperation Agency), Germany (German Research Foundation). For instance, there is an
ongoing project supported by JICA, providing Romania with know-how of modern construction and
retrofitting standards. Similarly, the proposed project has been developed in close coordination with a
project supported by the Austrian Government to undertake rehabilitation measures at the Novat tailings
ponds in Baia Borsa. The project builds upon this cooperation by application of the up-to-date
strengthening methods in the selected structures. Similarly, in case of flood protection, forecasting and
dissemination, the EU programs and loans finance a number of flood defense schemes and flood forecasting
for Tisza basin, while the US TDA and ExIm Bank are providing support for the country-wide forecasting
system.
The project will not finance retrofitting of privately owned apartment buildings. According to the Ministry
of Transport, Construction and Tourism, out of 3,400 residential buildings that were assessed, 578 were
ranked in class 1 of seismic vulnerability. Efforts to strengthen privately owned buildings are
controversial. Based on expert opinion, the anticipated cost of repairing the identified buildings ranges
between 60-70% of the replacement cost. A retrofitting program with such high cost would not be
advisable from an economic point of view, and would provide a false incentive to private owners to transfer
the cost associated with the earthquake risk to public funds. Furthermore, a retrofitting program of private
residential buildings seems, at this stage, not to be socially accepted. Initial reactions to Government
sponsored programs indicated that inhabitants are reluctant to vacate their properties during the retrofitting
activities.
The project will concentrate on the efforts with high public benefit and priority through strengthening of
selected critical public facilities which have a paramount role in the emergency response and preparedness
system, such as: hospitals, universities and other government buildings. The earthquake risk reduction
activities to be supported by the project are designed to build upon the reviews conducted by the
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government. The project will support investments in structural and nonstructural mitigation measures for
prioritized structures based upon the results of functional, technical and economic cost/benefit assessment
of these facilities.
The structural changes underway in Romanian emergency management lead to the conclusion that there is
at this point, no need for an institutional overhaul nor creation of new institutions to manage emergency
response. The current emergency management organization is a result of restructuring designed to
demilitarize the response system to disasters. The Civil Protection and Fire Corps which are the nation's
two principal emergency management agencies, were moved in 2000 from the military department to the
Ministry of Interior, then from 2002 to the Ministry of Public Administration, and as of June 2003, the
Ministry of Public Administration was merged with the Ministry of Interior. Consequently, the Fire Corps
and the Civil Protection Units have been subordinated to the new Ministry of Administration and Interior
(MAI).
Romania has a system of ministerial Commissions for Defense Against Disasters, headed by the Central
Commission at the Prime Ministry level. The system of commissions is essentially replicated at county and
local levels. The project intends to strengthen the institutional capacity of existing entities by
modernization of communication systems and information technology, enhancement of planning, and
provision of training.
The project intends to develop and to institutionalize a consistent risk management approach to identify
cost-effective risk reduction measures for tailings dams and waste dump facilities, so available resources
can be channeled to those measures with the highest benefits.
Romania's high exposure to natural disasters, the seismic vulnerability of its housing stock and
infrastructure, and the expected high economic losses from catastrophic events call for a national
catastrophe insurance mechanism which would help to reduce the government contingent liability due to
natural disasters by transferring highly concentrated catastrophe risk to the international reinsurance and
capital markets. Introduction of such a catastrophe insurance program, however, must be preceded by
necessary technical feasibility work to prepare Romania for launching the program. The project will
support the studies based on which the Government will be able to make a sound policy judgment regarding
the optimal legal and institutional design characteristics of the future insurance program.
C. Project Description Summary
1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown):

Indicative
Bank
% of
GEF
% of
Component
Costs
% of
financing
Bank
financing
GEF
(US$M)
Total
(US$M)
financing
(US$M)
financing
Component A: Strengthening of Emergency
10.90
5.3
8.18
5.5
0.00
0.0
Management and Risk Financing Capacity
Component B: Earthquake Risk Reduction
71.20
34.7
55.01
36.7
0.00
0.0
Component C: Flood and Landslide Risk
101.09
49.3
78.18
52.1
0.00
0.0
Reduction
Component D: Risk Reduction of Mining
15.25
7.4
5.48
3.7
6.24
89.1
Accidents in Tisza Basin
Component E: Project Management
5.21
2.5
3.15
2.1
0.76
10.9
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Total Project Costs
203.65
99.3
150.00
100.0
7.00
100.0
Front-end fee
1.50
0.7
0.00
0.0
0.00
0.0
Total Financing Required
205.15
100.0
150.00
100.0
7.00
100.0
The project consists of the following components and activities:
Component A: Strengthening of Emergency Management and Risk Financing Capacity ($10.90
million)
The objective of component A is to enhance the capacity of the Romanian authorities to better prepare for,
respond to and recover from natural or man-made disasters, through modernization of information
technology and communications systems, activities which would increase the planning and training efforts
of all levels of government, public awareness and preparedness, and complete technical feasibility work
and institutional framework for launching of the Romanian Catastrophe Insurance Program.
Component Summary:
·
Upgrading emergency communications at the national, regional and local level ($3.73 million)
·
Development of emergency management information system ($4.20 million)
·
Development of a Vrancea earthquake scenario ($0.78 million)
·
Public awareness program ($0.41 million)
·
Preparation of Catastrophe Insurance Program ($1.80 million)
Component B: Earthquake Risk Reduction ($71.20 million)
The objective of component B is to assist the Government in reducing the seismic vulnerability of priority
technical and social infrastructure through the retrofitting of key structures and institutional strengthening.
Component summary:
·
Strengthening of high priority public facilities ($64.42 million)
·
Design and supervision ($5.74 million)
·
Energy sector risk assessment (US$ 0.41 million)
·
Building code review ($0.25 million)
·
Professional training in cost-effective retrofitting methods ($0.38 million)
Component C: Flood and Landslide Risk Reduction ($101.09 million)
The objective of component C is to reduce flood risk and vulnerability in critical areas in Romania, to
improve safety of large and small dams so that these structures can function as designed, and to map and
model the risk of landslides in Romania in order to reduce losses and provide for better land use planning
tools.
Component summary:
·
Flood protection infrastructure ($28.94 million)
·
Danube River bank protection ($6.81 million)
·
Large dams safety ($49.43 million)
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·
Small dams safety ($15.22 million)
·
Landslide pilot area studies and monitoring manuals (US$0.69 million)
Component D: Risk Reduction of Mining Accidents in Tisza Basin ($15.25 million)
The development objective of this component is to reduce the risk of water and soil contamination and loss
of human and aquatic life from catastrophic mining accidental spills of pollutants. The global
environmental objective is to demonstrate and provide for replication for the reduction of catastrophic
accidental spills of transboundary pollution loads from mine operations flowing into the Danube and Black
Sea basins. In support of the above-mentioned development and global objectives, the project will assist in
the implementation of mitigation and hazard prevention activities. Two high-risk and high-priority sites,
Rosia Poieni and Baia Borsa mines, have been identified for hazard prevention interventions during the
initial phase of the project. These sites require emergency action. Additional sites for intervention will be
identified during project implementation. A key indicator of this component's success is the gradual
reduction in number and the negative impacts of mining accidental spills of pollutants into the Tisza Basin
and in the volume of toxic releases from mines downstream. The successful implementation of this
component will serve as a model for replication for reducing mining accident risks to human and aquatic
ecosystem health throughout Romania and other parts of the Tisza and Danube basins.
Component summary:
·
Establishment of a baseline and an environmental monitoring system ($0.87 million)
·
Hazard prevention and remediation interventions ($12.58 million)
·
Engineering and environmental guidelines for tailings and waste facilities ($0.22 million)
·
Regional mine spill disaster response system ($1.21 million)
·
Promoting transboundary cooperation on integrated water resources management for the Tisza
Basin ($0.37million)
Component E: Project Management ($5.21 million)
The component E will finance the costs of creation and maintenance of the Project Management Units to be
established in the respective ministries responsible for the related components (see section C.4).
2. Key policy and institutional reforms supported by the project:
The project will support the ongoing structural changes in emergency management in Romania - especially
the creation of effective linkages and coordination between the key institutions involved in disaster
management functions, both at the central and local levels. The project will contribute to this goal through
enhancing the technical, as well as institutional capacity of the Government to be better prepared for
natural and man-made disasters, through among others, provision of training programs to the
representatives of various functions that will be involved in responding to emergencies. The training will
focus on common procedures at each level of the government, including mutual aid agreements, standard
methods for gathering, analyzing and communication information, and procedures for requesting, receiving
and managing resources. The project will support modernization of communication and information
systems to enhance the ability of various operational agencies to communicate during emergencies, and to
collect, analyze, and share real-time data at the national, regional and local levels.
The GEF-funded component will support the Government to address environmental problems in the mining
sector; will further advance already initiated institutional dialog on basin-wide cooperation between
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Romanian organizations and those of other riparian countries; and will facilitate the development of a
regional policy of cooperation in the management of tailings and waste facilities in the Tisza and Danube
basins. This will strengthen recent and ongoing basin-wide initiatives directed towards integrated water
resources management, e.g., ICPDR, UNDP/GEF Regional Danube Project, EC Tisza River Basin Project,
UNECE Tisza River Basin Sustainable Development Project.
Other institutional changes intended to be facilitated by the project relate to the initial preparatory work for
creation of the future national catastrophe insurance pool. The project will support, among others, the
development of a specialized catastrophe insurance model for Romania that would be based on the country
specific analysis of hazards, and vulnerabilities of assets at risk, development of institutional and legal
framework for the program, as well as preparation of operational guidelines for the pool. The future
creation of the catastrophe insurance program managed by a specialized structure could assist the thinly
capitalized domestic insurance industry to better handle the accumulations of catastrophe risk, and will
provide a needed impetus for the development of the domestic insurance market.
3. Benefits and target population:
Significant public benefits deriving from the project include: a) strengthened government capacity to
respond rapidly in the face of disaster; b) increased earthquake preparedness with critical public facilities
retrofitted; c) reduction of risk for water pollution from mining operations; d) improved dam safety of the
selected priority structures; e) developed policy and technical foundations for creation of the national
insurance plan which would shift the financial burden of reconstruction from individual families and the
government to international re-insurers, capital markets, and the future insurance pool. Once effective risk
management measures are in place, economic and human losses will be reduced.
The project will particularly benefit the following groups of Romanian population through reducing the
chances of significant loss of life and property through natural disasters: a) those living along the seismic
Vrancea subduction zone, notably Bucharest's 2 million inhabitants, through increased earthquake
preparedness; b) people living in communities vulnerable to the risk of floods and landslides through
upgraded flood protection infrastructure and better mapping of the landslide risk areas; c) people living in
the areas adjacent to unsafe large and small dams; and d) people living in proximity to operating and closed
mines, particularly in Tisza basin, through reduced risk of mining accidental spills.
The Risk Reduction of Mining Accidental Spills in the Tisza Basin (component D) will also provide
transboundary benefits that will include: an integrated knowledge base about transboundary impacts of
mine-induced pollution in the Danube and Black Sea basins; improved understanding of mining accidental
spills impacts; accelerated risk reduction of degradation of the Black Sea and Danube River through
identifcation and implementation of a risk-based and effective remediation and prevention program for
tailings dams and waste dumps facilities in the Tisza Basin; establishment of a model for replication for
reducing mining accident risks to human and aquatic ecosystem health through other parts of the Tisza and
Danube basins; and accelerated adoption of best tailings facilities and mine waste management practices
throughout the Tisza and Danube basins.
Future implementation of the insurance program designed under the project will ensure that less advantaged
groups of the Romanian population have access to a reliable catastrophe insurance mechanism. The
possible creation of the insurance pool will also bring added benefits to the local insurance industry by
establishing of best practices in underwriting property risks.
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4. Institutional and implementation arrangements:
Duration of the Project. The implementation of the project is scheduled for 5.5 years, starting in mid-
2004 and ending in 2009.
Institutional Arrangements. The project will not create new institutions but will support the existing
government entities either by setting up Project Management Units (PMU) within their structures or
support implementation teams within their agencies. Each involved ministry will be responsible for
implementation of one project component. This implementing entities will have a full responsibility for all
technical aspects of the implementation, monitoring, financial management, as well as procurement. The
PMU located in the MTCT will be responsible for overall coordination and reporting including
consolidation of implementation progress reports and financial management reports for the whole project.
The project components will be implemented by the following executing agencies:
l
Ministry of Administration and Interior (MAI), for Component A
l
Ministry of Transport, Constructions and Tourism (MTCT) for Component B
l
Ministry of Environment and Water Management (MEWM) for Component C, and
l
National Agency for Mineral Resources (NAMR) for Component D
Component A (Strengthening of Emergency Management and Risk Financing Capacity) will be
implemented by a Project Management Unit (PMU) established within MAI structure, and staffed with
professional personnel, in charge of full implementation of the component, and reporting to the Minister, or
other official delegated by the Minister. The PMU will be located on the premises of the MAI or leased
office space, as appropriate and available. The staff will include director, financial and procurement
specialists, technical specialists in emergency management information systems and emergency
management, and administrative staff.
Component B (Earthquake Risk Reduction) will be implemented by the PMU established in MTCT and
reporting to the assigned State Secretary. The PMU will be in charge of full implementation of the
component and will be staffed with director, financial, procurement and administrative staff, as well as
specialists in structural engineering, monitoring and evaluation, and environmental protection. The MTCT
will be vested with a temporary ownership of buildings to be seismically retrofitted which are owned by
about thirty separate public legal entities.
Component C (Flood and Landslide Risk Reduction) will be implemented by the MEWM through its
existing agency, the National Administration "Romanian Waters" ("Apele Romane"). Although the
activities considered under sub-component C.2 and C.5 are currently under the authority of the MAFRD, it
was agreed between the two ministries that the respective activities will be carried out by the MEWM on
behalf of MAFRD and the resulting works subsequently transferred back to MAFRD.
"Apele Romane" will be responsible for implementation of component C through its staff (existing or
newly recruited). Project implementation agreement between MEWM and "Apele Romane" will be signed
before project effectiveness and will include clear provisions on rights and obligations of each party.
MEWM, through its Department of Water Management will retain the overall responsibility of project
implementation and reporting on the status of respective project sub-components. Designated technical and
financial specialists of MEWM, together with a procurement specialist recruited for the first two years of
implementation will form a small project monitoring team (PMT) for overview of project implementation
and reporting. All MEWM and "Apele Romane" staff involved in project implementation (except for the
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procurement specialist) will be financed from the budgets of these institutions. The procurement specialist
will be possibly financed from the loan proceeds, upon decision of MEWM.
Component D (Risk Reduction of Mining Accidents in Tisza Basin) will be implemented by the NAMR
through an existing PMU, currently in charge of implementation of a component of the Bank-financed
FY99 Mine Closure and Social Mitigation Project (MCSMP). The current staff of the PMU (i.e., Project
Director, Procurement Expert and Financial Manager) will be supplemented by an Accountant,
Communication, Technical and Environmental specialists, as well as support staff. The PMU will also hire
experts on-demand. The PMU will report directly to the President of NAMR. Through June 2005, the
PMU will continue to implement activities under the MCSMP in parallel with the GEF-component under
HRMEP project.
Project Steering Committee. A project Steering Committee consisting of Ministry of Administration and
Interior (MAI), Ministry of Environment and Water Management (MEWM), Ministry of Transport,
Construction and Tourism (MTCT), and National Agency for Mineral Resources (NAMR), and Ministry
of Agriculture, Forestry and Rural Development (MAFRD) will be established to oversee the
implementation of the project, to ensure efficient cooperation between the implementation agencies, and to
resolve critical issues that may arise during implementation. The ministries will be represented by the
assigned Secretaries of State. The committee will be chaired by MTCT.
Financial Management
The PMU established in the MTCT will coordinate the project's overall financial management
arrangements, develop the project's financial procedures manual, produce the project's financial monitoring
reports, organize the project's audit, and provide ad hoc advice to the other implementing entities as
required.
A Loan Agreement will be signed by the World Bank (IBRD) and the Government of Romania represented
by the Ministry of Public Finance (MPF). The MPF will also have subsidiary loan agreements with the
MAI, MTCT, MEWM and NAMR. MEWM will then sign a subsidiary loan agreement (implementation
agreement) with Apele Romane (National Administration Romanian Waters). In respect to component D,
the GEF Grant Agreement will be signed by the World Bank on behalf of the GEF, and the Government of
Romania represented by the MPF, who will also have a subsidiary grant agreement with the NAMR.
The diagram below shows the necessary legal agreements for the implementation arrangements:
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World Bank


Loan Agreement
GEF Grant Agreement


Government (repres. by


Ministry of Public Finance)
Subsidiary Loan Agreements
Subsidiary GEF Grant Agreement






Ministry of
Ministry of

Admin. and
Transport, Constr.
Ministry of
National Agency for

Interior
and Tourism
Environment and
Mineral Resources

Water Management

Implementation Agreement



National

Administration

Romanian Waters

(Apele Romane)


Strengths and Weaknesses
The strengths that provide a basis for reliance on the project's financial management systems include:
experience of already-identified accounting staff at the implementing entities; and the tried and tested
financial management systems of these institutions.
The weakness of the project financial management system and the way in which they will be addressed are
presented in the table below.
Significant Weaknesses
Mitigation Measure
Lack of experience in implementing
Workshop to explain the project's financial
Bank-financed projects in some of the entities
management requirements and disbursement
procedures
Lack of clarity regarding the project's financial The development of a project accounting
management requirements and disbursement
procedures manual and the conclusion of project
procedures
implementation agreements
No formally appointed project financial
Formal appointment and hiring of project financial
management staff at the PMUs in the MAI,
management staff at the PMUs in the MAI,
MTCT and MEWM
MTCT and MEWM
No project-specific accounting ledgers have
Establish project-specific accounting ledgers at
been established at the implementing entities
all implementing entities
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D. Project Rationale
1. Project alternatives considered and reasons for rejection:
An alternative approach to the multi-hazard mitigation project was to design an operation focusing on a one
type of natural hazard. This option has been rejected due to the fact that Romania is exposed to a range of
natural hazards occurring with a certain regularity. While some, like earthquakes are less frequent than the
others, e.g., floods, in a long run they both cause significant economic, and human losses. Also, the
man-made disasters, such as more recent accidents causing toxic spills, highlighted the urgent need for
mainstreaming environmental concerns and emergency mitigation, and preparedness. Therefore, instead of
choosing between specific hazards, the government decided to take the comprehensive and multi-hazard
approach. Also, a common platform for all types of emergencies is the need for effective emergency
management, which the project strives to strengthen through a number of measures it will support.
Development of separate operations based on the type of disaster was determined as inefficient as it can
lead to overlapping activities and lack of coordination. As explained in section B.3, the Bank team took a
comprehensive framework approach based on the experience gained in other similar operations through
providing complementary activities to the assistance being offered by other donors. The Romanian
government fully endorses this comprehensive approach which ensures coordination among various
programs.
The alternative of having one or a number of operations focusing on a type of disaster was also rejected
based on the international practice which indicates that coordinated disaster management brings better
results than the uni-sectoral approach.
2. Major related projects financed by the Bank and/or other development agencies (completed,
ongoing and planned).
Latest Supervision
Sector Issue
Project
(PSR) Ratings
(Bank-financed projects only)

Implementation
Development
Bank-financed
Progress (IP)
Objective (DO)
Environmental Labilities
Romania - Programmatic
Adjustment Loan (PAL)
Mine Closure in Socially and
Romania - Mine Closure and
S
S
Environmentally Sustainable Manner
Social Mitigation Project
Educational Infrastructure
Romania - School
HS
HS
Rehabilitation Project
Health Sector Infrastructure
Romania - Health Sector
S
S
Rehabilitation Project
Post-disaster Recovery, Risk
Turkey - Marmara Earthquake
S
S
Mitigation, and Management
Emergency Reconstruction
Project
Post-disaster Recovery, Risk
Turkey - Emergency Flood and
S
S
Mitigation, and Management
Earthquake Recovery Project
Post-disaster Recovery, Risk
Algeria - Ain Temouchent
S
S
Mitigation, and Management
Emergency Earthquake
Recovery Project
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Post-disaster Recovery, Risk
Poland - Flood Project
S
S
Mitigation, and Management
Post-earthquake reconstruction
Romania - Post Earthquake
Construction Project
Post-flood reconstruction and recovery Romania - Flood Recovery
Project
Other development agencies
UNDP
UNDP/GEF Danube Regional
Project
UNDP
Environment Emergency
Rehabilitation Coordination
Project and Emergency
Preparedness Project
UNDP
Mining "Hot Spots" project
UNDP
Emergency Assistance
EU
PHARE Cross Border
Cooperation Romania -
Hungary
EU
PHARE Cross Border
Cooperation Romania -
Bulgaria
EU
PHARE Catch-up Facility
EU
ISPA (Instrument for Structural
Policies for Pre-Accession)
EU
LIFE Nature and Environment
USAID
Destructive Water Abatement
and Control Project
UNEP
Risk Assessment,
Environmental Impact
Assessment for Accidental
Spills
ICPDR (International Commission for Identification of Pollution
the Protection of the Danube)
Sources
Italian Government (Ministry of
Rapid Environmental and
Environment) jointly with WHO
Health Impact Assessment for
Europe Center for Environment and
Tisza
Health
WWF (World Wide Fund)
Spill impact Assessment
IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)
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3. Lessons learned and reflected in the project design:
The Bank's previous experience with post-disaster assistance to a number of countries worldwide has
shown the need for a more pro-active approach, and the importance of mitigation activities, intended to
reduce the impact of future disasters and to decrease a burden on state budget usually resulting from such
event. The project introduces the hazard risk management instruments as main project activities. Bank
operations in the past were mostly designed as a response to disasters, with a main objective to contribute
to reconstruction and recovery efforts. E.g., the Bank had three post-disaster operations in Romania
following floods in 1975 and earthquake in 1977. Two complementary flood recovery projects financed
procurement of industrial assets (mostly equipment and spare parts) damaged by the floods, provided
support to affected farms, and small portion of the loan financed installation of flood warning system ($2.8
million). The Post-Eartquake Construction project financed imports of special machinery and spare parts
for the construction industry.
The World Bank is promoting a proactive and strategic approach for managing natural hazards in the ECA
region. It is premised on the fact that disaster prone countries should not be caught by surprise. Disasters
happen, and technological, social, organizational and financial remedies exist. Targeted assistance should
be provided in high risk areas before a disaster occurs. The institutional, technical, and financial capacity
for risk mitigation and emergency preparedness should be upgraded gradually. In addition, hazard risk
management needs to be mainstreamed into the national, regional, and local economic development process.
The underlying principle of the strategic framework is that both loss of life and economic impact of
disasters can be reduced by advance planning and investment, that it is cost effective to do so, and that this
is a government responsibility.
The HRMEP fully applies this approach by concentrating its support around the conceptual framework for
hazard risk management in ECA, which is based on the following five main pillars:
l
Risk Assessment
l
Emergency Preparedness
l
Investments in Risk Mitigation
l
Institutional Capacity Building
l
Catastrophic Risk Financing
Implementation of other disaster-related projects proves that the design should be to the extend possible
decentralized and take into account local implementation capacity. The proposed project implementation
structure relies on existing structures and takes into account Romania's capacity as demonstrated in other
Bank projects. The capacity of the Romanian institutions was also demonstrated during the project
preparation as the government developed the project contents and documentation with its own human and
material sources.
4. Indications of borrower and recipient commitment and ownership:
The Government of Romania has a very strong commitment to the project's objectives. The risks are widely
recognized by both the scientific community, and the authorities. Notable is the amount of work completed
by a number institutions in conceptualizing emergency management issues, and the level of scientific and
technical knowledge available in Romania.
The commitment of the government to the project is particularly well exemplified by the process of
prioritization and selection of investments to be supported from the loan. The involved ministries worked
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together in collecting and analyzing the existing data, preparing the necessary reports, and meeting at series
of workshops to discuss the presented proposals. Moreover, the governmental institutions invested their
own limited resources in preparation of feasibility studies, designs, and other documents, such as
environmental management plans, social assessment, etc. to prepare the project.
There have been many valuable efforts to enhance institutional capacity of the Government, academia and
private sector in the field. The governmental organizations have made substantial steps in setting up an
institutional framework for coping with disasters by creating central, sectoral, and local level commissions
with a mandate to coordinate response to the emergencies.
Current Romanian building codes are based on lessons learned from major earthquakes, especially the 1977
event. Enforcement of these codes seems to be efficient and does not pose a problem that would have to be
immediately addressed. The existing stock of public and private-owned buildings in Bucharest has been
evaluated and the government allocated funds for a loan program to support retrofitting of 123 privately
owned apartment buildings in Bucharest.
Authorities at both central and local levels demonstrate remarkable initiative when seeking international
assistance, e.g., from the European Investment Bank (EIB), US ExIm Bank, US Trade and Development
Agency (TDA), UNDP, EU PHARE, Japan International Cooperation Agency (JICA), Austrian
Government and the German Research Foundation. Romania has also entered into several cooperative
agreements with countries in the region, including Moldova, Bulgaria, Hungary, and Serbia and
Montenegro resulting in programs for exchange of information, and mutual assistance in the area of
disaster response and mitigation.
Lastly, the project was prepared with full participation and endorsement of the government, in terms of the
conceptual framework, activities to be supported, implementation structure, cost estimates and allocations,
as well as the project time table.
5. Value added of Bank and Global support in this project:
Lack of financial resources in Romania do not allow for implementation of necessary activities. The
Bank's expertise and financial assistance can leverage already undertaken as well as newly proposed
initiatives, and serve as a stimulating factor for other resources from international financial institutions and
bilateral donors.
The Bank accumulated significant experience in designing disaster management projects with a strong
focus put on disaster mitigation and emergency preparedness. The HRMEP team had previously delivered
comprehensive disaster-related projects, such as: Poland Flood Project (1997), Turkey Flood and
Earthquake Recovery Project (1998), Turkey Marmara Earthquake Emergency Reconstruction Project
(1999), and the Algeria Ain Temouchent Earthquake Emergency Recovery Project (2000). The proposed
project also draws from the worldwide experience of internationally recognized experts in this area.
There are many related projects , either completed or currently under way, of other donors and the Bank
can have a leading role by taking a more holistic approach and consolidating risk mitigation and emergency
preparedness efforts. The Bank is in a unique position among donors to retain an overall view and has the
ability to focus on policy, institutional capacity building, and the economic and social aspects of disaster
management measures.
In relation to the Risk Reduction of Mining Accidents in the Tisza Basin (component D), the Bank has
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assisted the Government of Romania formulate a Mining Sector Strategy, including the conduction of an
Environmental Assessment of the Mining, which highlights the safety of tailings facilities as one of the
highest environmental priorities for Romania. The main issue to address the safety of tailings facilities
involves financing. The proposed GEF-supported component would develop a comprehensive and
cost-effective approach to reduce the risk of tailings facilities so as to ensure limited financial resources are
used in the most efficient manner. The Bank is in a unique position to help the Government of Romania
synthesize experiences and lessons learned from this project, which could them be replicated in the
proposed FY05 Second Mine Closure and Social Mitigation Project, and assist the Government in
implementation of the new Mining Sector Strategy.
In addition, the Bank/GEF has built experience over the past decade involving numerous water-related
projects in the Black Sea and Danube River basin. The Bank/GEF can facilitate the sharing of experience
and lessons learned basin-wide in the formulation and implementation of programs for improving the
management and safety of tailings facilities.

E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8)
1. Economic (see Annex 4):
Cost benefit
NPV=US$ million; ERR = % (see Annex 4)
Cost effectiveness
Incremental Cost
Other (specify)
The project emphasis on risk mitigation and preparedness is based on the experience of other countries and
associated research which demonstrates that the losses from catastrophic events can be substantially
reduced when mitigation techniques and technologies are applied. Evaluating natural hazard mitigation is a
complex and difficult undertaking which is influenced by several variables. First, natural disasters affect
all segments of the communities they strike, including individuals, businesses, and public services as fire
brigades, police, utilities, and schools. Second, while some of the direct and indirect costs of disaster
damage are measurable, some of the costs are nonfinancial and difficult to quantify in monetary terms (e.g.,
human losses, social and psychological effects). Third, many of the impacts of such events produce "ripple
effects" throughout the community, thus increasing variables to be considered. Generally, the benefits from
the mitigation investments are the savings in losses that would otherwise have occurred, while costs to be
considered in economic analysis are simply costs of mitigation investments.
Because of inherent difficulties in empirically measuring all the disaster impacts, the project uses a set of
methods to evaluate net benefit or loss associated with the proposed measures. I.e., evaluation of flood risk
reduction activities was performed by analyzing probabilistic estimates of flood damages with and without
the project and calculating the IRR for the mitigation investments, as well as Benefit/Cost ratios. The
initial analysis indicates that the average IRR for flood defense and dams safety projects is 26%, while the
average B/C ratio is 2.2 (see Annex 4). In this context, it should be mentioned that in the course of the
project preparation, a focused training was provided to the Romanian specialists on the economic analysis
of the flood protection investments. The training was supported by the Bank-Netherlands Water
Partnership Program.
The prioritization of facilities to be strengthened under the Earthquake Risk Reduction (component B),
within each of the categories was agreed collaboratively: each ministry, being a legal owner of the facilities
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proposed for seismic retrofitting, was requested to participate with key staff, including sector experts (e.g.
education, hospitals, etc.), emergency response experts, economists and structural (earthquake) engineers.
The criteria for the ranking of facilities was based on the following considerations: Functional--criticality
to response and recovery operations; Social--life-safety and higher risk for the population; Economic
--cost effectiveness or cost-benefit analysis; Technical--feasibility and appropriateness of the retrofit
measures. At the implementation stage, the determination on the most cost-effective methods of retrofitting
will be made on an individual basis.
Component A (Strengthening and Upgrading the Emergency Response Capacity) has to be analyzed based
on the cost-effectiveness method. The improvement of response capacity has at its core a range of tangible
outcomes, including avoided loss of life, property and livelihood. The realization of these benefits,
however, is contingent on the situations in which response capacity comes into play, and it is not possible
to identify comprehensively all the scenarios that might arise with and without the project. Moreover, the
investments, such as the disaster management information system will be designed in such a way that can
support the day-to-day operations of the relevant institutions. Therefore, applying a cost-efficiency
approach to evaluating choices for improving the provision of emergency services and information is a
reasonable choice.
An incremental cost analysis was undertaken for the component D (Risk Reduction of Mining Accidents
in Tisza Basin) to be financed by the GEF grant, and is presented in Annex 11. The analysis estimates that
the difference in cost between the Baseline Scenario and the proposed GEF Alternative is US$18.53
million. Of this amount, it is expected that US$3.84 million would be contribution from the Government of
Romania, US$5.64 million from IBRD loan, US$0.26 million from the Austrian Government, US$1.01
million from USTDA and US$0.44 from NAMR and mine operators. An incremental cost of US$7.35
million will be incurred to achieve global benefits through the improved management and safety of tailings
facilities.

2. Financial (see Annex 4 and Annex 5):

NPV=US$ million; FRR = % (see Annex 4)

Fiscal Impact:
The investments in mitigation and emergency preparedness measures will have positive long-term effects on
the central and local budgets by reducing losses and damage to public and private assets occurring as result
of the catastrophic events and will decrease budgetary expenditure, which often are not fully accounted for
in the budget planning process and have to be accommodated from other categories in an ad hoc manner.
The project will contribute to fiscal savings by reducing the costs of reacting to disasters when they do
occur.
The committed Government contribution to the project is on average 23% which will mainly cover the
applicable taxes. This contribution in many cases, depending on the type of the intervention, will be shared
between the central and local governments. The demands upon the Borrower's fiscal resources will vary
over the years of project implementation, as indicated in Annex 5.
3. Technical:
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The project will support modern technology and equipment in such areas as: emergency response;
communications and information management systems networks; retrofitting; flood mitigation works; dam
rehabilitation; water pollution monitoring; and innovative prevention and remediation measures for mining
tailings and waste dams.
The Earthquake Risk Reduction component will assist the Romanian engineering community in application
of the modern performance-based structural designs for seismic retrofitting to satisfy defined design criteria
for earthquake loads, which will meet or exceed the current requirements of the Building Code of Romania.
In general, it was observed that throughout Romania recent structural retrofitting work applies
conventional methods conservatively, resulting often in over-design, in unnecessarily high material
consumption and with sometimes inappropriate architectural impacts. Through the project, the Government
wishes to introduce newer structural retrofit methods that are in use in other parts of the world. The project
therefore, includes an assessment of each facility to determine the most cost-effective method of retrofitting,
considering state-of-the-art methods such as base isolation, ductile vs. shear-wall designs, etc. In addition,
component B will provide a training and accreditation program that is aimed to improve the capacity of the
design community and their clients to better understand and apply the concepts of risk management and
cost-benefit analysis in their designs.
In the area of flood risk mitigation, the Romanian institutions and experts have remarkable knowledge and
experience. During project preparation, the feasibility studies for the flood defense works (component C),
and available designs were developed by local experts, and later reviewed by international consultants. The
technical approaches to the flood protection methods were fully endorsed by the Bank consultants, who
acknowledged viability of the proposed engineering methods. While the technical capacity for the flood
prevention work exists in Romania, the country lacks the financial resources to implement the planned
projects. Bank financial support accompanied by an independent review and supervision will be provided
under the project.
In regard to disaster management, Romanian ministries have operational responsibilities for specific
hazards, including monitoring, data collection and information analysis. For example, because of recurrent
floods in Romania, there is an advanced system for flood detection and warning, but this system is not
integrated into a comprehensive emergency management information system. Moreover, Civil Protection,
which is responsible for coordination of government actions during major emergencies, is not directly
linked to this system, and has minimal capabilities to manage the information provided to them by other
ministries, county and local governments. Because of this limited capability, effective use of resources is
reduced. Project component A (Strengthening and Upgrading Emergency Response Capacity) will support
development of a coordinated IT-based disaster information management system to collect, analyze and
share real-time data among emergency management agencies and key public officials at the national,
regional and local levels. The system will standardize the collection of data, facilitate its analysis at each
level, connect and integrate data sources and provide timely, accurate and coordinated information to
decision makers and operational agencies during natural or man-made crises.
With regard to the activities planned under the GEF co-financed Component D, the two sites selected for
the first phase of project implementation were identified as high-risk and high-priority sites by the
Government of Romania and were visited by the Bank preparation team. Pre-feasibility studies
commissioned by the two mine operators were reviewed by Bank consultants, which identified the most
important environmental and geo-technical problems. The studies proposed several measures to reduce the
risk for catastrophic releases of pollutant loads into the Danube and Black Sea basin, and were endorsed by
Bank consultants from Austrian and UK. The urgency of selecting the tailings dams facilities and waste
dumps associated with Baia Borsa and Rosia Poiani mines was confirmed by the Bank. Both sites pose
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major risks of failures with significant consequences to international waterways. The results of a
comprehensive risk assessment supported by field surveys and investigations will be used as the basis to
select the most cost-effective measures in the two proposed sites so as to ensure that available financial
resources are used in the most efficient manner. During project implementation, additional tailings facility
sites presenting the highest risk will be selected for remediation and prevention works. Feasibility studies
conducted according to best international practice will be soon be available as the basis for engineering
design. Feasibility studies and detailed designs, which will replicate the findings of the two pilot sites, will
be done in the course of project implementation. Detailed operation, maintenance and surveillance manuals
for all rehabilitated tailings facilities will be developed and put in place during project implementation.
Engineering and environmental guidelines for tailings and waste facilities that incorporate the principle of
"design for closure" and addresses seismic strength, resistance to flood events, capacity to collect runoff
water, etc. will be developed during project implementation.
The design of Component D (Risk Reduction of Mining Accidents) benefited from suggestions and
recommendations that emerged from a regional workshop on the management and safety of tailings
facilities in October 2003 that took place in Romania. Regulators, mine operators, local and international
experts provided very useful suggestions, including technical aspects, which were incorporated in project
design. In addition, this component is in line with the recommendations of the Scientific Technical Advisor
Panel (STAP) review. Annex 12 provides full detailed on the STAP review.
4. Institutional:
4.1 Executing agencies:
Ministry of Transport, Constructions and Tourism (MTCT). The Ministry will host the PMU for
component B (Earthquake Risk Reduction) and will be responsible for consolidation of financial and
implementation reports from the other three PMUs. The MTCT has had a leading role in project initiation
and formulation, has technically capable staff, and experience with retrofitting investments financed by the
Government. Moreover, the ministry played a crucial coordinating role during project preparation. In
carrying out the preparatory activities under component B, the MTCT has been working closely with all
relevant ministries and agencies responsible for respective categories of public facilities, and these tasks
will be further extended during project implementation. The ministry is one of the two implementing
institutions, along with NAMR, of the GEF PDF-B preparatory grant, gaining in this way some experience
with the Bank procurement and financial procedures. It is planned that the PMU will be additionally
trained in Bank procurement and financial management, and assisted by consultants, in particular, in the
first years of the project implementation.
Ministry of Administration and Interior (MAI). The Ministry will be responsible for implementation of
component A of the project (Strengthening of Emergency Management and Risk Financing Capacity). The
selection of the MAI for this role results from the ministry's key role in the country's disaster and
emergency management function, and general responsibility for the Civil Protection and the General
Directorate for Fire Fighting. The Ministry, as of June 2003, was merged with the Ministry of
Administration, which was already familiar with Bank requirements and procedures due to its central role
in another Bank-financed project, the Rural Development Project (P057960), now under implementation.
The project will additionally provide initial training and assistance for the implementing unit.
Ministry of Environment and Water Management (MEWM). The MEWM will execute all activities
related to the Flood and Landslide Risk Reduction (component C). The ministry's mandate includes flood
protection of urban and rural localities located along most internal rivers of Romania and for
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implementation of measures mitigating the risk of floods throughout the country. MEWM was assigned to
implement under the project also the activities related to Danube River bank protection and landslide risk
mitigation, which are under the statutory authority of the Ministry of Agriculture, Forestry and Rural
Development (MAFRD) but have been delegated to MEWM. These responsibilities will be executed
through a specialized entity - the National Administration "Romanian Waters" ("Apele Romane").
The National Administration "Romanian Waters" ("Apele Romane") has the following main
responsibilities: management of the national water resources, protection against floods and draughts;
monitoring of water quantity and quality. It has 11 river basin branches and local offices. Within the
scope of the project, the Apele Romane will carry out the activities financed under component C under
overall overview of the MEWM. The agency has particularly well skilled technical staff with experience in
implementation of investment projects financed by international donors such as: European Union
(PHARE), European Investment Bank, USAID, Council of Europe Development Bank, etc.
4.2 Project management:
The project will not create new institutions but rather support existing government entities by setting up
within their structures the PMUs which will draw upon the current institutional capacities, and by provision
of technical assistance, training, and consulting services which will enhance the technical capabilities for
implementation of the project. The PMU located in the MTCT will be responsible for consolidation of
financial and progress reports for the project.
Component C will be implemented by the MEWM through the Apele Romane, and the project staff will be
covered by its budget. The implementation units located in three other governmental agencies, MTCT,
MAI, NAMR, will be staffed with highly qualified staff selected in accordance with Bank procedures.
4.3 Procurement issues:
The procurement capacity assessment was conducted by Bank Senior Procurement Specialist. The findings
and recommendations of the assessment are included in the report, in Annex 6A and summarized below.
The PMUs located in the respective institutions will be responsible for procurement of works, goods, and
services for the relevant project activities, from preparation of the TOR, advertising, setting up the
evaluation committees, selection of the providers, processing signing of the contracts, monitoring, payments
to the contractors, among others. Three PMUs will have a Procurement Specialists and, if needed, a
Procurement Assistants. The procurement activities for component C will be carried out by the MEWM
through the staff of Apele Romane. The MEWM will be strengthened by employment of the Procurement
Advisor under the project. The PMUs will be responsible for obtaining no-objections from the Bank, where
prior approval is required.
This arrangement for the procurement function will ensure effective performance and building of capacity
in the Borrower's agencies. Procurement training will be provided under the project to the PMUs' and
Borrower agencies' staff.
Consulting services, goods and works financed or co-financed by the Bank will be procured in accordance
with the Bank's procurement guidelines.
4.4 Financial management issues:
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The financial management arrangements will need to be strengthened prior to Board presentation in
accordance with the action plan presented later in this PAD.
In respect to the WB projects implemented by NAMR, the Borrower is in compliance with its audit
covenants.
The formats of the FMRs and financial reports have been developed, agreed at negotiations and are
included in the minutes of negotiations and in the project's accounting procedures manual.
The first Country Financial Accountability Assessment (CFAA) for Romania was finalized in December
2003 and concluded that the overall fiduciary risk associated with the public financial management and
financial accountability arrangements of the Romanian government administration is considered to be
moderate, with the systems for accounting, financial reporting and internal control representing the areas
with the higher risks and budgeting, cash management and external audit and Parliamentary oversight
representing the lower risks.
The implications of the CFAA for the project are addressed by the following actions:
- A detailed review of the systems was performed for each implementing entity;
- Each implementing entity will have a distinct project-specific accounting ledger;
- Project accounting staff has been nominated for each implementing entity;
- Internal control and accounting procedures manual was developed for the project;
- The format of the FMRs and financial reports were agreed with all implementing entities;
- Workshop to explain the project's financial management requirements and disbursement procedures was
carried out on 03/25/2004;
- Regular training events for the project's accounting staff will be provided over the project life;
- The PMU within MTCT will be in charge of the reporting and auditing coordination;
- Project financial statements and financial statements of the National Administration Romanian Waters
(Apele Romane) will be annually audited by an independent auditor.
5. Environmental:
Environmental Category: B (Partial Assessment)
5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including
consultation and disclosure) and the significant issues and their treatment emerging from this analysis.
The envisaged investments are limited to modernizing communication and information systems (component
A), to retrofitting of existing critical public facilities (component B), rehabilitation and upgrading of flood
protection infrastructure, including investments in improving dam safety (component C), hazards
prevention and remediation works and other non-structural measures to improve management and safety
of mine tailings dams and waste dams (component D). No new structures are envisaged under the project.
Overall, the environmental impact of the project will be positive by reducing Romania's vulnerability to
floods and earthquakes, and by addressing both acute and chronic environmental degradation from mining
activities, which all cause substantial damage to the natural and man-made environment. Additionally,
component D will include measures that should result in a significant reduction of pollution risk to both the
Danube River and the Black Sea, which are international waters of worldwide significance.
The EMPs was prepared for project components B, C and D. For component B (Earthquake Risk
Reduction), a pool of buildings that meet agreed criteria was established during project preparation.
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During implementation, the final selection of candidate buildings will be made, followed by the design and
actual retrofitting. Although the exact buildings to be strengthened will not be identified until
implementation, the range of potential environmental impacts was assessed and a generic EMP has been
developed based on potential impacts of the planned interventions. The EMP includes the Environmental
Guidelines for activities under components B and D, which will be part of the Project Implementation Plan
(PIP).

The detailed environmental assessment and public consultations for all investments under component C
(Flood and Landslide Risk Reduction) were carried out. The proposed investments consist mostly of
rehabilitation of the existing flood defense schemes and dams, and will have no negative impact on the
environment. The assessment concluded that none of investments are located in environmentally sensitive
or protected areas. Also, no protected species that could be affected by the investments were identified.
All minor impacts that are limited to the period of construction works were identified and the measures to
mitigate them were elaborated in the generic EMP. During project design other sub-project specific
environmental issues may be identified. If this occurs, the design Contractor will revise the EMP
accordingly.
For component D which is funded by GEF (Risk Reduction of Mining Accidents in Tisza Basin), details of
the physical measures and interventions to reduce the risk of catastrophic mining accidents and continuing
release of contaminants from tailings facilities will be established as part of the engineering design. On the
basis of available pre-feasability studies, it is anticipated, that implementation of physical measures will
have no significant impact on the surrounding environment. Most disruption will be localized and of short
duration, since most of the construction works will be done at mining company property and on the site of
existing tailings dams and waste dumps facilities. During project preparation, a framework EMP was
developed by the Romanian counterpart. This framework EMP takes into account possible environmental
impacts, mitigation measures and monitoring activities.
5.2 What are the main features of the EMP and are they adequate?
The component-specific parts of the EMP prepared by the Romanian counterparts were reviewed and
found acceptable by the Bank. The EMP identifies investment-specific potential environmental impact,
includes mitigation plans (measures to be taken to control potential impacts and responsible party),
monitoring plans (parameters to be monitored, responsible party, timing, and tools for monitoring),
regulatory framework for environmental protection, and institutional arrangements for environmental
management. The EMP comprises the mitigation plan, monitoring plan and institutional arrangements
which specifies the identified issues, mitigation measures, and responsible institutions. Detailed EMP for
project component C include minutes of the consultation meetings.
5.3 For Category A and B projects, timeline and status of EA:
Date of receipt of final draft: November 24, 2003


5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA
report on the environmental impacts and proposed environment management plan? Describe mechanisms
of consultation that were used and which groups were consulted?

Public consultations for the flood protection and dam safety investments were conducted in May-June
2003. Prior to the meetings, the draft EMP and specific technical information on the investments were
disclosed in Romanian at publicly accessible places, such as libraries, city halls, etc. People living in the
project areas, as well as NGOs were invited to the meetings through the local radio announcements and
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press advertisements. Minutes of all meetings were prepared and attached to the EMP. The planned
investments did not raise any objections nor controversies. In fact, the projects are keenly supported by
the population living under the risk of floods.
Consultations for the seismic retrofitting investments will be conducted in the implementation phase, when
the facilities are finally selected out of the prioritized pool of public buildings. The consultation process
will be initiated once designs are ready and detailed methods of specific retrofitting works are known. At
that stage, the environmental permits will be required by the Romanian regulations for the investments .
For the pilot prevention and remediation intervention program under component D (Risk Reduction of
Mining Accidents in Tisza Basin), once the technical measures are known, the feasibility studies and
detailed designs and environmental assessments will be completed, the public consultation meetings will
take place, and will be monitored by the PMU. In accordance with the Romanian legal requirements,
environmental permits will also have to be obtained at that time.
The framework EMP for the project was disclosed in public places prior to the project appraisal and no
objections were expressed.

5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the
environment? Do the indicators reflect the objectives and results of the EMP?
Monitoring data will be collected by the PMU offices, supervision consultants, and regional offices of the
Apele Romane Water Directorates (for the flood prevention projects) from the project districts. The
gathered information will then be reported monthly to the PMU. Results of the data analysis will be used
to verify effectiveness of mitigation measures, and if required, to revise/modify the mitigation plan. In
addition, the activities supported by the component C will have an Environmental Advisory Group which
will consist of foreign experts and will be funded by the project. The PMU Environmental Specialist hired
under the project will prepare quarterly environmental reports for the implementing agencies' and World
Bank's review.
The EMPs specify mitigating measures for all significant environmental issues, and the main environmental
parameters to be monitored during the implementation. Generally speaking, these are the following: dust
and noise at the construction site, collection and disposal of solid wastes, recycling of the excavated
material, construction material transportation and supply, vegetation at the sites; and for the flood
protection works additional monitoring parameters are: changes in river course and river bed, river
discharge, structural status of refurbished dam or dyke, water pH and temperature, TDS, sediments,
dissolved oxygen, etc.
6. Social:
6.1 Summarize key social issues relevant to the project objectives, and specify the project's social
development outcomes.
Social outcomes of the project are expected to be positive. One of the key social development outcomes
will be a decreased vulnerability of the population at risk to natural disasters and water pollution accidents
from mining activities, which will be achieved by strengthening the institutional and technical capacity for
disaster management and emergency response; risk reduction measures for floods, and earthquakes;
improved safety of selected dams; preparation of a framework for the national disaster insurance system;
and mitigation of environmental impacts of accidental spills and release of hazardous materials in the
Danube River and Black Sea Basins.
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The Social Assessment conducted by the Romanian counterparts during the project preparation
concentrated particularly on the flood mitigation and dam safety investments. The Social Assessment
included a site-specific stakeholder analysis. Its findings indicate that the investments will have a very
positive social impact and will considerably improve the living conditions of the people settled in the areas
affected by floods or endangered by the unsafe dams. The assessment shows that the lack of the adequate
flood protection facilities has led to social problems resulting from disruption in the people's lives and
material losses, particularly severe for poor people who cannot afford to move to safer areas. The
authorities have been urged for many years to improve the situation and undertake the much needed
measures. However, the local financial means for building or rehabilitation of the necessary facilities have
been so limited that works have been delayed for decades.
In particular, the social impact of the project can be categorized as follows:
l
Improved earthquake, flood, and landslide protection, reducing potential damage of public and private
buildings, as well as agricultural land,
l
Reduced risk of dam breakage,
l
Increased production of electricity from the rehabilitated dams,
l
Improvement of water supply, the quantity and quality of drinking water, industrial water use and for
irrigation,
l
Increased attractiveness of the project areas to business, including tourism,
l
Subsequent employment opportunities,
l
Reduced Danube River bank erosion causing damage to agricultural land;
l
Assurance of operation of public facilities located in the seismically vulnerable areas;
l
Reduced risk of water pollution from mining operations in Tisza basin.
The Social Assessment confirmed that it is not anticipated that the project will have any adverse social
impact. There will be no need for resettlement, nor private land acquisition. During the implementation
phase, social monitoring and consultation will be an integral part of review of the ongoing activities.
6.2 Participatory Approach: How are key stakeholders participating in the project?
Many of the proposed flood mitigation investments have been developed during a period of several years
and in most of the cases, public meetings and discussions were already carried out before the Bank project
preparation. The meetings were attended by local authorities, designers, representatives of the local
branches of Apele Romane, SNIF, other ministries, and water, gas, power companies, and the local
population directly affected by the investments.
During project preparation, another round of public meetings was held in May - June 2003, to discuss
alterations in the designs made during the planning phase and to provide the affected population and the
involved economic players with a clear understanding regarding the timing of the construction and the
expected results of the project on their communities, with the possibility to share views and propose
changes. In the course of the meetings all of the proposed flood mitigation and dam safety investments were
endorsed by the local population and authorities.
In the case of other project components, there have been a series of meetings with key institutional
stakeholders, including, central and local offices of the relevant ministries (MEWM, Apele Romane,
MAFRD, NAMR, SNIF, MTCT, MAI, MOH, MOCC, Ministry of Economy and Commerce, local
municipalities). These stakeholders were consulted and their views were incorporated into the selection of
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priority investments. The public consultation meetings will be carried out for components B and D once
the specific investments are selected in the beginning of the implementation phase.
The identified stakeholders relevant to GEF-supported component objectives are the following: mining
operators; local communities; international and local NGOs (e.g., WWF); environmental, mineral
resources, and civil protection agencies; the International Commission for the Protection of the Danube
River (ICPDR); and the European Commission and donors with interest to co-finance project activities.
The table below summarizes a preliminary Public Participation Involvement plan, which will be finalized
prior to project implementation.
Stakeholder
Identification / Implementation
O&M/Monitoring
Preparation
Mining operators
IS/CON/COL
IS/CON/COL
IS/CON/COL
Local communities
IS/CON
IS/CON
IS/CON
NGOs
IS/CON
IS/COL
IS/COL
Environmental, mineral
IS/CON/COL
IS/CON/COL
IS/CON/COL
resources, and civil
protection agencies
ICPDR
IS/CON
IS/CON/COL
IS/CON
EC and other donors
IS/CON
IS/CON/COL
IS/CON/COL
Legend: IS=Information sharing; CON=Consultation; COL=Collaboration; O&M=Operation and
Maintenance

6.3 How does the project involve consultations or collaboration with NGOs or other civil society
organizations?
NGOs were invited to all public consultations meetings carried out during project preparation and none of
them expressed concerns related to the proposed investments. At the implementation stage, the involvement
of NGOs will be considered particularly in the project activities related to the emergency preparedness
public awareness programs. NGOs may be involved in the design and implementation of locally based
disaster awareness programs to educate communities at high risk about effective measures that can be
taken prior, during, and after an emergency.
6.4 What institutional arrangements have been provided to ensure the project achieves its social
development outcomes?
The PMU budgets provide for periodical monitoring and evaluation, including social reviews. The
monitoring and evaluation system will ensure that the project elements can be adjusted in order to achieve
its social development goals.
6.5 How will the project monitor performance in terms of social development outcomes?
The social development outcomes will be monitored as part of the M&E activities envisaged under the
project. In order to strengthen social monitoring and ensure that the social outcomes are achieved, the
PMUs will hire a Monitoring and Evaluation Specialist, with a social science background, who will be
responsible review of these aspect of the project. The Social Scientist's activities will include: preparation
of the M&E reports, visits to the project sites, conducting interviews with the stakeholders, and proposing
additional studies, if needed.
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The component-specific performance indicators will include the social considerations as an integral part of
the overall outcomes. In addition, the periodical surveys, focus groups, interviews with the affected
population will be conducted in the project areas by the PMUs and independent consultants.
7. Safeguard Policies:
7.1 Are any of the following safeguard policies triggered by the project?
Policy
Triggered
Environmental Assessment (OP 4.01, BP 4.01, GP 4.01)
Yes
No
Natural Habitats (OP 4.04, BP 4.04, GP 4.04)
Yes
No
Forestry (OP 4.36, GP 4.36)
Yes
No
Pest Management (OP 4.09)
Yes
No
Cultural Property (OPN 11.03)
Yes
No
Indigenous Peoples (OD 4.20)
Yes
No
Involuntary Resettlement (OP/BP 4.12)
Yes
No
Safety of Dams (OP 4.37, BP 4.37)
Yes
No
Projects in International Waters (OP 7.50, BP 7.50, GP 7.50)
Yes
No
Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)*
Yes
No
7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies.
Environmental Assessment
The Environmental Assessment in accordance with requirements pertinent to category B projects was
conducted by the Borrower and reviewed by the Bank team. The Loan and GEF grant agreements include
covenants calling for the implementation of the prepared Environmental Management Plans for components
B, C, and D. The Bank will monitor the adherence to the EMP as part of its supervision activities.
Cultural Property
Under component B (Earthquake Risk Reduction), some of the facilities identified for seismic retrofitting
are classified by the Romanian authorities as historical monuments. The project will assist the GOR in the
preservation of these cultural heritage structures which at the same time have essential public functions
(e.g., city halls, universities, etc). The EMP prepared by the MTCT for this component includes provisions
for preservation of the all architectural and cultural qualities of these structures along with a system for
monitoring the retrofitting works to ensure compliance with Romanian laws on the preservation of cultural
property.
The Romanian regulations are very clear on the required actions and will be enforced throughout the
lifetime of the project. This includes a system of permits provided by the Ministry of Culture and Creeds
(MCC) and ensuring that designs and works are subject to expert review and supervision by certified
specialists in the field of historical buildings preservation. A Law #422 of 2001 governs the protection of
historic monuments, setting forth institutional roles and responsibilities. The Ministry's Directorate of
Historic Monuments must approve all technical documentation for buildings that are officially listed, and
can call specialists as members of a Consultative Board, as needed. Designers, contractors and site
supervision engineers working on an investment project that involves an historic monument must be
pre-certified and listed by the MCC. 125 designers are listed in Romania for this purpose. For the project,
MCC and MTCT have appointed a working group to enable timely review and discussion of project
investments in order to avoid bureaucratic delays in the approval process. Moreover, during the
implementation stage, the already existing technical designs will be reviewed by consultants and modern
methodologies and technologies that preserve cultural features of the facilities will be used for
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strengthening.
Projects in International Waters
The project will, among other activities, support improvement of flood protection schemes in Romania,
some of which are located at international waterways. The Bank's safeguard policy concerning Projects on
International Waterways O.P. 7.50 therefore applies.
Based on technical assessment carried out by the Bank team's consultant, none of the project activities
would adversely change the quality and quantity of river water flows in the riparian countries and all of
them fall within the exemption to the notification requirement under paragraph 7(a) of OP 7.50. However,
bilateral agreements with Ukraine, as well as with Serbia and Montenegro contain provisions requiring
notification. Although a formal bilateral agreement has not been signed yet between Romania and Moldova,
a practice of mutual notification about planned works on hydraulic structures located on the transboundary
waters is established. Therefore, the Romanian Government sent on November 13, 2003 the relevant
notifications to the Government of Moldova, the Government of Ukraine, and the Government of Serbia
and Montenegro with the information on the three investments planned under the project, and requested
their clearance. The approach is consistent with paragraph 5 of the OP 7.50.
Authorities of Moldava, Ukraine, as well Serbia and Montenegro have sent positive responses to the
Romanian authorities with regard to the proposed activities.
Safety of Dams
The Romanian Government and technical agencies recognize that although dams and their associated
reservoirs have enormous economic benefits, they also induce risk to the population situated downstream
which could be affected by the uncontrolled spillage of water from the reservoir in a case of dam failure or
technical accidents. The Romanian authorities are also aware that the most important factor in lowering
this risk is maintenance of dam safety levels at least within the limits imposed by the technical and
legislative regulations in force. Furthermore, the safety of a dam must be ensured at all stages of dam
existence, namely: design, construction, and operation. In order to fulfill these requirements the
Government has defined safety management measures as:
·
for dams under design stage: ensuring that the norms/standards and regulations in force as regards
safety are strictly adhered to;
·
for dams under construction: the quality conditions stipulated by the standards and by the technical
specifications are adhered to and checked for quality control;
·
for dams being under operation: the continuous assessment of the safety through extensive
monitoring of the dam and its associated structures.
In Romania, the dam owner has ultimate responsibility for all aspects of dam safety. If the dam fails to
meet the safety requirements, safety improvements shall be carried out as appropriate, including
construction works, nonstructural measures, improvement of the operation and surveillance of the dam, and
the provision of emergency preparedness. All the actions taken by the dam owner in order to make the dam
safe and to protect people are included in a safety program. The main goals of the program are to minimize
probability of the loss of life, to minimize the probable economic losses, and to reduce probability of failure
to a practically irreducible level.
The first two goals can be achieved through preventive actions. If a dam incident is found developing
towards failure, and the failure would endanger human life or cause significant property damage, it is an
imperative to promptly alert public and safety officials responsible for evacuating residents who would be
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affected.
As far as the third goal is concerned, effective measures that reduce the probability of failure of the dam
are specifically defined for the three main stages: design, construction and operation. Adequate norms and
guidelines, based on experience are required to provide a safe design, appropriate for the site conditions.
Observing the technical specifications and relying on a strict quality control system are the means for safe
dam construction. Finally, the provision of an adequate monitoring system will protect the dam from a
catastrophic failure.
The system for safety of dams established in Romania is in detail described in the "Dam Safety Assessment
Report" available in the project files. The table below summarizes main findings of that report.
Dam Safety Safeguard
Romanian System
Compliance with Bank
Requirement
Safeguards
Appointment of POE for
National Dam Safety
Satisfactory. Adequate laws,
design and construction
Commission (CONSIB) is the
regulations and standards are
quality assurance
consulting arm of the
in place. The qualifications of
government and uses
national members for the panel
considerable number of highly
are adequate and panel
skilled dam experts, on behalf
members are independent.
of the Government for all dam
International experts will be
design, construction and
recruited to strengthen the
rehabilitation to ensure safety
panel with particular reference
by the use of design,
to tailings dams and risk
construction and impoundment analysis.
permits.
Monitoring Instrumentation
Monitoring instrumentation is
Satisfactory. The design
part of design
part of the design of all dams.
requirements, standards and
norms are adequate.
Preparation of EPP
EPPs are prepared as required by The standards and norms for
(Emergency Preparedness
the law and have to be approved preparation of the EPP are
Plan)
by Government.
adequately defined in the
regulations.
The EPPs for the dam
investments were reviewed and
found to be in compliance with
OP4.37.
Preparation of O&M plan
O&M plans and EPPs are
The O&M plans for each dam
before completion of project prepared and approved by
investment were reviewed, and
Government.
the staffing and budgetary
allocations were found
satisfactory.
Dam safety surveillance and The Romanian legislation
In all dams proposed for
inspections after dam is
requires three levels of
rehabilitation, the
completed
surveillance system.
instrumentation system will be
rehabilitated. Surveillance needs
substantial improvement in the
case of tailings dams.
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Implementation of O & M
Romanian law requires
Satisfactory. Implementation
and EPP
implementation of EPP and
of the upgraded O&M plans
O&M plans.
and EPPs are incorporated in
the loan and GEF grant
agreements as legal covenants.
During appraisal of the project, Bank team reviewed the Dam Safety Plans for each large dam financed
under the project. The plan consisted of i) plan for construction Supervision and Quality Assurance, ii)
instrumentation plan, iii) operation and maintenance plan, and iv) and emergency preparedness plan.
The dam safety plans were assessed as satisfactory. During project implementation the following measures
will be taken:
a)
All dams have a construction supervision plans which require the appointment of a qualified
independent engineering supervisor whose work is reviewed and evaluated by the State Inspection for
Quality of Works at critical stages of the project. Acceptance of the final works is by the National Dam
Safety Commission who issue a license for impoundment and operation.
b)
In all dams proposed for rehabilitation, the instrumentation system will be rehabilitated and new
instruments will be placed as required for safe monitoring of the structure. The instrumentation plan is
reviewed by the CONSIB to ensure that adequate monitoring can be performed. Monthly monitoring
reports (consolidated daily data) are sent Territorial Apele Romane Offices for review, are consolidated as
annual monitoring reports and are reviewed by the Monitoring Commissions for safety of the dams.
c)
All the dams have an operations maintenance plans which is generally reasonably comprehensive.
They cover all regular operation and emergency requirements. The plans also have detailed Emergency
Preparedness Measures. However, all plans may need to be upgraded with the rehabilitation of the dams.
d)
All dams supported under the project have an EPP as required by the law. Presently, all the dams
have inundation maps in the event of failure. Present warning system consist of sirens (90% of the
downstream sites) and electronic communications to local government. The warning systems are presently
run by the dam operators and local government. Local governments are required to make all preparations
each year for any possible hazard in the wet season and spring when there is high flow in the rivers.
Almost all existing equipment will be upgraded or newly established with support of the project.
Dam safety specialists, with proven international experience, will be recruited, under terms of reference
satisfactory to the World Bank, to supplement the Panel of Experts. Also international specialists will be
hired to strengthen the tailings dams and waste facilities review.
Involuntary Resettlement
No involuntary physical displacement or relocation of people and their properties will be necessary in order
to implement the investments planned under the project.
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F. Sustainability and Risks
1. Sustainability:
The key factor critical for sustainability of the project benefits is an understanding and commitment on the
part of Romanian authorities, both at central and local levels, to the need for introduction of measures
included in the HRMEP project. In fact, most of the project-supported measures were demanded and
predefined by the Romanian counterparts. Borrower commitment to the project was clearly demonstrated
during the preparation phase, when the counterpart agencies were developing necessary feasibility studies
and other required assessments carried out at the Government's expense. Maintenance and operation
project investments, in the case of the retrofitted structures, will be ensured by the public entities who are
the legal owners of the buildings to be seismically strengthened. For the flood protection investments,
budgetary sources will cover the maintenance and operation costs. In both cases, the risk of lack of
post-project support is low. Realization of the risks involved if the recommended activities are not
implemented and sustained, constitutes the strongest incentive for the executing institutions and other
stakeholders to promptly initiate the outlined activities and to continue their support and sustain the benefits
deriving from the project.
Capacity building in the area of risk mitigation and emergency preparedness is a critical part of the project,
targeting governmental entities, public institutions and local communities. By the end of the project, these
stakeholders will be able to implement the necessary measures and further replicate internationally endorsed
practices. Material support provided by the project in the form of infrastructure, retrofitted key public
buildings, modernized communication, etc. will be in place to make effective use of the acquired skills. The
existing level of scientific and technical expertise in Romania provides assurance that benefits of the project
are not only sustained but even further advanced in the future.
One of the key factors for the long-term sustainability of the benefits of the GEF-supported component is
the commitment of the Romanian authorities to implement the activities included under the project. Since
the project is being prepared at the request of the Romanian Government, and Romanian counterparts at the
central and local levels are involved in its preparation, it is very likely that their support will continue to
sustain the benefits derived from the project, namely the reduction of the vulnerability to water pollution
accidents from mining activities. Romania is also committed at the international level to clean up and
protect the Danube and Black Sea basins, and efforts are being made to integrate interventions that
addresses transboundary water pollution with efforts that help Romania to meet EU environmental
directives. Thus, it is very likely that the project benefits will be further advanced in the future. Capacity
building in the area of public awareness and preparedness for emergencies from the mining industry at the
local level is also a critical element of the project. Local stakeholders will demand adoption of
environmentally sound tailings management practices at the end of the project.
Capacity building and capacity enhancement at the level of the mine operators and local environmental
authorities in the area of environmental monitoring is another critical element of the project. If the project is
successful in achieving this goal, environmental monitoring should continue with no external support once
the project is over. Commitment will be sough from the Government to provide the necessary funding to
operate and maintain the monitoring system on the long-term. There is some assurance that budget
resources will be made available to operate and maintain the system since Romania is moving forward with
EU accession and the country needs to demonstrate compliance with EU environmental requirements.
1a. Replicability:
The GEF-supported Component D will help demonstrate and provide for replication of the reduction of
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catastrophic accidental spills of transboundary pollution loads from mine operations flowing into the
Danube River and Black Sea basins. A second World Bank Mining Closure and Social Mitigation Project
(under preparation and scheduled for FY05) will be the vehicle for replication of prevention and
remediation works for improving the management and safety of tailings dams and waste dumps in other
critical mine sites located through out Romania. Funds under this new project will be earmarked for this
purpose. The successful implementation of Component D will serve as a model for replication for reducing
mining accident risks to human and aquatic ecosystem health throughout Romania and other parts of the
Tisza and Danube basins.
2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1):
Risk
Risk Rating
Risk Mitigation Measure
From Outputs to Objective
Organizational changes in the government
M
The project includes measures which will
adversely affect emergency response
strengthen the response system capacity.
system.
The project design does not require institutional
changes and builds on existing structures.
Results of the component D activities are
M
Romania has undertaken significant
not replicated throughout the Romanian
international commitments and EU accession
portion of the Tisza basin and other parts
conditions will require Romania to comply with
of the country
EU environmental directives and introduce
necessary measures for improving the
performance of the mining sector. The Bank will
continue a dialogue at the regional level on the
benefits of risk reduction of catastrophic mining
accidental spills on the Danube and Black Sea
basins.
From Components to Outputs
Counterpart funds are not available in a
M
The Loan/Grant Agreements will include
timely manner
appropriate stipulations requiring timely
provision of counterparts funds.
Implementation structure is not put in
M
The Bank team will closely supervise the project
place with a capable staff
implementation, particularly at its early stage,
and the TA to the PMUs' staff will be provided.
During the project preparation, the line
ministries provided qualified and skilled teams
to work on the required tasks.
Overall Risk Rating
M
Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk)
3. Possible Controversial Aspects:
None.
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G. Main Conditions
1. Effectiveness Condition
2. Other [classify according to covenant types used in the Legal Agreements.]
Project Management
l
During project implementation, the Government would maintain the PMUs within the MAI, MTCT,
and NAMR with staffing and resources that are adequate for effectively implementing the project and
that are acceptable to the Bank. MEWM shall ensure that "Apele Romane" has adequate staffing and
resources required for implementation of their respective parts of the project.
l
The Government shall maintain a Project Steering Committee comprising representatives of MAI,
MTCT, MEWM, MAFRD and NAMR at the level of Secretary of State, which shall be responsible
for overseeing project implementation and coordination between project executing agencies. The
Steering Committee is chaired by MTCT.
l
The Borrower through implementing agencies shall take all necessary measures to implement the
project in accordance with a Project Implementation Plan (PIP), and shall not amend, suspend,
abrogate, repeal or waive any provisions of the PIP without prior approval of the Bank.
l
The mid-term review of the project will be carried out in February 2007.
Dam Safety
l
The Borrower through MEWM will assign and maintain an independent Dam Safety Panel within
CONSIB. The Panel of Experts (PoE) will undertake periodic reviews of the designs and technical
specifications, and advise on dam safety related issues during implementation. The updated dam safety
reports will be submitted to the Bank for review and comments.
l
For each dam, the Borrower through MEWM, will prepare, one year prior to completion of
rehabilitation works, a program for operation and maintenance (O&M), and a surveillance plan by a
group of independence experts satisfactory to the Bank.
l
For each dam, the Borrower through MEWM, will prepare, one year prior to completion of
rehabilitation works, an updated Emergency Preparedness Plan (EPP) satisfactory to the Bank.
Environmental Management Plan
l
The Borrower shall ensure that all measures necessary for carrying out the provisions of EMP shall be
undertaken in a timely manner.
Financial Management Conditions and Covenants
Financial Covenants
l
Each of the project implementing entities will maintain a financial management system acceptable to
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the Bank. The project's financial statements, withdrawal applications and Special Accounts will be
audited by independent auditors acceptable to the Bank and on terms of reference acceptable to the
Bank. National Administration Romanian Waters (Apele Romane) financial statements will be audited
by independent auditors acceptable to the Bank and on terms of reference acceptable to the Bank. The
annual audited statements and audit reports will be provided to the Bank within six months of the end
of each fiscal year.
Disbursement
l
In relation to sub-components C.2 ­ Danube River Bank Protection, and C.5 ­ Landslide Pilot Area
Studies and Development of Monitoring Manuals, the first disbursement will be made only upon
submission to the Bank of an official letter from the Government of Borrower that the Ministry of
Environment and Water Management has been assigned as an agency responsible for implementation
of the said sub-components of the Project.
H. Readiness for Implementation
1. a) The engineering design documents for the first year's activities are complete and ready for the start
of project implementation.
1. b) Not applicable.
2. The procurement documents for the first year's activities are complete and ready for the start of
project implementation.
3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory
quality.
4. The following items are lacking and are discussed under loan conditions (Section G):
I. Compliance with Bank Policies
1. This project complies with all applicable Bank policies.
2. The following exceptions to Bank policies are recommended for approval. The project complies with
all other applicable Bank policies.
Christoph Pusch
Marjory-Anne Bromhead
Anand K. Seth
Team Leader
Sector Manager
Country Director
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Annex 1: Project Design Summary
ROMANIA: HAZARD RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT
\
Key Performance
Data Collection Strategy
Hierarchy of Objectives
Indicators
Critical Assumptions
Sector-related CAS Goal:
Sector Indicators:
Sector/ country reports:
(from Goal to Bank Mission)
Improved national
Improved hazard mitigation
Country reports (Country
Romania maintains its
preparedness for natural
and emergency preparedness. Economic Memorandum
commitment to reduce natural
disasters.
Retrospective, CAS Updates, hazards risks and to bring up
EU reports).
the emergency preparedness
to the EU and international
standards.
GEF Operational Program:
Outcome / Impact
Indicators:
International Waters
Improved safety of mine
Annual Reports of the
Romania maintains its
Operational Program No. 8,
tailings facilities.
International Commission for commitment to GEF and
Waterbody Based Operational
the Protection of the Danube international community in
Program: Improve water
Increased adoption of best
River (ICPDR).
adopting measures to reduce
quality of the Danube and
mine waste management
pollution to Danube and
Black Sea Basin.
practices throughout the Tisza Danube Accident and
Black Sea.
and Danube basins.
Emergency Warning
Systemmaintained by ICPDR.
Integrated knowledge base
about transboundary impacts Danube and Black Sea water
of mine-induced pollution in quality monitoring reports
the Danube and Black Sea
prepared by ICPDR and the
basin.
Black Sea Commission.
Increased transboundary
cooperation for integrated
water resources management.
Project Development
Outcome / Impact
Project reports:
(from Objective to Goal)
Objective:
Indicators:
The overall objective of the
l Strengthened institutional Project Supervision Reports.
Government sustains its
project is to assist the
and technical capacity for
commitment to the project
Government of Romania in
emergency management Project mid-term review.
objectives and continues to
reducing the environmental,
and emergency response
give an appropriate attention
social, and economic
through upgrading
Monitoring activities of the
to disaster mitigation and
vulnerability to earthquakes
communication and
implementing line ministries management.
and floods, and demonstrate
information systems.
and agencies.
approaches to risk reduction
l Increased earthquake risk
of catastrophic mining
mitigation with some key,
accidental spills of pollutants.
prioritized public
facilities retrofitted.
l Increased level of flood
protection with some
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high priority investments
implemented.
Global Objective:
l Improved dam safety of
the selected priority
Demonstrate and provide a
structures.
model for replication for the
l Gradual reduction in
reduction of catastrophic
number and negative
accidental spills of
impacts of mining
transboundary pollution loads
accidental spills of
from mine operations flowing
pollutants into the Tisza
into the Danube and Black
Basin and in the volume
Sea.
of toxic releases from
mines into the Danube
River.
l Improved factors of safety
in tailings facilities and
increased standards in
risk awareness and
emergency preparedness.
Output from each
Output Indicators:
Project reports:
(from Outputs to Objective)
Component:
A. Improved emergency
l Modernized
Progress reports provided by
Organizational changes in the
preparedness and
communication and MAI.
government do not adversely
management system;
information
Supervision mission reports.
affect emergency response
completed groundwork for
management systems Bank project evaluation (ICR) system in the country.
subsequent public policy
are designed,
decisions in the area of
procured, and
Political commitment and
financial risk transfer.
implemented with a
dedication of sufficient
daily use, national
technical capacity of the
coverage, and
Romanian government is
sufficiently staffed.
maintained.
l Conceptual and legal
framework for the
catastrophe financial
risk transfer is
formulated and
disseminated to key
policy makers.
B. Improved earthquake risk
l More than 80
Progress reports provided by
Institutional framework,
mitigation measures.
high-priority public
MTCT.
including the legal
facilities are retrofitted to Supervision mission reports
arrangements for ownership
a level which allows for
based on independent expert and responsibility for public
functioning after an
reports.
buildings retrofitting is
earthquake of up to 7.5
Bank project evaluation (ICR) maintained.
magnitude.
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C. Improved risk mitigation
l Nine flood mitigation
MEWM progress reports
Government maintains
measures related to floods and
schemes are upgraded or Supervision mission reports
already demonstrated
dam safety.
rehabilitated.
Bank project evaluation (ICR) commitment and capacity to
l Three critical Danube
implement the measures
River areas are
supported by the project.
rehabilitated.
l Eight selected large and
five small dams are
rehabilitated.
l Landslide risks are
mapped and used for land
management and
planning.
D. Hazards prevention and
l At least three highly
ICPDR reports.
Sustained interest in
mitigation measures
dangerous tailings
NAMR progress reports.
replicating the results
implemented in the Tisza
management facilities are Supervision mission reports.
throughout the country and
Basin to reduce risk of mining
rehabilitated and
Bank project evaluation (ICR) the region.
accidental spills of pollutants
immediate/emergency
as well as emergency
safety measures are
preparedness and effective
identified and
environmental monitoring
implemented in the
capacity established and
remaining high-risk
transboundary collaboration
tailings facilities in the
on water resources
Tisza basin.
management is strengthened.
l Funding for replication of
activities supported under
the project are leveraged
from public (and private)
sectors.
l Risk assessment
procedures are adopted to
identify priority actions
in critical mines.
l Environmental
monitoring system of the
Tisza basin designed,
procured and
implemented.
l Environmental and
engineering guidelines
for tailings dams and
waste facilities are
developed and adopted.
l Regional emergency
preparedness and
response system related to
mining accidents is
established and
implemented.
l Regional Task Force to
review failure mode and
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impacts analysis is
established.
l Regional
meetings/workshop on
water resources
management are
documented.
l A proposal for a regional
water resources project
for the Tisza Basin is
drafted.
l Cost-effective, efficient
and innovative methods
for improving the
management and safety
of tailings facilities as
well as other lessons are
identified and
disseminated throughout
Romania and the Danube
Basin.
E. Project management
l Timely, cost efficient and Project progress reports
Administrative and political
technically sound
Supervision mission reports
obstacles do not interfere in
implementation of the
Bank project evaluation (ICR) implementation of the project.
project.
Project Components /
Inputs: (budget for each
Project reports:
(from Components to
Sub-components:
component)
Outputs)
Component A: Strengthening $10.9 million
For all components:
Counterpart funds are
of Emergency Response and
Quarterly progress reports
available in a timely manner
Risk Financing Capacity
Quarterly disbursement
reports
Supervision mission reports
Annual audit reports
Component B: Earthquake
$71.2 million
Risk Reduction
Component C: Flood and
$101.1 million
Landslide Risk Reduction
Component D: Risk
$15.25 million
Reduction of Mining
Accidents in Tisza Basin
Implementation structure is
Component E: Project
$5.2 million
put in place with a capable
Management
staff
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Annex 2: Detailed Project Description
ROMANIA: HAZARD RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT
By Component:
Project Component A - Strengthening of Emergency Management and Risk Financing Capacity - US$10.91
million
Objective. The objective of this component is to enhance the capacity of the Romanian authorities to better
prepare for, respond to and recover from natural or man-made disasters, through modernization of
information technology and communications systems, activities which would increase the planning and
training efforts of all levels of government, public awareness and preparedness, and complete technical
feasibility work and institutional framework for launching of the Romanian Catastrophe Insurance
Program.
Background. Strong Commitment to Emergency Preparedness. The Government of Romania is strongly
committed and determined in pursuing the objective of preparing Romania for a range of natural and
industrial disasters and hazards facing this country. Particularly notable is the work completed by a
number of institutions in conceptualizing emergency management issues, and the level of scientific and
technical knowledge available in Romania. There have been many valuable efforts to enhance institutional
capacity of the Government, academic and private sectors in this field. The governmental organizations
have made substantial steps in setting up an institutional framework for coping with disasters by creating
central, sectoral, and local level commissions with a mandate to coordinate response to the emergencies.
Institutional Changes in Disaster Management. The Romanian Civil Protection and the Military Fire
Corps ­ the nation's two principal emergency management agencies ­ have their origins in post-World War
II programs to protect the population against attack. In 1978 Civil Protection became responsible for
activities related to mitigation, preparedness and relief after large-scale disasters and until 1989 these
activities were organized under the Romanian military department. Since 1989 the laws, orders and
regulations related to Civil Protection and the Fire Corps have been modified frequently to detail the
structure of Civil Protection and define the national strategy for emergency management at the national,
county and local levels. In 2000, the Ministry of Interior assumed overall administrative management of
both Civil Protection and the Fire Corps. In 2001, the Government altered the structure of Civil Protection
and the Fire Corps by moving both functions under the Ministry of Public Administration (MPA) which
had the overall mandate to decentralize governmental functions nationwide. Another restructuring took
place in June 2003 when the Ministry of Public Administration was merged with the Ministry of Interior.
Consequently, the Fire Corps and the Civil Defense Units have been subordinated to the new Ministry of
Administration and Interior (MAI). Furthermore, a new Governmental Ordinance (#63) was issued which
legally established the Inspectorate for Emergency Management under the structure of the MAI. It
stipulates that the new inspectorate will consist of both the Fire Brigade and the Civil Protection Units.
At the national level, sectoral ministries have the lead responsibility for specific hazards. The Prime
Minister is the head of the Central Commission for Defense Against Disasters. This commission is
activated only during event of major national importance. Each ministry designates an internal commission
to develop plans and provide expert services in their functional area; Civil Protection is responsible for the
overall coordination of government actions. There are 42 counties in Romania, and the system of
commissions is essentially replicated at this level. The county Prefect (Governor) heads the commission
responsible for coordination. There are also 3 Fire Fighting Brigades in the larger counties and 38 units in
the remaining counties composed, like the civil protection organization, of a combination of professionals
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and volunteers. At the local level similar commissions are authorized, under the leadership of the Mayor,
who is an elected official.
The changes enacted in recent years envision a fundamental alteration to the Romanian emergency
management system. The new structure is designed to further separate Civil Protection and the Fire Corps
from their historic roots in the overall military organization. Current plans estimate that the transformation
process will be completed by 2006. The successful implementation of the structural changes, and
strengthening of the emergency management function, especially given Romania's seismic risk and the
pressing needs to upgrade the operational capacity of the organizations and personnel involved, underscore
the importance of providing focused support to the government's overall efforts in this area, through
training, planning efforts, strengthening of technical capacity, and upgrading the communication and
disaster management information systems.
Resource Limitations. Current emergency response systems are antiquated and heavily dependent upon
telephonic and fax systems that have historically proven vulnerable at the time of catastrophic events.
Linkages between critical functions, especially fire, police and the hospitals are tenuous. The equipment
available to Romanian emergency management, at every level, is outdated and there is little redundancy in
any of the systems. There is almost no ability to process information electronically, identify overall impacts
from major events and develop rapid priorities for emergency response
Lack of Financial Risk Transfer Mechanism. Romania's high exposure to natural disasters, seismic
vulnerability of its housing stock and infrastructure, and the expected high economic losses from
catastrophic events call for a national insurance mechanism which would reduce the government contingent
liability due to natural disasters by transferring highly concentrated catastrophe risk to the international
reinsurance and capital markets. The Government is currently considering introduction of the catastrophe
insurance program however, launching of such a mechanism must be preceded by necessary technical
feasibility work to allow the Government for making informed policy and legal decisions on the substance
of the future program.
Component Description:
The activities to be supported through this component are designed to enhance and support the current
efforts by the Government of Romania to upgrade the emergency management system and to enhance
operational effectiveness of the agencies and organizations responsible for preparing for and responding to
major emergencies, as well as to assist the GOR in completion of the technical work and institutional
upgrading necessary for launching the comprehensive Romanian Catastrophe Insurance Program. The
following are the component activities to be supported by the project.
Sub-component A.1 Upgrading Emergency Communications at the National, Regional and Local
Levels (US$ 3.73 million)
The objective of this sub-component is to enhance the functionality, interoperability and coverage of the
voice communications capability of emergency management agencies (e.g. civil protection, fire corps,
emergency medical organizations) and personnel in Romania.
Feasibility Study and Design Analysis. The component will support development of the feasibility study
and design analysis for the upgrading of emergency communications at the national, regional and local
levels. The work will be carried out in coordination with Romanian officials assigned by the Ministry of
Administration and Interior. The study should focus on VSAT equipment, GPS, docking terminals and the
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latest technologies for Tetra radio systems which are the most common types of equipment used today by
the emergency management community. The focus will be given to the provision of emergency
communication in the rural areas, where the lack of coverage by mobile systems constitutes particularly
acute problem. In addition, attention needs to be given to the compatibility with existing or complimentary
communications equipment.
Modernization of Communication System. Following completion of a feasibility study and systems design
analysis, the project will support the modernization of the radio, mobile and wireless communications
capabilities in Romania. Particular emphasis should be given to expanding the geographic coverage of the
emergency communications network, developing an acceptable level of redundancy in the system, and
enhancing the ability of the various emergency management functional agencies to communicate with each
other during emergencies.
Sub-component A.2 Development of Emergency Management Information System (US$ 4.20 million)
The objective of this sub-component is to develop a coordinated information management system to collect,
analyze and share real-time data among emergency management agencies and key public officials at the
national, regional and local levels. The system should standardize the collection of data, facilitate its
analysis at each level, connect and integrate data sources and provide timely, accurate and coordinated
information to decision makers and operational agencies during natural or man-made crises.
Currently, Romanian ministries have operational responsibilities for specific hazards, including monitoring,
data collection and information analysis. For example, because of recurrent floods in Romania, there is an
advanced system for flood detection and warning, but this system is not integrated into a comprehensive
emergency management information system. Moreover, Civil Protection, which is responsible for the
overall coordination of government actions during major emergencies, is not directly linked to this system
and has minimal capabilities to manage the information that may be provided to them from other ministries
as well as county and local governments. Because of this limited capability, effective use of resources is
reduced.
Feasibility and System Design Study. The project will support a feasibility and system design study that
will form the basis for implementation of a modern emergency management information system. The study
should focus on the needs of the users and promote information sharing between ministries and the county
and local levels. The information system to be developed would need to include the following
characteristics: 1) be responsive to needs of users and provide a communication network between civil
protection at the national, county, and local level; 2) allow for two way processing of information and
communications; 3) support daily operations of the organization, not just emergency situations; and 4)
integrate existing legacy systems. It should be emphasized that the new system should serve day-to-day
operations of the various institutions, so that this substantial investment in the IT equipment is not only
deployed during catastrophic events but can also improve the core functions of the organizations.
There are several existing systems that need to be reviewed and evaluated for incorporation into the
feasibility study for design of a new comprehensive system. Among the systems to be reviewed are sensors
and monitoring networks, Fire Brigade alert and notification systems, dam monitoring systems, building
inventory data base systems (particularly in Bucharest), GIS and other mapping or data systems that are
identified as currently operating throughout the government. The review should present the problems of
integrating the systems and make recommendations as to which systems to include and the rationale behind
their recommendations.
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Prior to conducting the study, and upon launching of the project, the Government should establish a User
Working Group comprising potential users and organizations that will be part of the emergency response
system. The User Working Group will be organized and coordinated by MAI, and should also include
representatives of Ministries of Health; Agriculture, Forestry and Rural Development; Environment and
Water Management; Transport, Construction and Tourism; Communications and Information
Technologies; Civil Protection; Fire Brigades; and representatives of risk-prone counties and
municipalities. The group will provide advice and develop recommendations on what functions the system
should support, and agree on the final Terms Reference for the feasibility study.
Establishment of IT-based Emergency Management Information System. Following completion of the
feasibility/design study, the project will support the acquisition of an emergency management information
system to be deployed at the national, county and municipal levels.
During the implementation stage, the User Working Group will provide feed-back on the system design,
will assist in monitoring and evaluation of the system's functioning, and if necessary, recommend
adjustments.
Sub-component A.3 Development of a Vrancea Earthquake Scenario (US$ 0.78 Million)
The objective of this component is to develop a reliable earthquake scenario that will model potential
damages to the human and built environment from the maximum probable earthquake along the Vrancea
fault. This scenario will provide the basis for updating emergency plans and procedures, as well as
developing and conducting training and exercise programs for agencies and personnel to identify shortfalls
and needs.
While there has been substantial effort by the Ministry of Transport, Construction and Tourism in
coordination with other line ministries, and the Romanian civil engineering community, to identify
structures at risk throughout the nation, there remains considerable uncertainty regarding the overall impact
that a major earthquake in the Vrancea seismic zone might cause. For example, because in 1977 there was
little damage to the lifelines in Bucharest, there is a general assumption that the next major earthquake will
have a similar effect. Two factors call this assumption into question. First, the next event may produce
significantly stronger ground motions than were seen in 1977. Secondly, the infrastructure is now a
quarter-century older, there has been little investment in its upgrade and maintenance during this time, and
it is clear that there has been deterioration of some of its features.
Vrancea Earthquake Scenario. To assist the development of realistic emergency response plans and to
guide initial damage assessments, the project will support development of a detailed earthquake scenario for
the Vrancea seismic region. To ensure consistency, the development of this scenario should be coordinated
closely with the data gathering activities to be carried out through Component B. The scenario will include
but not be limited to information concerning:
·
Hospitals and medical facilities
·
Emergency operations centers
·
Schools, universities
·
Communications systems
·
Fire and police centers
·
Transportation systems
·
Power systems
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·
Natural gas, petroleum, energy systems
·
Water and waste water systems
·
Nuclear plants
·
Hazardous materials facilities
The model must have the capacity to compute potential damages to residential, commercial, and industrial
buildings, essential facilities and lifelines and potential fatality and casualty requirements for response
planning purposes.
Training and Exercising of Response Personnel. Following completion of this scenario, the
sub-component will support the work of the Ministry of Administration and Interior and the Civil
Protection to revise emergency plans to reflect the findings in the scenario and to carry out a series of
training programs and exercises to enhance the operational effectiveness of the public safety agencies.
As a critical part of the training, this sub-component will support the design of a series of exercises to be
conducted at the national, county, and local levels to test coordination, response and readiness and then
identify corrective measures. At a minimum, one national exercise involving the city of Bucharest and two
regional and local exercises should be executed. Each exercise should involve multiple jurisdictions to test
coordination, response and readiness capabilities between county, national and local entities, and
compatibility of operations and communications. The universe of people to be involved in these exercises
should include, at minimum, all of the specialized regional teams, emergency medical personnel, senior
civil protection personnel and selected regional and local leadership.
These exercises will provide a solid measurement of the effectiveness of the training and identify response
needs. They should be monitored and evaluated by independent observers. Prior to the exercise,
independent consultants should develop objective evaluation criteria to be used in monitoring the exercises.
After each exercise a report should be completed that documents the results of the exercise and includes
recommendations for corrective actions. In addition, a Five Year Plan and schedule for an annual exercise
program that would systematically test all elements of readiness and response throughout Romania should
be developed under the leadership of Civil Protection.
Sub-component A.4 Public Awareness Program (US$ 0.41 million)
The objective of this component is to educate and to mobilize the general public to enhance individual
preparedness and self-sufficiency during emergencies. Evidence from earthquakes and other natural
disasters throughout the world clearly demonstrates the importance of having a knowledgeable public, often
acting in emergencies as "first responders", and who understand actions to take before, during and after an
emergency.
The awareness of the public regarding appropriate measures to take before, during and after a major
disaster, particularly an earthquake, is a critical element of any emergency management system. Trained
first responders can make a critical difference in reducing the loss of life in the immediate aftermath of an
earthquake. This sub-component will support developing a national campaign that educates the populace
about their risks, particularly the earthquake risk. The design of the campaign will include risk reduction
messages and tips for all hazard situations. It will concentrate on a family preparedness approach with
safety tips for the immediate post disaster period and information on dealing with post-disaster trauma.
This campaign is intended to be multimedia and supported through various mediums including television,
radio, print and other advertising media. In addition to the national campaign, there will be also program
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on disaster preparedness and prevention designed for selected high risk localities prone to specific hazards
typical for their location. At the sub-national level, the programs will be coordinated through the Governors
and will also target county and local officials.
Sub-component A.5 Preparation of Catastrophe Insurance Program (US$ 1.80 million)
The objective of the insurance component is to complete the minimum technical feasibility work for the
preparation of the launch of the Romanian Catastrophe Insurance Program (RCIP). Upon completing the
studies and activities outlined below, the GOR would be able to make a sound policy judgment regarding
the optimal legal and institutional design characteristics of the future insurance program, and to prepare a
plan which would be credible to the reinsurance market. If successful, the completion of this work may also
result in the preparation of a stand-alone World Bank lending operation in support of the RCIP's operation,
or the Government will be in position to obtain the support from other international financial institutions in
order to launch the Program.
In order to ensure adequate participation of all relevant government agencies and ministries and of the
private insurance market in the design and the subsequent implementation of the future program, the
establishment of an inter-ministerial Steering Committee on Disaster Insurance is recommended. It should
include the representatives from the Ministry of Administration and Interior, the Ministry of Public
Finance, the Insurance Regulator, the Central Bank, the Ministry of Transport, Construction and Tourism,
a Parliament Budget and Revenue Committee and the representatives of existing insurance associations.
The Steering Committee would become the main policy setting body of the program chaired by the Minister
of Ministry of Administration and Interior ­ the ministry designated by the GOR to handle the preparation
of the Romanian Catastrophe Insurance Pool and the implementation of component A.
The main functions of the Committee would include (i) developing national policies and legislation
regarding the catastrophe insurance; (ii) sponsoring relevant legislation and ensuring implementation of the
proposed policies and legislation and technical activities developed under the component; and (iii) general
oversight of the program. It is envisaged that upon the creation of the Romanian Catastrophe Insurance
Pool, the members of the Committee would also become its Board Members.
The activities supported by sub-component A.5 aim to build the technical capacity within the government
in the area of catastrophe risk management. This could be achieved by creating the Technical Working
Group consisting of government and industry technical experts. These experts should represent different
stakeholders participating in the Steering Committee. The main purpose of the Group would be to oversee
the activities to be financed and implemented under this sub-component. The Technical Working Group
shall report to the Steering Committee on all matters related to the project.
The project sub-component will provide support to the following key studies and other services provided by
consultants:
Integrated Disaster Risk Management Study. The study will quantify the overall earthquake exposure and
vulnerability of Romania to the risk of quakes and floods. It will then estimate economic losses and the
government's fiscal exposure to the risk of natural disasters. The study involves the development of
specialized catastrophe insurance model for Romania, that would be based on the country specific analysis
of hazards, and vulnerabilities of assets at risk. The models would be built using the available country data
on frequency and severity of earthquakes and floods across the country. The models are expected to be used
by the RCIP upon the completion of the work.
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Upon completion of the country risk exposure, the study will generate GIS based risk hazard maps for both
risks. Based on hazard maps and the analysis of vulnerabilities for major building classes, the study would
then develop actuarial estimates of risk in each area and would produce the indicative rating tables that
later on can be used by the RCIP for setting up the premium rates.
Development of Institutional and Legal Framework. The work will result in the comprehensive design of
the RCIP institutional and legal structure. It will lay out the management structure, the composition of the
Board, staffing requirements, and the role of insurance sector and the government in the operation of the
scheme. Also, in the preparation of the launch of the RCIP, a legal framework guiding the main aspects of
its operations will be developed.
Training and Study Tours. Training activities and study tours would be conducted to introduce the
Romanian policy makers and insurance professionals to the modern risk transfer technology and experience
available in other countries. Seminars and workshops on the key topics of the pool's design will be
organized in the country as well.
Resident Catastrophe Insurance Advisor and Development of Policy Terms and Conditions. For the
duration of the insurance component, expected to be completed within two years, an international insurance
advisor would be retained to advise the GOR on the institutional and technical options and trade-offs
involved in the design of the insurance program. The advisor will actively participate in the day-to-day
supervision of consultants' work, and in assisting the government and the insurance sector with the
preparation of the program.
Moreover, the international expert will develop standard insurance policy forms for flood and earthquake
coverage. The work will require a collaboration between the industry and the insurance supervisor.
Development of Asset Allocation Guidelines, Operational Guidelines, and Risk Management Guidelines
for RCIP. The activity will result in the production of asset allocation guidelines that would be used by
RCIP in its day to day asset management operations, in a set of model operational guidelines, and will
produce a hand book of risk management guidelines, with a major emphasis placed on managing risks on
the liability side of the RCIP's balance sheet.
Project Component B - Earthquake Risk Reduction - US$71.20 million
Objective. The objective of this sub-component is to assist the Government in reducing the seismic
vulnerability of high priority technical and social infrastructure through the retrofitting of key structures
and through institutional strengthening.
Background. Risk Overview Romania, including many of its largest cities, is among European countries
the most vulnerable to seismic risks. This vulnerability to is due to its geographical location on the Vrancea
subduction zone, situated along the south-eastern Carpathian arc, which forms an ellipse stretching from
the north east to the south west of the country's territory, and includes Bucharest. Proximity to the fault
and poor soils make Bucharest Europe's highest risk capital city and one of the 10 most vulnerable cities in
the world. The Vrancea zone can generate high magnitude earthquakes of up to Richter magnitude 8.0.
The primary source of earthquakes in the zone is an area of over 2,100 kmē but the seismic activity can be
felt 200-300 km from the epicenter, thus affecting about half of Romania's territory. Since 1908, 14
earthquakes of magnitude 7.0 or greater have affected almost 2 million people, causing massive economic
losses. The 1977 earthquake measured 7.2 on the Richter scale and resulted in 1,424 fatalities in Bucharest
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and 154 in other areas of the nation, over 11,000 injuries, and approximately USD 2 billion in direct losses.
33,000 housing units were destroyed or seriously damaged, leaving some 200,000 residents homeless.
About 400 schools were destroyed and 2,000 seriously damaged; 11 hospitals were destroyed and 448
hospitals and health care clinics were damaged.
There have been various forecasts of future seismic activities in Romania, ranging from another earthquake
within a few years to forecasts anticipating catastrophic seismic activity within the next few decades.
Regardless of the accuracy of either estimation, it is clear from the historical record that large magnitude
earthquakes occur on the Vrancea zone with considerable regularity and that a major event should be
anticipated in the coming years.
Compounding the situation is the concentration of Romania's economic activities in and around Bucharest.
The vulnerability of the Romanian economy to earthquakes alone is further exemplified by the following
facts:
·
over 35 percent of all Romanians, and 65 percent of the urban population, is exposed to seismic
hazards from the Vrancea fault;
·
60-75 percent of fixed assets is located in seismic zones;
·
70-80 percent of GDP is produced in highly seismically prone areas;
·
45 percent of all national lifelines are in seismic areas of VII-IX intensities on the Mercalli Scale
(MSK);
·
26 percent of national housing stock was built before 1944 and is therefore highly vulnerable to
earthquakes.
Government Actions. The Government of Romania and the country's professional/technical community is
aware of the serious risk and has taken a number of important steps to address the nation's principal
seismic risk in the Vrancea earthquake zone. This includes an inventory of at-risk structures, establishing
priorities for the retrofit of pre-code, privately owned buildings in Bucharest, allocating funds and
establishing a loan program to support their retrofit, and the development and implementation of improved
building codes. Further, the Government has provided funding for the strengthening of schools (with
additional funding from the World Bank), hospitals, bridges, communication facilities, university buildings
and other structures. Many projects have been completed and others are under implementation, but budget
resources are too limited to continue this work to the extent needed. Partnerships include on-going
cooperation with international institutions including JICA, the Japan International Cooperationve Agency,
and GTZ, the German National Research Foundation, to support technical assistance in these areas.
Inventory of at-risk structures. Under Government directives, the Ministry of Transport, Construction and
Tourism, the Ministry of Health, the Ministry of Education and Research, and the Ministry of
Administration and Interior have inventoried potentially hazardous buildings. These include hospitals,
schools, university structures, residential structures and structures of cultural or historic significance
throughout the nation, but with particular emphasis on Bucharest, the area of the largest concentration of
risk. The surveys have provided an invaluable initial database for considering alternatives for investments
in seismic risk reduction through structural strengthening by retrofitting and have served as a foundation
for the prioritization work done collaboratively during preparation by Government and the Bank team.
Component Description:
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The earthquake risk reduction activities to be supported through this project are designed to build upon and
enhance the Government's ongoing efforts by focusing on critical public facilities--namely hospitals,
universities, communications facilities, government buildings and lifelines--through targeted investment
and technical assistance program comprising the following sub-components:

Sub-component B.1 Retrofitting of High Priority Public Facilities (US$ 64.42 million).
This subcomponent will focus on the structural and non-structural strengthening of critical public facilities
and lifelines--those that have a paramount role in the emergency response and preparedness system, and
those that are essential for the country's social functioning.
In the early stages of project preparation, a workshop was conducted in Bucharest on the prioritization and
selection of high priority buildings for seismic risk mitigation. Representatives of the governmental
agencies responsible for the essential facilities participated, including the ministries of Transport
Construction and Tourism (MTCT)--as lead ministry, Education, Health, Administration and Interior,
Water and Environment, and Culture; as well as the Fire Services, Civil Protection, the Romanian Water
Association (Apele Romane); the Bank team also participated.
The objective of the workshop was to present a methodology to be used for (a) identifying facilities that are
critical for Romania in terms of emergency recovery and life safety, (b) selecting the facilities to be funded
for strengthening, and (c) establishing a transparent process to assess the investment from social, technical
and economic perspectives. The types of public facilities to be considered eligible for seismic strengthening
through project financing were discussed and agreed, and are categorized as follows:
Category A:
Emergency and Disaster Response Facilities
·
Fire stations; command stations
·
Disaster control and response centers
·
Ambulance centers
Category B:
Emergency Health Facilities
·
Emergency hospitals
·
Other health facilities selected on the basis of response needs and
life-safety risk.
Category C:
Educational Facilities
·
Higher education facilities (Universities, etc.)
·
Child Protection Centers (Orphanages)
Category D:
Communications facilities
·
Buildings and certain equipment and lines
Category E:
Essential Public Buildings
·
Facilities that are essential for the administrative functioning of
communities at risk after disaster
The prioritization of facilities to be strengthened, within each of the above categories was agreed and each
ministry was asked to participate with key staff, including sector experts (e.g. education, hospitals, etc.),
emergency response experts, economists and structural (earthquake) engineers. The criteria for the ranking
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of facilities was based on the following considerations: Functional--criticality to response and recovery
operations; Social--life-safety and higher risk for the population; Economic--cost effectiveness or
cost-benefit analysis; Technical--feasibility and appropriateness of the retrofit measures.
After several iterations, all of the selected facilities were inspected in the field by a multi-disciplinary team
under MTCT guidance to ensure that the selection criteria were being met to the fullest extent possible.
This produced a list containing 300 structures, which had to be further refined and cut by the concerned
ministries in cooperation with MTCT. The result was a ranked list of facilities for each of the four
operational categories that was presented to the Bank team for review in January, 2003.
A series of working sessions were then held between the Bank and Romanian counterparts with the
objective of jointly reviewing the presented priority lists in order to identify projects that can be financed in
the initial phase of project implementation. Review criteria included: a) functional importance with regard
to emergency response, b) relevance in terms of life safety, c) readiness for implementation including
availability of technical reports and engineering designs, d) retrofitting costs below 60% of replacement
cost. The teams reviewed each proposed building in a process that led to further refinement of the lists and
identification of additional information to be provided and discussions on the potential use of new
technologies for cost-savings. General guidelines for the allocation of funds between the sub-categories was
also agreed. Finally during the September pre-appraisal mission, all available technical documentation was
reviewed, and the list was further refined and updated. This process enabled the Bank team to provide full
support to the final lists and as a result between 3 ­ 14 facilities per sub-category were selected as high
priority investments. The list of facilities is available in project files and will expected to be incorporated in
a subsidiary loan agreement between the Ministry of Public Finance and MTCT.
Through the selection process, over 84 key structures have been identified to be retrofitted under this
sub-component. Work will be implemented under the supervision of independent consultants, as outlined in
component B.2. The retrofitting of the structures will be carried out according to performance-based
structural designs to satisfy defined design criteria for earthquake loads, meeting or exceeding the current
requirements of the Building Code of Romania. In general, it was observed that throughout Romania recent
structural retrofitting work applies conventional methods conservatively, resulting potentially in
unnecessarily high material consumption and with sometimes inappropriate architectural impacts.
Government wishes to introduce newer structural retrofit methods that are in use in other parts of the
world. The project will therefore include an assessment of each facility to determine the most cost-effective
method of retrofitting, considering state-of-the-art methods such as ductile vs. shear-wall designs, seismic
isolation, etc. In this context, sub-component B.5 (see below) will provide a training and accreditation
program that is aimed to assist the design community and their clients in better understanding and applying
the concepts of risk management and cost-benefit analysis in their designs. Sub-component B.2 will also
provide for the design of seismic isolation systems by arranging collaboration between Romanian engineers
and an international research group or firm specialized in such systems, for seismic isolation pilots that are
to be included among the selected facilities.

Sub-component B.2
Design and Supervision (US$ 5.74 million)
This sub-component will finance: a) the structural design of the strengthening schemes for about 60
buildings or objects that have not yet been designed, including non-structural elements, and b) the review of
designs for about 23 objects for which designs are already completed by international structural engineering
consultant. In addition, the latter will include the supervision of construction for all 84 objects in the
program, to assure compliance with the engineering designs. The cost is estimated at up to 10% of the
budget for this component, which is reasonable for retrofit projects that will typically involve several
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alternative design approaches and cost-benefit analyses in order to arrive at the most appropriate designs.
Architectural consulting services will also be required during the entire study and design process for all
facilities, particularly for historic buildings, which will require retrofit designs that do not affect
significantly architectural features that must be preserved. Construction supervision services will involve
continuous monitoring of the construction to assure compliance with the structural retrofit engineering
design and adequate quality. No modification will be made to the designs without the approval of the
PMU.

As noted above, 84 facilities have been identified for retro-fitting through a collaborative process involving
a range of government agencies, the MCTC and the Bank. Each object requires a detailed Feasibility Study
with owner-agency approval before engineering design can begin. Under Romanian regulations, the
Feasibility Study must recommend a range of approaches and cost estimates, sufficiently developed to
enable the owner to make an informed decision on proceeding with the investment. As of Appraisal,
Feasibility Studies for 64 of the listed objects had been completed, with six additional studies expected
within about a month. Of these 64, designs for 23 objects have been completed. All objects with completed
Feasibility Studies are subject to Inter-Ministerial Committee (IMC) approval.
The design review work and supervision will be tendered to attract international expertise and will require
experience in modern seismic engineering techniques and cost-benefit analysis. Terms of reference will call
for collaboration with Romanian firms, and in order to further enhance knowledge transfer and increase the
capacity of Romanian engineering firms, it will be coordinated with the training sub-component (B.5).
As a first step in the implementation of this component, the 23 designs that are ready will be subject to
technical review by the international consultant structural engineering services to be funded under project
technical assistance. These objects will be in the first set of construction contracts to be tendered as soon
as the loan is effective. For the remaining objects, the consultant structural engineering services will review
their Feasibility Studies, and will prepare the required performance-based structural designs in
collaboration with Romanian designers. In all cases, several options will be considered for each retrofit in
order to optimize the use of resources and minimize impacts.
Three buildings will be selected from the pool of 60 buildings without designs for the application of seismic
isolation designs (or other appropriate innovative seismic mitigation methods) in a pilot activity. Design of
seismic isolation or other appropriate method will be carried out separately from the seminars, based on
pilot buildings proposed as suitable for this method by the MTCT's technical advisory committee. Design
engineers from Romania will work directly with an international research and design group or firm that
specializes in the design of seismic mitigation systems to develop the designs. The outcome will be
complete technical designs and a core of Romanian engineers who can execute such designs on their own.
Sub-component B.3 Energy Sector Risk Assessment (US$ 0.41 million).
While considerable effort has been expended to make an inventory and assess buildings in the Vrancea
earthquake zone, there is no comparable assessment for critical facilities and equipment in the country's
energy sector including production and distribution facilities and systems. The function of energy
production, transport and distribution systems is essential after a disaster, and the power and gas and oil
systems in Romania are vulnerable to seismic disruption.
The project will support a comprehensive risk and vulnerability assessment of electricity, gas and oil
lifelinesfacilities located in the Vrancea earthquake zone--Energy Production and Distribution Risk
Assessment Study. In the electricity field, the study will assess the vulnerability of power generation
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facilities (in hydro and thermo stations), major substations, main transmission lines and other critical
facilities. In the gas field, production and distribution facilities, including regulation facilities for transit and
import uses and compression stations will be the main focus. In the oil industry, priority will be given to the
assessment of the vulnerability of refineries, storage tanks and pumping stations.including the development
of cost-effective mitigation priorities and strategies. This assessment should be also integrated into the
overall regional earthquake scenario included in Component A of the project and the investment in
mitigation priorities. The study will lay the foundation for follow-up work on a detailed cost-benefit
analysis of investments needed to address vulnerability of critical facilities, including prioritization of
investment projects, providing opportunities for other donors' contributions to reducing the vulnerability of
this critical sector for the Romanian economy.
Sub-component B.4 Building Code Review (US$ 0.25 million).
The Romanian code is appropriate from the point of view of conventional structural requirements, and
provides for adequate strengthening for seismic forces. However, the code is not flexible for different
approaches according to different types of structures, and does not give clear guidance for seismic
retro-fitting. This leads engineers to err on the side of caution and produce very conservative and costly
designs. The code does not encourage the application of modern approaches to seismic force mitigation. A
code revision working group consisting of several professional committees assigned to different chapters is
currently in the process of revising the code for new buildings, with the aim of bringing the code more into
line with international practice, and harmonizing the format with that of the European Union. The project
will assist this process, with a focus on updating the code to reflect recent developments in methods and
technology, and addressing the strengthening of existing structures.

The project will support a detailed Building Code Review, focusing on applicable earthquake design
requirements. The project will support the development of a separate chapter on the seismic retro-fitting of
existing buildings, which has been scheduled to be drafted as a part of the current code revision process.
The result of the review will be a series of recommendations for changes for the next version of the code,
work which will be continuing during the early stages of project implementation. A study of procedures and
practices for code enforcement, as related to earthquakes, will be included. It is expected that this activity
will be implemented in cooperation with a related project financed by JlCA (Japanese International
Cooperation Agency). The Code Review will be integrated with the Professional Training described below,
as a related component to support the ongoing code revision process underway in Romania.
In developing both training and code review components, MTCT convened a steering committee (SC) under
the leadership of the General Director of the Technical Directorate (GDTD), with members of the
professional, academic and engineering communities. The Code Review component will be implemented in
parallel with the training component (subcomponent B.5) and be based partially on feedback from the
training component, where hands-on design under different codes will be undertaken. MCTC is including
the Code Review in its annual code revision agenda for 2004.
With regard to code enforcement, The Ministry of Transport, Construction and Tourism enforces building
codes either through its own personnel or other experts trained and certified by the ministry. The general
consensus is that the enforcement of codes is effective and substantially free of inconsistencies.
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Sub-component B.5 Professional Training in Cost-effective Retrofitting Methods (US$ 0.38 million).
A review of recent retrofitting work in Romania shows a tendency to conservative design, resulting in high
material consumption and associated costs, as well as inappropriate architectural impacts. A need was
identified during project preparation to expose and train the Romanian design community and its clients to
concepts of risk management and cost-benefit analysis in the design of strengthening and mitigation
interventions. More cost-effective designs would meet risk management criteria while at the same time save
resources and enable more structures to be retrofitted. The outcome of this activity will support the
project's retrofitting investment activity, as well as the on-going Government program for seismic
strengthening of private buildings.
The training component will introduce up-to-date earthquake engineering concepts to Romania, building on
the already well-developed professionalism of its engineering community, and will be integrated with the
Code Review sub-component described above. A certification process for participants will be officially
recognized by academic institutions and by Government. Course content has been agreed in principle. The
training will be university-based, and a distance learning module will be implemented for sustainability.
The program of training sessions will provide at least three seminars of five to seven days each, for 30 to
40 participants in each session. The participants will be structural engineers who design and strengthen
buildings for earthquake resistance, as well as representatives from the academic community, architects,
and engineers from various government agencies. The following will be invited to attend:
·
Approximately 40 design companies and 70 contracting companies qualified in retrofitting design
in Bucharest and the 16 counties of the Vrancea seismic area.;
·
Registered and licensed technical experts, design supervisor engineers, and site supervisor
engineers.
·
Municipal and county office construction inspectorates for Bucharest and 16 county offices
covering the Vrancea seismic area; as well as the local authorities (county head offices, city halls);
·
Central authorities (8 ministries).
The training component will be developed in collaboration with a recognized international professional
engineering association. The steering committee has defined the structure, content, criteria, logistics and
estimated cost of the training component, and drafted the required Terms of Reference. Seminar content
will cover (a) alternative strategies for seismic design, including the techniques of base isolation, energy
absorption and damping systems, modern strengthening techniques, etc., (b) new materials for
strengthening, (c) introduction to the development and use of performance based criteria, (d) actual design
examples of strengthening schemes to be used later in the project for buildings in Romania (as discussed in
the following paragraph), (e) the development and use of Probable Maximum Loss estimates, (f) lessons
from recent destructive earthquakes that are applicable to Romania, (g) current international developments
in building codes.
Up to 5 buildings for which designs have not yet been undertaken will be analyzed and conceptually
designed by the seminar instructors in order to demonstrate the different physical impacts and cost savings
that can be accomplished using alternative techniques and design approaches. The buildings could include a
hospital or emergency center building, a large public building such as a City Hall and a registered historic
building.
The seminars will be conducted in Bucharest and at least one other location in Romania, and will be
conducted as soon as practical after funding is approved. The language of instruction will be English with
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simultaneous translation in Romanian. A nominal fee is envisaged for private sector participants, and a
certificate will be given to trainees upon successful completion of the course.
Three foreign earthquake engineers with extensive design experience and up to three Romanian instructors
will conduct the training. The international instructors will be in charge of the design of one of the buildings
that will be used for examples. Each will conduct approximately one third of the seminar. The training will
be phased to be coordinated with the work of the internationally-procured design services in order to
provide the opportunity to deepen the training experience with additional practical activities in the design
process. Copies of all presentation material will be prepared for distribution at the seminars. Notes and
videos taken during the seminars will be used to develop a Distance Learning Module for later use by the
structural and earthquake engineering community of Romania.
Project Component C - Flood and Landslide Risk Reduction - US$ 101.09 million
Objective. The objectives of the component are the following: a) to reduce flood risk and vulnerability
which severely curtail development in critical areas in Romania, b) to improve safety of selected large and
small dams so that these structures can function as designed, and c) to map and model the risk of landslides
in Romania in order to reduce losses and provide for better land planning tools.
Background. Risk Overview. Floods constitute the key natural hazard in Romania. They often affect
Romania and there is a tendency for increased flood levels and frequency in the last decade. In the 1990's,
between 1992 and 2001 there were floods every year in some parts of the country resulting in significant
human losses and material losses. Most of these losses are borne by the rural sector in townships, villages,
and communes which affect the poorest groups of people. The average annual losses account for 0.3-0.7%
of the total GDP and over 2% of the rural sector GDP. The total losses due to floods during 1991-2002
were about US$1,323 million, of which US$583 million during 1997-2002. A total of 1.3 million ha and
500,000 people are at serious risk of being flooded every year in 16 out of the total 42 counties. In the last
5 years it has been observed that the number of townships and villages seriously affected by floods has
increased from 300 to over 800. Every year for the last 6 years flood damage has exceeded over $120
million, and in some years over $200 million. These are direct asset losses and do not account for all the
economic losses.
Figure 1 shows the flood vulnerability between 1994-2001 as a function of GDP. The losses are
significant and translate into 4 to 5% of the GDP growth in real terms.
Figure 1. Romania--Flood D a mage as a % of GD P
0.80%
0.70%
0.60%
0.50%
0.40%
0.30%
Flood damage % 0.20%
0.10%
0.00%
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Year
Though flooding is a natural phenomenon, man-made developments have increased flood vulnerability
substantially. Most of these vulnerabilities have been created by developments in the flood plains,
especially those river basins that have not been protected. In addition, much of the man-made vulnerability
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is due to poor safety of dams constructed in the past. Some of the dams have failed or do not have the
capacity to be operated properly so flood vulnerability has increased substantially.
Flood Defense for Internal Rivers.
In general, the water regime of the Romanian rivers is
characterized by high flows during February through May and low flows during the rest of the year.
Repeated and intense floods constitute one of the characteristics of the hydrologic system. The highest
frequency of floods is observed during the March-June period, while the least frequency is during January
and August till September. From 1991-2002 the total flood damage was $1.32 billion, and there seems to
be a slight increase in flood damage over the years, although there are anomalies for 1991 and 1995 when
flood damage exceeded $200 million.
Despite substantial capital investment carried out in this area, there is still a large area without any flood
mitigation works, about 11,000 km2 (1.1 million ha) being still unprotected.
Flood Defense along Danube River.
Floods along Danube River frequently occur in spring, as a result
of snow melting in its tributaries' basins, located mainly on upstream and mid-stream sectors (Germany,
Austria, Czech Republic, Hungary and Serbia). Floods can also occur during other seasons as a result of
heavy rainfalls in Europe or in Romania overlapping with high levels of the Danube. To protect side areas
from floods, embankment works started in 1925 and continued, at variable pace, until late 1970s', reaching
protection of about 50,000 ha in 1940s' and over 430,000 ha in 1989, through a total length of
embankments of 1,136 km. Due to these works, stable agriculture farming, agro-processing activities, trade
and industrial activities could be developed.
In the last decade, the aggressiveness of the Danube River increased mainly due to combined effects of low
sediment transport (stopped by various dams on its own course and tributaries), increased naval traffic,
changes in daily flow (due to power generation), and changes in river bed morphology. As a result, bank
erosions became more active, reducing the width of the safety band (bank-dike area) and endangering the
safety of embankment works. The Danube dikes are being seriously threatened by the erosion of the
riverbanks, which makes many cities and towns vulnerable to floods. Failure of these dikes could result in
flooding of large areas and affecting hundreds of thousands of people, many towns and cities and resulting
in damages of hundreds of millions US$.
Large Dam Safety. Romania has 246 large dams (according to common definitions), including both
permanent and temporary storage reservoirs. Most of these dams belong to the main two dam holders in
Romania, namely the Company of Hydroelectricity (Hidroelectrica S.A.) that administrates the facilities
having as main purpose the production of electricity, and the National Administration - "Romania Waters"
(Apele Romane) that is responsible for storage reservoirs for flood protection and water supply. "Apele
Romane" owns 144 of the large dams, out of which 55 dams are unsafe and on a priority list of the
National Commission for dam Safety (CONSIB) as subject to special monitoring. It is estimated that the
economic losses as a result of failure of the dams could range from $300 to $400 million and would cause
loss of many human lives. The safety of the major dams is fairly established, but there is still a number of
dams that are not completely safe due to uncompleted or improper design and construction resulting in
abnormal seepage, large and growing displacements, faulty hydraulic equipment, etc.
Small Dams Safety. There are about 1,260 small, local dams, the condition of which is not very well
known. These dams are administered by organizations such as National Forest Administration (NFA);
SNIF (National Company "Land Reclamation"); fishing companies; the local public administration (rural);
or local companies, which represent the largest share. Those dams are mostly earthfill dams with small
heights producing small storage reservoirs. These dams and the storage reservoirs can generate serious
problems at the local level. Most of the dams have execution faults. The execution of smaller units
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(farming and fishing ponds of the former farming cooperatives) was carried out without technical
documentation or water management authorizations. The downstream riverbeds are not regulated or, due
to inappropriate operation, are strongly eroded and have a low riverbed. The storage reservoirs except
some of those administered by NFA and the PISCICOLA fishing associations, lack sufficient personnel,
response system, maintenance and repairing plans, etc. At most of these facilities, the high waters
spillways are either undersized or completely missing making the floods routing impossible. Due to the lack
of the works for high waters routing, many of these dams were damaged or destroyed during floods.
Landslides. Romania has 987 administrative units (34 municipalities, 78 small towns, 875 communes)
that are under the risk of landslides. Most of the localities fall in the high risk category (32 % of
municipalities, 37 % of small towns and 59 % of the communes). At the beginning of 2001, according to
the MAFRD data, 702,000 hectares of the total area of Romania was affected by landslides. The
magnitude of individual landslide event ranges from a couple of hectares to 585 hectares (Lunca landslide
in Vasluiet watershed). Landslides bring damage to housing, public buildings, roads, other infrastructure,
as well as cause disruption of economic activities. The risk is mostly concentrated in seven watersheds:
Upper Barlad (88,700 ha), Vasluiet (45,464 ha), Racova (48,534 ha), Crasna (25,942 ha), Tutova (62,164
ha), Middle Barlad (117,541 ha) and Prut (151,235 ha).
The landslides are triggered by natural and man-made causes. Natural causes are generally due to rainfall,
snow thaw, and earthquakes. Man-made causes are: bank erosion and excavations at the toe of hill,
overloading of hill slopes by construction of buildings or roads, causing slide of slopes when it becomes
saturated with rain water. Proper planning and prevention of deforestation above slopes can substantially
reduce the landslides.
Government Actions. The Government of Romania is aware of the serious risks posed by the floods and
landslides, and has taken many effective steps to address them.
Flood Defense on Internal Rivers. With the support of the technical community, all areas of internal river
risk were identified and many studies have been undertaken. Apele Romane has also identified all the high
risk river basins and high risk rivers and river sections, and areas which are vulnerable to annual damage.
The Government has not only planned to take risk reduction measures but, based on the detailed studies, it
has developed a comprehensive overall master plan to reduce flood and dam safety risk. This master plan
for river basins has been estimated to cost about US$1 billion over the next 10 years.
The Government, with the Apele Romane as the executing agency, has also taken an initiative in view of
the urgency of flood control to obtain several sources of funds from the European Union and other
international donors to implement critical flood defense projects. A total of EURO 400 million has been
obtained to implement flood defense projects. These projects are part of the above mentioned master-plan to
eliminate frequent flood losses in many of the North and North Western areas of the country.
Flood Defense along Danube River. Taking into account the increasing vulnerability to floods and
following bank erosion and potential collapse of embankments, the Ministry of Agriculture, Forestry and
Rural Development through SNIF, has commissioned in 1993-1994 a master plan for capital investments
in protection of the Danube River flood plain, including detailed inventory of all dykes and protected areas
(polders). The study was subsequently used for preparing an investment strategy, based on prioritization of
interventions according to a set of economic criteria. The total investment program is estimated to cost
about US$60 million. The overall priority program was approved by MAFRD, detailed projects were
prepared, and construction works started for securing the safety of first priority areas having the highest
risk and best economic return of rehabilitation investment.
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Landslide Risk Reduction. Realizing the magnitude of landslide hazard, the Government passed a Law
575 of October 22, 2001 (Plan of Management of National Territory ­ Section V ­ Areas of Natural
Hazard), which provides a summary information on landslides in Romania and clearly identifies all
communities under landslide risks. The law stipulates that all areas at serious landslide risk are set aside
and should not be developed. However, the maps included in the legislation only indicate communes but not
the specific areas with risk of landslide located within given community. Therefore, the land planners and
decision makers need more detailed digital maps and models to determine under what conditions the
landslides may occur.
Component Description:
The activities to be supported by this project component are designed to reduce flood and landslide risks of
the most vulnerable rural and urban communities. These project components were selected after careful
prioritization using specific criteria based on economic and social losses, environmental impact, and
safety of structures.
Sub-component C.1 Flood Protection Infrastructure ($28.94 million)
This component will provide support to rehabilitation and upgrading of flood protection works in areas
with high flood vulnerability. This will also include improvement of flow conditions. It will focus on the
flood defenses of internal rivers. There are 9 sub-projects included under the project located on the
following rivers: a) Tarna, b) Tarnava, c) Cibin, d) Prut, e) Balint, d) Teleorman, e) Valsan, f) Slanic, g)
Babadag. Most of these projects are located in rural areas. Project selection was based on the vulnerability
of the areas to floods and the damages that have been measured in the past. The schemes fall in the
categories of very highly vulnerable or high vulnerable to floods counties.
The flood defense sub-projects consist of riverbank protection, riverbed control (necessary due to deep
scouring which makes the riverbanks unstable), and repairs or reconstruction of dikes damaged by previous
floods. In more detail, the project will finance the following categories of capital investment:
·
Rebuilding and repairs of dikes in those locations where they broke down (breaches) because of
previous floods
·
Increasing height of dikes in the areas where the tops of dikes are below provisioned flow level or
where the 50 cm construction safety freeboard does not exist
·
Building of new dikes in the discontinuity areas (where dikes are not completed) or polder dykes to
protect certain communities
·
Extension of dikes in the fixing areas due to increasing top height according to provisioned flow
plus freeboard level
·
Quarry clay protection of existing dikes as to stop water infiltration during high flow periods
·
Bank protection in areas with active erosion or in the sectors where the bank - dike area is very
narrow or it does not exist and the dike is endangered by bank erosion
·
Underground discharges for water delivery outside confined areas
·
Construction of low dykes (where appropriate) or walls of 1-2 m where dykes are not possible
·
Improving river bed condition and improve flow regime
The required works for each location were identified in the feasibility studies. Selection of the sub-project
locations was conducted based on a prioritization process carried out by the MAFRD through Apele
Romane. The prioritization process included a set of criteria, such as inclusion of the proposed sub-project
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in the MAFRD master plan, current safety of existing flood protection works, population at risk, value of
damages avoided through the sub-project, and stage of designs preparation.
Sub-component C.2 Danube River Bank Protection (US$ 6.81 million)
The sub-component will finance rehabilitation of existing flood protection structures along the Danube
River, in three sections where the flood vulnerability is very high and the existing dykes are endangered by
the aggressiveness of the river. The selected sections are located on the downstream sector of Danube
River; three of them are part of the overall embankment of Borcea Island, on Borcea Branch, as identified
below:
a) Borcea Island ­ Bentu Section
b) Borcea Island - Bordusani Section
c) Borcea Island - Facaeni Section
The main works to be carried out will consist of riverbank protection with the use of revetments and
underwater riprap protection. The three schemes have been selected based on the critical nature of the bank
erosion on the Danube River. The protection works will stop the erosion of the riverbank and high river
flow towards the dikes and thereby ensure their safety. The locations were selected from a group of first
priority locations, ranked following a prioritization process (as above) based on a set of criteria including:
intensity of Danube bank erosion; safe operation of dikes for maximum protection provided to respective
polders; value of damages avoided inside embanked areas (damages estimated in case of dykes collapse);
total capital investment cost; and ratio of investment to avoided damage.
Sub-component C.3 Large Dams Safety (US$49.43 million).
There are 8 large dams which are regarded as unsafe and need immediate rehabilitation so that their safety
and operation is restored. These are: a) Dridu, b) Varsolt, c) Berdu, d) Poiana Uzului, e) Maneciu, f) Lesu,
g) Valea de Pesti, and h) Siriu. Due to the Romanian dam safety requirements the water levels are kept
well below the normal operating level and most of economic functions (irrigation, water supply,
hydropower generation or flood control) of the reservoir are never fully performed.
In case of all these dams, there have been identified leakages through the dams or through the
embankments. The outlet structures, irrigation and power tunnels have corroded, are unsafe, and need to be
replaced. Many of the spillways are under-sized for the check floods. Many of these structures were
constructed at a time when funds were very scarce, and therefore, the proper construction procedures were
not followed. For example, the tests on foundation grouting were never completed because of lack of
funding. Typical rehabilitation works to be undertaken will be as follows:
·
Works at dam foundation and grouting
·
Dam upstream/downstream slope reshaping
·
Spillway repair/rehabilitation works to secure safe operation
·
Reservoir banks protection in the areas with strong erosions
·
Replacing/rehabilitation of the existing drainage system
·
Realignment of roads
·
Execution of drillings for discharging the water from galleries
·
Reservoir anti-erosion stabilization by development of forest belt around the reservoir
·
Rehabilitation of the monitoring system, provision of new equipment
·
Rehabilitating the warning system for emergency situations
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Detailed works for each dam were included in the feasibility studies. It should be noted that all dams will be
fitted with proper monitoring equipment: piezometers, inclinometers, deflection measuring devices,
settlement monitoring monument gauges, etc., so that future safety can be continuously monitored and
corrective actions can be taken to ensure long term safety of the dams.
Dam Safety Panel. The project will also support the Dam Safety Panel (both local, and foreign
consultants) for a period of 5 years. The actions and provisions to ensure compliance with Bank dam
safety policies are outlined in section E.7 of the PAD.
Upgrading of Monitoring Equipment And Software. In addition, the project will finance upgrading of
Apele Romane's software and equipment for the purpose of alerting the monitoring group in case any
threshold parameters of the intensely monitored dams are violated.
Environmental Advisory Group. The activities supported by component C will have an environmental
advisory group in addition to the local environment supervisor who will implement the Environmental
Management Plan. The environmental advisory group will consist of foreign experts and will be funded by
the Project.
Sub-component C.4
Small Dams Safety (US$15.22 million).
There are several small dams that have been identified as critical and in need of immediate rehabilitation to
ensure their safety. These are: a) Bozovici, b) Sanmihaiul, c) Catamarasti, d) Buftea, and e) Pucioasa.
Many of these dams have a high probability of failure. The typical works that need to be undertaken are
the following:
·
Refurbishment of gates, water intakes
·
Removal of sediments and cleaning of closing structures (gates)
·
Repair / rehabilitation of spillways
·
Repairs of drainage works
·
Sediment retention works upstream of the reservoir, to reduce further siltation
·
Repairs/replacement of equipment
·
Rehabilitation of the monitoring system and early warning systems
The small dams will be equipped with a scaled down version of monitoring equipment to ensure that safety
of the structures can always be gauged, and corrective actions can be taken if there are any deficiencies in
the design or the construction.
The CONSIB has reviewed all the dams proposed under this project and a special panel consisting of 6
members have been appointed to ensure that the requirements of Bank Safeguards on Dam Safety are
fulfilled. The Panel of Experts includes the following specialists: geotechnical expert, geologists, dam
structures expert, construction engineer, hydraulic engineer, and hydrologists.
Sub-component C.5 Landslide Pilot Area Studies and Development of Standardized Monitoring
Manuals (US$0.69 million)
The landslide risk reduction activities will support development of a standardized monitoring program
based on pilot studies. This program will be used to monitor key local sites which have high risk for
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landslides. The project will support development planning by the local authorities, and will allow for better
informed mitigation and emergency preparedness activities in the communities at risk.
Pilot Landslide Monitoring. The activity is designed for two pilot areas, for which the GIS maps will be
developed and will include information on morphology, hydrogeology, land use, soil type, soil strength, etc.
It will allow for collection of the long-term data for the model refinement. The two pilot areas will be used
to gauge ground movement and ground water pressure per second. Slope movement will be recorded with
instruments which detect stretching and shortening of the ground. Ground vibrations caused by slide
movement will be monitored by geophones put within the slide. Ground water conditions within the slides
will be monitored with sensors, and rain gauges will record precipitation.
Development of Models to Predict Landslides. Based of the data collected in the first phase of the
sub-component implementation, the landslide risk forecasting models, under different conditions of soil,
land slopes, land cover, and rainfall will be developed and tested. The model will require the use of finite
element or finite difference visco-elastic models for slope failure. In order to expend the knowledge in
Romania on landslide forecasting, an integral part of the activity will be international training for the key
Romanian researchers.
Development of Manual for Monitoring of Landslides for Critical Areas and Development of Emergency
Preparedness Systems. Based on the pilot area studies, a manual will be developed which will describe in
detail the requirements for monitoring of critical landslide areas. The manual should cover the following:
·
Mapping requirements in GIS format for eight or more key layers of information: morphology,
hydrology, hydrogeology, geology, depth of soil to bed rock, land use, soil type, soil strength, etc;
·
Developing an optimal grid to locate key monitoring equipment which will define in detail the
landslide area and its movements;
·
Key equipment and sensor needs to monitor ground stretching, shortening, vibrations, groundwater
levels, rainfall, surface runoff, soil moisture levels, etc.
·
Data logging devices for key monitored data and transmission of data to centralized data collection
computers;
·
Developing key representative parameters for input to models;
·
Use of finite element or finite difference using visco-elastic methods of predicting ground creep or
ground movement and the ultimate slide;
·
Development of warning systems and emergency preparedness program for major landslides. The
emergency preparedness system will define areas to relocate affected people where they can be
provided with food, shelter, sanitation, public health, transportation, etc., as required.
Project Component D: Risk Reduction of Mining Accidents in Tisza Basin - US$15.25 million
(US$6.24 million GEF, US$5.48 million IBRD, US$3.53 million GOR)
Objective. The development objective of this component is to reduce the risk of water and soil
contamination and loss of human and aquatic life from catastrophic mining accidental spills of pollutants.
The global environmental objective is to demonstrate and provide for replication for the reduction of
catastrophic accidental spills of transboundary pollution loads from mine operations flowing into the
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Danube and Black Sea basins. In support of the above-mentioned development and global objectives, the
project will assist in the piloting and replication of hazard prevention and remediation activities for
improving the management and safety of tailings dams and waste dumps facilities; and in catalyzing
transboundary cooperation on integrated water resources management in the Tisza basin . Two high-risk
and high-priority sites, Rosia Poieni and Baia Borsa mines, have been identified for hazard prevention
interventions during the initial phase of the project. These sites require emergency action. Additional sites
are expected to be identified during project implementation. A key indicator of this component's success is
the gradual reduction in the number and the negative impacts of mining accidental spills of pollutants into
the Tisza Basin. The successful implementation of this component will serve as a model for replication for
reducing mining accident risks to human and aquatic ecosystem health throughout Romania and other parts
of the Tisza and Danube basins.
The design of this component has benefited from a review of international experience; previous and
ongoing work undertaken by ICPDR, the Austrian Ministry for Foreign Affairs, and the United Nations
Environmental Program as part of the Awareness and Preparedness for Emergencies at Local Level
(APELL) Program; and from suggestions and recommendations that emerged from a Regional Workshop
on the Management and Safety of Tailings Facilities, which took place between October 8 and 10, 2003 in
Romania. The review of international experience will continue during project implementation. The project
will also foster synergies with other ongoing programs in the Tisza basin, e.g., prevention of industrial
hazards project supported by the French Government, the risk mitigation project at Novat dam supported
by the Austrian Government, among others.
Background. The Tisza River and Water Resources Management. The Tisza River with about 970
kilometer (km) in length is the largest tributary to the Danube. From its total length about 160 km lies in
the Ukraine and Romania border, about 650 km in Hungary, and 150 km in Serbia and Montenegro. Its
catchment area of 0.157 million square kilometers is distributed as follows: about 46% of the catchment
area lays in Romania, 29% in Hungary, 9.7% in Slovakia, 8.1% in Ukraine, and 6.6% in Serbia and
Montenegro. The volume of flow of the Tisza River passes across international boundaries. In order to
ensure the long-term protection of the river ecosystem, transboundary co-operation on integrated
management of the Tisza River Basin is required.
Romania as a candidate for membership of the European Union is committed to adopt and implement the
EU environmental directives, including the EU framework directive for water management. The EU Water
Framework directive introduces the concept of management of river basin as an integrated approach and
calls for the elaboration and implementation of a river basin management plan for achieving "good water
(quantity and quality) status," which shall address among other issues, point-source pollution reduction
(including those of mining activities), prevention and mitigation of threats from land-based sources of
pollution, chronic and accidental pollution, flood control and management, and conservation of aquatic
ecosystems. At the national level, efforts are under way to amend the national legislation and harmonize it
with EU directives and to prepare management plan for the Upper Tisza Basin. At the regional level, the
countries in the Tisza basin, namely Ukraine, Slovakia, Romania, Hungary and Serbia and Montenegro
have just started dialogue on basin-wide management under the EC Tisza River Basin Project Tisza and
the UNECE River Basin Sustainable Development Program.
Romanian Mining Sector. The Romanian mining sector has a long tradition and is important to the country
and has a good future in terms of reserves and potential exploitation. Currently the sector faces difficult
challenges in relation to economic, social and environmental requirements. Total direct employment in the
mining industry is about 10%, and is higher than in any other European Union country. Long-term
impacts on the environment and human health have occurred as a result of diffuse pollution from sites
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subject to mining activities over centuries. The Government has launched a restructuring of its mining
industry, and efforts are underway to close uneconomic mines and address environmental liabilities. This
undertaking is supported by the FY99 Mine Closure and Social Mitigation Project (MCSMP).
Privatization of the sector is also part of this restructuring, which poses additional environmental
challenges related to environmental liabilities from past mining operations. A follow-up Bank-supported
project scheduled for FY05 will assist the Government in addressing the social and environmental issues
associated with the further restructuring of the mining sector including improving the safety of tailings
dams of closed-mines.
The Government is committed to improve the environmental performance of the mining sector, and has
recently completed a comprehensive Mining Sector Environmental Assessment (MSEA), which provides a
baseline evaluation of the state-owned and private mines throughout the country. The MSEA identifies
the main environmental issues arising from ongoing mining activities, and priority areas for future
environmental remediation/mitigation efforts. The MSEA has identified that a large number of operating
mining sites require urgent environmental rehabilitation of their tailings and waste storage facilities to
avoid catastrophic and continued releases of highly persistent toxins, thus reducing the risk of mining
accidents with long-term environmental consequences.
Accidental Pollution Threats. According to available information, there are 264 facilities constructed to
store mine tailings throughout Romania, out of which about 40 pose a severe threat to the surrounding
human population and the environment. A recent inventory in the Tisza Basin has identified 17 tailing
facilities as potential risk spots. Romania has a large number of abandoned tailing storage facilities and
mine waste rock dumps, which are also sources of contamination. As proven by the two accidents in
northwestern Romania in 2000, Aurul S.A. Mine and Baia Borsa Mine, the failure of tailings storage
facilities can have serious and devastating consequences. These tailing disposal facilities accidents
heightened concern in the international community, primarily those bordering the receiving surface waters,
that tailing facilities represent a major risk to the environment, both in the short- and long-term. According
to field investigations, the two reported accidents could have been avoided if adequate quality assurance
and technology were used in the design of water management (in particular, flood handling components) of
the facilities, proper forecasting system linked to existing rainfall and snow pack gauge stations,
continuous monitoring system, and a proper emergency preparedness and response procedures by the
companies and local authorities were in place.
Several actions were taken at the Aural mine to reduce the risk of catastrophic accidents. The
closed-circuit water management system at the Aurul mine was upgraded and adjusted to higher load cases
after the 2000 accident. In addition, the tailings dam was repaired, additional capacity for cyanide
containing process water was created, erosion control and stabilization measures of the dam body were
increased. The freeboard of the dam increased significantly to allow for extreme climate events. The
tailings facility is in compliance with international best practice. At present, the use of cyanide is not
banned in Romania. While use of cyanide continues at the Aural mine, environmental matters are
respected, emissions are kept within acceptable limits, and the site is regularly inspected by the
environmental authorities.
Factors contributing to high mining accidental water pollution risk in Romania in general, and the Tisza
Basin in particular, are as follows:
Poor management of tailings dams and waste facilities. The risks present at tailings dams facilitiesare
several, but the most important are: breach of dam structure and discharge of tailings, slope instability of
waste dumps, poor water management and seepage of contaminated water into surface and groundwater,
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dust emission from dry tailing surface by wind and deposited into water bodies, soil erosion associated
with wind and rain water, hazardous chemicals, acid mine drainage and heavy metal contamination.
Tailings dams facilities present the greatest threat from a sudden failure as experienced in the overtopping
failures at the Baia Mare and Baia Borsa mines in 2000. Instable waste dumps located upstream of the
tailings facilities also contribute to the risk of failure.
Limited investment on environmental improvement in the mining sector. The Romanian mining sector has
a legacy of extensive environmental degradation. There is a growing awareness of these problems but little
effective action to solve and prevent them. All environmental agencies and natural resource management
agencies considered mine tailings and mine-related wastes as the number one environmental contamination
threat. However, due to economic constraints, environmental-related investments by the mining companies
in Romania are limited. Many mining wastewater treatment facilities are in poor condition and are
working with a minimum of efficiency. Under present conditions, large volumes of polluted wastewater are
discharged directly into the environment. The recently prepared Mine Sector Strategy however recognizes
the importance of addressing tailings dams facilities and calls for more financial support.
Insufficient knowledge about the extent and risk of mining-induced pollution and lack of reliable
information. Baseline conditions in the surface waters and receiving waters in the Tisza catchment region
are limited. The nature and extent of potential risk associated with mine-induced pollution can not be
assessed with current data. This limits progress on establishing risk based cleanup levels and on evaluating
the performance of mine and dam tailings water quality improvement projects as well as success of
emergency response actions. In addition, there is a significant lack of reliable information about past design
assumptions as well as construction conditions.
Limited institutional capacity to implement and enforce regulatory instruments and standards. The
continuation and exacerbation of mining accidents is not caused by the lack of regulatory instruments or
standards, or by the absence of institutional organization. They are mainly due to a lack of implementation
and enforcement of the current regime. Both human and financial resources are scarce; awareness and
understanding of complex environmental factors (including weather) in the mining sector is limited, and
agencies that support and regulate tailings facilities lack specific experience.
Emergency response plans are in place but some are outdated and often are not effective. According to
the Romania Water Law, each company should have an emergency response plan. Although many
companies have such plans, capacity for implementation and coordination with local and central authorities
is poor. Mining companies and regulatory agencies have voiced the need for improved in-house risk
assessment and risk management capability, real time monitoring and response capability in order to
increase their contribution to management decisions related to tailings dams facilities.
Government Policies and Strategies and Ongoing Programs. The Government policies and programs to
mitigate the risk related to mine-induced pollution in Romania are as follows:
Reorganization of the mining sector. In 1998, the Government of Romania launched the reform of the
mining sector. A new Mining Law was passed in 1998, which sets modern rules for the management of the
mineral resources. Implementation of the reform is ongoing. Several unprofitable mines have been closed
and environmental and safety concerns are being addressed in the decommissioning and post-closure
phases.
Legislation on the safety of tailings dams. After the two accidents in the Maramures region, the
Government decided to harmonize tailings dams legal framework with international practice and
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procedures and in 2001 the Dam Safety Law was amended to address the safety of tailings storage
facilities. This assumes particular relevance in the context of the recent update of the World Bank
safeguard policy on Dams Safety. Regulations are being prepared to provide guidance on how to enforce
the legislation. Romania has established index prioritization procedures for tailings dams facility, which
aim at risk-based prioritization rather than broader risk management objectives. Limited data precludes
quantification of realistic risk indexes.
Mine closure procedure manual. Under the MCSMP a Mine Closure Procedure Manual for the closure of
state owned mines has been drafted and issued as a Ministerial Order. Drafting of a version of the Manual
for privately owned mines and eleven annexes to support both Manuals are under preparation. These
annexes will include guidelines on the decomminisioning and rehabilitation of tailings dams and waste
dumps.
Environmental improvement in the mining sector. An environmental action plan has been drawn to
mitigate environmental impacts in each sub-sector and a pilot environmental action plan for Lipuna Mine
has been prepared. The Government is committed to improve the environmental conditions in the mining
sector, and is currently establishing requisite mechanisms to ensure implementation of priority investments.
Improving knowledge base. Several government and donor activities relevant to the proposed project have
supported development of information and monitoring systems in the Maramures region, i.e.,
UNEP-supported risk assessment and environmental impact assessment, EU-supported compilation of
available data to determine causes and effects of the spills, ICPDR-supported identification of pollution
sources, Italian-supported risk environmental and health impact risk assessment, WWF-supported
assessment of impacts of the spills. The effectiveness of these efforts however is hampered by lack of
adequate equipment and mobile analytical capability, transport and computers. Moreover, methodologies
for data collection and transmission is not standardized, e.g., each entity used its standard for "sea level" or
elevation benchmark rather than that used by Romania. Analytical data was also not comparable due to
varied analytical methods and sampling methods. In some cases analytical results varied by over 112 fold.
This resulted from variations in sample preparation (filtered vs. unfiltered and digested vs. undigested).
Emergency response capability. Plans are under way to transpose the EU Water Framework Directive,
which calls for measures at the watershed and basin levels to prevent significant pollution from these
facilities and reduce the impacts of accidental pollution incidents, and for installation of systems to detect
or give warning of such events. The central and local governments don't have yet the response capability to
address emergency situations and to monitor response activities and corrective actions in a timely manner.
Outstanding Issues. The outstanding sector issues that remain to be addressed include:
Regulatory framework on the safety of tailings dams. The current system on the safety of tailings dams
can be improved by independent verification of the status of the facility. At present, the information used to
perform risk categorization is provided by the mine operators or designers. Experts from the design
institutions, certified to perform dam safety evaluation, are sometime among the permanent members of the
dam safety commission (CONSIB). The proposed project envisages the involvement of two international
experts to strengthen CONSIB. One of the experts will focus on the safety of tailings facilities and mine
waste dumps and the second will focus on failure modes and effect analysis. This arrangement will allow
to bring competence and expertise from abroad (international/regional experts) to reduce the risk of
mistakes in design, construction, operation and management.
Financing. The Government will need to provide financial support to mines to improve their
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environmental performance and address historical legacy and inherited liabilities of operational and closed
mines. The MCSMP is currently financing the closure and rehabilitation of 29 mines in line with good
industry practice. The Government is financing the closure of a further 262 mines using state budget
resources. The Mine Sector Strategy prepared recently by the Government recognizes the importance of
addressing environmental liabilities and call for more financial support for these purposes. The 2004-10
Government program in the mining sector plans to allocate US$150.7 million for investments on
environmental rehabilitation of mines that will be closed and privatized, including improvements on the
safety and management of tailings facilities. The Government and the Bank has just started discussions on
a FY05 operation to further advance the implementation of the Mine Sector Strategy .
Baseline. Improved baseline, information and knowledge base is necessary to support decisions on
improving the safety of tailings dams and protection of water quality. Lack of reliable data is a significant
impediment to the effective implementation of the current system for ranking tailings dams facilities. A
comprehensive inventory and a detailed assessment of all abandoned and active mining sites and tailings
dams in the Tisza basin has recently being completed and is being subject to verification. A similar
inventory of waste dumps facilities is still missing. Similarly, a comprehensive assessment of existing
contamination in the region is not available.
Strategic planning and coordination. The central government should play a stronger role in the area of
strategic planning and coordination by helping to identify a priority range of corrective measures on the
basis of a risk assessment of all mine sites (abandoned and under operation). Given the large number of
mine sites that require improvements, there seems to be a need to try to strike a balance between being
cost-effective and technically and scientifically comprehensive, detailed and sound. A more soundly based
risk management approach to identify the best way to phase investments so that available resources can be
channeled to those measures with the highest benefits ­ i.e., those that bring risk reduction and greater
public safety, protection of water quality (surface and groundwater), soil and aquatic ecosystems as well as
the economy of Romania and across the boarder needs to be put in place. Under the project, a Regional
Task Force will be established to assist in getting the right balance so the project can maximize risk
reduction within a reasonable timeframe and with tolerable cost, and bring the residual risk to an overall
sustainable and acceptable level.
Environmental and water management monitoring. The environmental and water management monitoring
systems need to be strengthened and laboratories should harmonize analytical procedures and establish a
system of accreditation. Cooperation between various organizations involved on water quality monitoring
needs to improve, as well as their roles need to be clarified. Several agencies have responsibility for surface
water monitoring, mine environmental compliance and mine operation. It appears that operation and
oversight may be held by the same agencies. For example, the Ministry of Agriculture, Forestry, Waters
and Environmental Protection and the Local EPAs have limited monitoring capability and often rely on the
regulated agencies and companies to provide them with data to determine compliance. This severely limits
the effectiveness of the regulators. The proposed project will enhance the current environmental
monitoring capacity in the Tisza basin.
Emergency response capability. If the current system is to function adequately, the emergency response
capability must include appropriate response equipment, personal protective equipment, training, and
environmental monitoring equipment. A review of current response and monitoring capability revealed that
mobile analytical capability was nonexistent and local response entities lacked adequate personal protective
equipment and spill response equipment. The proposed project will enhance the current emergency
response capability in the Tisza basin. It will focus on strengthening capacity on emergency response,
monitoring and surveillance as well as on-site contingency and emergency preparedness planning and to
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improve emergency preparedness capabilities, particularly in relation to local communities at risk.
Rational for World Bank and GEF Support. The proposed project provides an opportunity to create a
forum for transboundary cooperation to reduce the risk of accidental mining pollution and to identify
concrete mechanisms to engage riparian countries in the development of integrated water and environment
management strategies. Moreover, the proposed GEF-supported component directly supports the goals of
the International Convention for the Protection and Sustainable Use of the Danube River. The 1994
Danube Strategic Action Plan under the Convention on Cooperation for the Protection and Sustainable Use
of the Danube River is concerned with transboundary water issues and includes provisions to protect the
Black Sea and Danube Delta against pollution by nutrient and hazardous. Until recently, most of the
attention on the Danube and Black Sea basins has been concentrated on reduction of nutrient loads to
address the problem of euthrophication in the Black Sea. The recent mining accidents in the Tisza
catchment area, however, have pointed out that additional priority should be placed to address
mine-induced water pollution and mining accidents.
Mining accidental spills in one country can have huge transboundary impacts in other riparian countries of
the Danube River and Black Sea basins. Communities and ecosystems located far away from the mining
region where the accidents takes place are at risk of pollution exposure. The recent mining accidents have
increased public awareness of the environmental and safety hazards of the mining industry and have shown
that the risk assessment and prevention of tailing dams pollution accidents have to improve. The long-term
protection of Danube and Black Sea water quality thus calls for addressing ongoing degradation of mine
tailing dams and continuous erosion of contaminants into surface waters of the area.
Component Description:
The component will identify, pilot and replicate cost-effective, efficient and innovative methods for tailing
facilities management; contribute to improvement of capacity at both the national and local levels to
conduct risk assessment and identify risk-based priority actions; establish comprehensive management
guidelines to improve the performance of tailings management facilities by Romanian companies;
strengthen capability to develop a long-term tailings dams risk/hazard mitigation strategy; strengthened
environmental monitoring program to assess performance of the mining industry; establish a regional
emergency preparedness and response system linked to the Danube Accident and Emergency Warning
system; and strengthen further regional collaboration on integrated water resources management. This
component will accomplish "on-the-ground-fixes" under Sub-component D.2. About US$13.85 million
will be devoted to physical hazards prevention and mitigation measures such as upgrading water
management systems and water treatment plants, structural improvements and the upgrading of the
geotechnical stability of retaining tailings dams and waste dumps, improvements of accessibility and
communication. A detailed implementation plan has been prepared for this component and will be part of
the PIP. The component will consist of the following activities:
Sub-component D.1 Establishment of a Baseline and an Environmental Monitoring System (US$0.87
million: US$0.65 million GEF; US$0.22 GoR)
The project would assist in the establishing of common baseline indicators for water, sediment and air
quality monitoring as well as the improvement and harmonization of Romanian environmental monitoring
system with those of the other riparian countries of the Tisza Basin. The improved system will allow to
monitor mining related impacts on streams and aquatic ecosystems, air and soil. The specific baseline
values and methods would meet international standards and would serve as benchmark values in evaluating
spill response and effectiveness of tailing dams remediation/reclamation activities for maintaining surface
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and groundwater quality in key catchments in the Tisza basin. Since EU requirements for dangerous
substances discharged to water have been transposed into Romanian legislation and approximation with the
EU Water Framework Directive has been completed, the environmental monitoring system will meet EU
standards. Apele Romana and the Regional Environmental Inspectorates of Alba Iulia and Baia Mare will
be responsible for implementing the environmental monitoring system and to maintain it after project
completion. The project will also support in strengthening institutional capacity.
The GEF funds will finance consultancy services to: (i) conduct baseline surveys to identify sources of
sediment-associated harmful or toxic metals and compounds within the catchment, and examine
distribution, storage and mobility of contaminant metals in river valley floors, floodplains and groundwater
sources; (ii) design of the environmental monitoring system (including a qualification system, numerical
indicators and methods to quantify them, and monitoring system necessary to identify extraordinary
pollution); (iii) develop operational and maintenance manual; (iv) develop a computer-based model to
forecast the long-term dispersal, storage and remobilization of sediment associated metals; and (iv) and
train technical personnel. In addition, the GEF funds will finance equipment needs for the environmental
monitoring system and will finance incremental operating expenses (on a declining basis).
Sub-component D.2 Hazard Prevention and Remediation Interventions (US$12.58 million: US$4.24
million GEF; US$2.86 million GoR; US$5.48 million IBRD. In addition, Austria and USTDA will
contribute with about US$1.3 million equivalent)
This activity will support the identification of a risk-based priority investment program for the Tisza River
catchment area and the implementation of efficient and cost-effective hazard prevention and remediation
measures in identified high-risk and high-priority hot spots in the Tisza Basin, aiming at improving the
safety and management of tailing and waste facilities, thus reducing the risk for catastrophic release and
the introduction of contaminants into surface waters contributing to the Tisza and Danube. This
sub-component will accomplish "on-the-ground-fixes," and about US$11.2 million will be devoted to
physical interventions to reduce the high-risk of failure of tailings facilities, such as upgrading water
management systems and water treatment plants, structural improvements and the upgrading of the
geotechnical stability of retaining tailings dams and waste dumps, and improvements of accessibility and
communication.
Inventory of tailings dams and waste facilities in the Tisza Basin. The project will finance consultancy
services to review the recently completed comprehensive inventory of tailings dams and waste dumps in
Romanian part of the Tisza Basin. This will involve site visits of selected individual tailings and waste
facilities to clarify status and risk situation, elaboration of a comprehensive list of tailings facilities,
indicating ranking of risks/hazard and a prioritization regarding further works.
Development of an improved risk-reduction approach. During project preparation, technical assistance
will be provided to Romanian experts to assess the existing conditions of two high-risk and high-priority
sites on the basis of a risk analysis, which will incorporate identified failure modes and effects analysis
(i.e., downstream consequences). A regional task force (including experts from Hungary, Serbia and
Montenegro, and Ukraine) will be formed to review and harmonize failure modes and effects analysis,
since a number of countries are affected by these consideration. The risk analysis will assist in identifying
the risk reduction measures in the two sites in a cost-effective manner. During project implementation,
advisory services will be provided to institutionalize a revised risk assessment approach and to expand it to
also cover waste dumps facilities, on the basis of the lessons learned during the preparation phase. The
project will support development of detailed procedures, covering geo-technical and environmental
hazards, and integrating them into the legal and administrative framework for the management of mine
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tailings facilities. Institution building measures, including potential failure modes and effects analysis
workshops targeted to mine owners, operators and regulators as well as training for tailings dam safety
regulators on risk assessment and risk management will also be provided under the project. This activity
will be carried out by the National Agency for Mineral Resources in close coordination with CONSIB and
assisted by advisors financed by the project.
Prevention and remediation works. During the preparatory phase, two sites have been identified as
high-risk and high-priority sites for which immediate and emergency remedial works are required during
the first phase of project implementation: (i) tailings dams and waste facilities associated with the Rosia
Poieni mine; and (ii) tailings dams facilities associated with the Baia Borsa mine. Criteria used in the
selection of these two sites include: (i) pose very high risks and hazards with significant and harmful
transboundary consequences in case of failure of tailings facilities; (ii) exceptional high risk ratings
according to Romanian methodology; (iii) typical tailings dams and waste facilities operations; (iv)
potential for replication of risk reduction measures to be supported under the project ­ nature of risks and
proposed measures are typical of many mines throughout the country; and (v) willingness of mine
operators to implement mitigation measures.
Additional high priority candidate sites for remediation works will be identified during project
implementation on the basis of a comprehensive risk assessment of all tailings dams facilities. While
waiting for the completion of the comprehensive risk assessment, CONSIB will be prompted to act
immediately on the immediate/emergency safety measures identified in the other tailings facilities in the
Tisza basin. Project funds might be allocated for physical improvements.
The Rosia Poieni mine is located in the south part of the Aries valley in the Apuseni Mountains. It is the
largest cooper open-pit operation in Romania, occupying about 40 BCM. The mine operation involves the
Rosia Poieni open-pit, a processing plant, three waste dumps and three tailings dams facilities (one is close
and two are under operation). About 130 million tons of mining waste is disposed of on three waste dumps,
two of which are located in close proximity upstream of one of the operational tailings lagoons. The
components of the mining operation, which have been assigned a particularly high risk during the
preparatory phase are listed in the table below.
Element
Identified Risk/Hazard
Valea Cuibarului waste dump Generation of high amounts of acid rock drainage leaching heavy
(250-300 meter height)
metals from the waste rock and low grade ore, geotechnically
weakening the rock fabric and having a negative impact on the
downstream Valea Sesei tailings dam facility.

Geotechnical failure of waste dump debris flows due to heavy
precipitation and melting snow could trigger large, rapid mass
movement that if reaches Valea Sesei tailings dam facility could
cause overtopping of the embankment dam and displacement of
acidic water.
Valea Sesei tailings dam facility Depletion of dam rockfill material and sub-erosion of limestone dam
(76 meter height)
base and abutments by acid rock drainage, causing increased seepage
and loss of fines through and under the dam body and geotechnical
destabilization.
Valea Sesei and Valea Stefancei Blockage or collapse of decantation system.
No. 2 tailings dam facilities
Valea Stefancei No. 1 tailings dam Blockage of spillway, erosion of dam crest/body and subsequent loss
facility
of tailings by overspill.

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The Baia Borsa mine for non-ferrous metals is located near Borsa town in Maramures County. The main
river within the area is the Cisla river. Tailings from the processing plants are placed in valley type tailings
dam facilities of uphill construction. Certain parts of the mine complex were shut down in 1997. Out of the
total five tailings dams facilities, only the Novat Pond is currently being used. The combined Colbu I and
Colbu II tailings dams facility is used as a stand-by and contingency facility. The Novat dam had failed in
March 2000. Novat is supposed to be one of only two closed-circuit tailings facilities in Romania, where
all discharge water is being recycled. The lack of proper operation and maintenance of the the surface
runoff diversion tunnel was the main reason for the March 2000 main dam breach: a 2.5 meter of thick
snow cover and a 5-hour period of heavy rainfall led to an uncontrolled increase of the water level. The
resultant overspill caused the total failure of the embankment. There were no sufficient contingency
measures or emergency plans to cope with these conditions. The components of the mining operation,
which have been assigned a particularly high risk during the preparatory phase are listed in the table
below.
Element
Identified Risk/Hazard
Embankment dam at Novat
Continuous seepage through dam body, especially around the
repaired breach area, and subsequent loss of fine material. Risk of
rapid and progressive piping failure.

Rapid failure due to liquefaction, which could be triggered by small
seismic event or even machinery vibrations.
Decantation facility at Novat
Inverse decantation system has been recently upgraded, but pumping
station is in very poor conditions and very close above the waterline
(risk of flooding in case of rapid rise of pond surface). A high risk of
repeated lack in dewatering capacity as in March 2000.
Access road and power supply
Overall improvement of emergency response capabilities.

During the preparatory phase, a risk assessment will be conducted for each of the two priority sites to
assist in the selection of remediation measures. The risk assessment will help assess what could go wrong
in each site ­ i.e., identification of the potential triggers and failure modes, the probability of failure, and
the consequences of failure, which will provide the basis for the development of a risk management system.
Criteria will be develop to guide to establish levels of acceptable or unacceptable risks. Risk assessment
will be conducted in close cooperation with riparian countries ­ see description of regional task force on
failure modes and effects analysis.
The project will support the elaboration of detailed engineering design and supervision of civil works.
Under the framework of this project, a few technical studies will be supported by USTDA valued at
US$1.0 million. The project will also support implementation of prevention and remediation works in the
two already identified priority sites, including (among other works) tailings dam stabilization (buttressing
the dam toe, strengthening the dam body, dam impermeabilization, stabilization of dam crest), emergency
spillways, deviation/diversion channels, backup reservoirs, upgrading/reconstruction of pumping facilities,
acid rock drainage treatment, waste dumps stabilization/rehabilitation/upgrading, and infrastructure and
communication improvements. The project will also support the upgrading of technical equipment and
operational training.
During the second phase of this activity, the project will focus on the replication of prevention and
remediation works in other critical mines sites located in the Tisza basin. The project will assist in
undertaking a portfolio risk assessment of identified priority tailings dams and waste dumps (from Activity
2.1), using a broad range of criteria developed during the preparation phase (e.g., tolerable risk criteria
such as probability of failure, population at risk, potential economic losses, potential environmental
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losses). This activity will finance consultant services for portfolio risk assessment, pre-feasibility and
feasibility studies, detailed engineering design and supervision during construction of civil works; as well
as the necessary civil works to mitigate the risks of failure.
Under the framework of this project, the Austrian government will provide financial support to Baia Borsa
mine to implement critical works for improving water management in its tailings facilities in addition to
emergencies preparedness and access. Total cost of these works will amount to US$300,000 equivalent
over year 2004 and it includes US$60,000 equivalent from the mine operator.
Sub-component D.3 Engineering and Environmental Guidelines for Tailings Dams and Waste
Facilities (US$0.21 million: US$0.16 million GEF; US$0.05 million GoR).
On the basis of the results of Sub-component D.2, the project will support technical assistance and training
for developing engineering and environmental guidelines for tailings facilities and waste dumps in the
mining sector that minimize environmental risks during operation and after closure. Key features to
consider during the development of the guidelines include: geotechnical stability, seismic strength,
resistance to flood events, capacity to collect runoff water, etc. It is anticipated that the guidelines will
cover the following topics: design and construction of new tailings dams facilities and waste dumps; safe
operation and upgrading of existing tailings dam facilities and waste dumps; planning ahead for closure
and safe rehabilitation of tailings facilities; and decommissioning and closing tailings facilities. Training
and awareness of mine operators and design institutions are required for effective implementation of new
guidelines. Training schedules will be established during project implementation and handbooks and
training material will be developed.
Sub-component D.4 Regional Mine Spill Disaster Response System (US$1.21 million: US$0.91
million GEF; US$0.30 million GoR).
This activity will improve the effectiveness of the current system for contingency planning, emergency
response, awareness, preparedness and communication and will support the development of a regional
mine spill disaster response system to deal in a incremental manner with the risks posed by accidental
mining spills of selected mining companies located in the Tisza basin. The regional mine spill disaster
response system will integrate the emergency response plans of targeted mines. Mechanisms will be put in
place to assess the hazards posed by the spills as well as for reporting information to those responsible for
taking action at the local, national and regional level (through the International Commission for the
Protection of the Danube River and the regulatory entities). This system will complement activities
proposed under the HRMEP, namely, Component 1, which focuses on strengthening and upgrading the
emergency response capacity, and Sub-Component B.2, which among other things will focus on upgrading
the flood forecasting and dissemination systems.
The project will finance consultant services to: (i) assist in preparing codes of practice and guidance on the
preparation and implementation of emergency response plans; (ii) develop training programs for designated
mining company personnel, who will be responsible for implementation of emergency response plans; (iii)
assist in the development and installation of emergency response plans for selected mine operations posing
high-level of risk from potential accidental failures of either tailings dam facilities or waste dumps with
mine operators and local communities; (iv) public awareness programs; (iv) develop and implement
training programs for technical and non-technical regional staff of the National Agency for Mineral
Resources, Environmental Protection Inspectorates, Apele Romane and Civil Protection on mining disaster
management and preparedness; and (v) develop technical specification for strengthening current
communication systems. The project will also finance the procurement of the needed communication
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equipment as well as incremental operating expenses (on a declining basis) for implementation of
emergency response plans.
Sub-component D.5 Promoting Transboundary Cooperation on Integrated Water Resources
Management for the Tisza Basin (US$0.37 million: GEF US$0.28 million; GoR US$0.09 million).
Recognizing that it is only through regional dialogue between riparian countries that sustainable
management of the Tisza basin can be achieved, during the preparation phase, Romanian authorities with
the support of the World Bank organized a Regional Workshop on the management and safety of tailing
dams facilities to start dialogue on the formulation of policies and programs geared to specifically address
tailing dams and mining safety. Participants at Workshop agreed to foster and promote transboundary
cooperation on the management of tailings facilities within the context of overall integrated water resources
management. A proposal was put forward during the workshop to establish a Regional Task Force to
review and harmonize the Failure Mode and Effects Analysis process and standards. The task force will be
conformed by representatives from the riparian countries of the Tisza Basin, who will have the support of
national policy makers. The project will support a first concrete step towards a basin-wide cooperation
among the riparian countries.
During project implementation other efforts will be supported to promote integrated river basin
management, building on existing transboundary and bilateral initiatives. The project will provide financial
support to allow Romania experts and institutions to further advance and promote dialogue on basin-wide
cooperation with other riparian countries and facilitate the development of a regional policy of cooperation
in the management of tailings and waste facilities in the Tisza and Danube basins as well as the drafting of
a proposal for a regional water resources project for the Tisza Basin (i.e., to support implementation of the
EU WFD). The project will strengthen recent and ongoing bi-lateral environmental agreements as well as
basin-wide initiatives directed towards integrated water resources management. The project will provide
financial assistance to cover the cost associated with keeping the Regional Task Force, the participation of
Romanian experts and decision-makers in regional events that promote transboundary cooperation on a
broad range of topics and issues, and organization of meetings and workshops with the participation of
upstream and downstream countries.
Project Component E - Project Management - US$5.21 million
(US$0.77 million GEF; US$3.14 million IBRD; US$1.30 million GOR )
This component will provide support for project implementation. The main items to be financed from the
loan proceeds include office equipment and furniture, means of transportation, staff salaries, staff training,
and incremental operational costs associated with establishment and maintenance of the PMUs and
implementing agencies located in the line ministries and responsible for implementation of relevant
components. The proposed GEF grant will finance the cost of the core staff of the PMU under the National
Agency for Mineral Resources.
Institutional Arrangements. The project will not create new institutions but will support the existing
government entities by setting up Project Management Units (PMU) within their structures. Each ministry
will be responsible for implementation of its component. This includes the full responsibility for all
technical aspects of the implementation, monitoring, financial management, as well as procurement. The
PMU located in the MTCT will be responsible for overall coordination and reporting including
consolidation of implementation progress reports and financial management reports for the whole project.
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The project components will be implemented by the following executing agencies:
l
Ministry of Administration and Interior (MAI), for Component A
l
Ministry of Transport, Constructions and Tourism (MTCT) for Component B
l
Ministry of Environment and Water Management (MEWM) for Component C, and
l
National Agency for Mineral Resources (NAMR) for Component D
Component A - Strengthening of Disaster Management Capacity. The Project Management Unit
(PMU) for component A will be located in MAI, and will serve as the nodal coordinating vehicle for the
activities included under the component. It will be responsible for assisting the ministry with procurement
procedures, including preparation of tender documents, execution of tenders, assistance in selection of
contractors; payment functions, accounting, and legal, financial and procurement record keeping. The
TORs for activities under the sub-component A.5 (Preparation of Catastrophe Insurance Program) will be
prepared by the Catastrophe Insurance Technical Working Group. The PMU will be staffed with key
personnel consisting of: Director; Disaster Information Management Specialist; Emergency Management
Specialist; Financial Manager; Accountant; Procurement Specialist; Assistant. The PMU staff will receive
specialized training on project management, procurement, and financial management. It is envisaged that
the implementation of activities under component A will be completed within 3.5 years, after which time
the PMU will cease its operations.
Component B ­ Earthquake Risk Reduction. The PMU for this component, to be located in MTCT, will
have dual functions: firstly, implementation of project component B, and secondly, reporting to the Bank on
overall project implementation progress. In the latter function, the PMU will receive quarterly reports from
other PMUs and implementing agencies, and consolidate them into a comprehensive reports to be submitted
to the Bank. Reporting formats were developed in consultation with all implementing entities and included
in the PIP. In its implementation function, the PMU will be fully in charge of procurement of works, goods
and consulting contracts, conducting all procurement activities, management of contracts, supervision of
works through site supervisors, management of project funds received from the Bank and state budget and
record keeping on component B implementation. The PMU staff will include: Director, Structural
Engineers, Environmental Specialist, Monitoring and Evaluation Specialist, Financial Manager,
Accountant, Procurement Specialist, Procurement Assistant, Executive Assistant, Office Assistant
(securing also translation activities), Driver. The PMU staff will receive training on project management,
procurement, financial management, projects monitoring and evaluation, and other subjects as necessary.
Component C ­ Flood and Landslide Risk Reduction. All component activities will be implemented by
the MEWM through its existing agency, the National Administration "Romanian Waters" ("Apele
Romane"). MEWM was assigned to implement under the project also the activities related to Danube River
bank protection and landslide risk mitigation (sub-components C.2 and C.5), which are under the statutory
authority of the Ministry of Agriculture, Forestry and Rural Development (MAFRD) but have been
delegated to MEWM. "Apele Romane", acting as implementing agency, will implement the project
through its staff (existing or newly recruited) and will be fully in charge of procurement, contracting,
technical and financial supervision on contracts, monitoring and evaluation of project results,
environmental supervision, reporting on project progress. Before project implementation starts, project
implementation agreements between MEWM and "Apele Romane" will be signed, and will include
provisions on roles and responsibilities of each party. MEWM, through its Department of Water
Management, will retain the overall responsibility of project implementation and reporting on the
component status. A small project monitoring team (PMT), including a technical and a financial staff
funded by MEWM, will be established at the ministry level. The staff assigned to the project by MEWM
and the implementing agency may receive training in Bank procedures in procurement, financial
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management, and other fields, as deemed necessary during project implementation. In addition, the loan
will provide funding for a Procurement Advisor who will help "Apele Romane" fully meet the World Bank
procurement requirements, particular with regard to the ICB contracts.
Component D - Risk Reduction of Mining Accidents in the Tisza Basin. Component D will be
implemented by the NAMR through an existing PIU, which is currently in charge of implementation of a
component of the Bank-financed Mine Closure and Social Mitigation Project (MCSMP). The NAMR will
retain the MSCMP PIU staff (Project Director, Financial Manager and Procurement Expert) to form the
PMU for Component D once the implementation phase begins. The current staff of the PMU will be
supplemented by an Accountant, Communication, Technical and Environmental specialists as well as
support staff. The PMU will also hire experts/advisors on-demand. The PMU will report directly to the
President of NAMR. Through June 2005, the PMU will continue to implement activities under the
MCSMP in parallel with the component D of the HRMEP project. The PMU will be in charge of
procurement of works, goods and consulting services, management of contracts, supervision of works
through site supervisors, management of project funds received from the Bank and state budget, record
keeping on component implementation. The PMU staff will receive training on project management,
procurement of works, financial management, projects monitoring and evaluation, contract monitoring and
supervision, as necessary. The HRMEP project will support financing of salaries and fees of the PMU
staff and technical experts/advisors (on-demand); incremental operating expenses; finance audit services
over the life of the project; and finance training of staff.
While the project envisages the National Agency for Mineral Resources to coordinate activities under
Component D, the NAMR will coordinate development of manuals, guidelines and training activities very
closely with CONSIB, MEWM, and the Ministry of Economy and Commerce. CONSIB will gradually
take responsibility for the elaboration of dam-safety related manuals and training activities.
Since the implementation of Component D involves several sectors, namely water resources, environment,
and mining, its implementation requires close cooperation between the Ministry of Economy and
Commerce, NAMR, mine operators, MEWM, Apele Romane, the National Environmental Protection
Agency, Regional Environmental Protection Agencies, and local authorities. In order to ensure smooth
implementation and that the project builds on existing structures, procedures and systems, the Government
of Romania has agreed to establish an Implementation Support Committee (ISC) for Component D to
address inter-sectoral issues relevant to project implementation. The ISC will comprise representatives
from the entities listed above, and will be chaired by the State Minister for Water (MEWM). The
NAMR-PMU will provide secretarial support to the ISC.
Regular coordination meetings will be organized during project implementation among the PMUs for
Components C and D in order to build a common knowledge base, particularly in the areas of flood
management and water-retention and tailings dam safety. International experts on dam safety funded under
the project would facilitate some of the coordination meetings.
All project PMUs and implementing agencies will secure annual audit of project accounts (Special Account
and Treasury Account), and submit the audit reports to the Bank for review and acceptance, at dates and in
terms established by the Loan Agreement.
The PMUs and the implementing agencies will be responsible for the following activities, for which they
will have to be delegated with relevant powers:
·
implementation of the respective project components;
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·
monitoring, including compliance with the relevant Bank policies, and evaluation;
·
financial management for the given project component;
·
development of Terms of Reference for the activities under their jurisdiction;
·
preparation of bidding documents and contracts for works, goods and consultancy services;
·
organization of, and participation in bids evaluation, according to their technical expertise;
·
signing of the contracts;
·
supervision of the contractors;
·
certification of delivered products;
·
making payments to the contractors from the respective Special Account;
·
managing the Special Accounts and monitoring of financial flows resulting from the contracts;
·
submission of financial and implementation reports in an agreed format to the MTCT for further
consolidation.
The PMU established in the MTCT will coordinate the project's overall financial management
arrangements, produce the project's financial monitoring reports, organize the project's audit, and provide
ad hoc advice to the project's other implementing entities, as required. The consolidated financial and
progress reports will be based on quarterly reports from other PMUs and the MEWM. The reporting
formats, agreed by all implementing agencies, are included in the Project Implementation Plan.
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Annex 3: Estimated Project Costs
ROMANIA: HAZARD RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT
Project Cost by Component
Local
Foreign
Total
A. Strengthening Response Capacity
6,951
3,063
10,014
B. Seismic Risk Reduction
36,326
26,725
63,051
C. Flood and Landslide Risk Reduction
52,400
36,811
89,211
D. Mining Accident Risk Reduction
7,274
6,437
13,711
E. Project Management
4,762
231
4,993
Total Baseline
107,713
73,267
180,980
Physical Contingency
9,001
6,577
15,578
Price Contingency
4,186
2,913
7,099
Total Project Costs
120,900
82,757
203,657
Front end fee
0
1,500
1,500
Total Financing Required
120,900
84,257
205,157
Project Cost by Category
Local
Foreign
Total
Goods
5,836
3,489
9,325
Works
96,928
71,616
168,544
Technical Services
274
0
274
Consultant Services
13,865
6,917
20,782
Training
264
539
803
Project Management
3,733
196
3,929
Total Project Costs
120,900
82,757
203,657
Front end fee
0
1,500
1,500
Total Financing Required
120,900
84,257
205,157
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Annex 4: Economic Analysis
ROMANIA: HAZARD RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT
Economic Analysis of Flood Risk Reduction Investments
Main Assumptions
The Flood Risk Reduction component of the Hazard Risk Mitigation and Emergency Preparedness project
will support activities which will:
a)
Reduce the flood risk and vulnerability of rural areas
b)
Reduce the risk of large and small dam failures and
c)
Rehabilitate dams to operate as safe structures which provide flood control, water supply to cities
and irrigation and, hydropower.
There are also significant social and environmental project benefits. In particular, flood control
infrastructure will substantially reduce the risk of loss of life in the case of a major rivers overtopping their
banks causing floods or dam failure. Historical records of large floods, where there were both advance
warning, and orderly evacuation, suggest that fatality rates of nearly 1 percent of the affected population
might be expected. Approximately 500,000 people live and work in areas that could be inundated by a
major flood due to overtopping of river banks or due to possible dam failure. No attempt was made to
estimate the value of human lives that might be saved by the project.
All investment costs, including physical contingencies, and operation and maintenance costs have been
taken into account in estimating the economic costs of the project. Economic O&M costs include:
contributed labor valued at the shadow wage rate, as well as other labor, management, maintenance, repair,
overhaul and replacement costs expressed as economic values.
Alternatives
Flood Defense Sub-Projects. The selected projects are all very high priority in terms of impacts and have
been selected out of a portfolio of one billion dollars, as the most critical for implementation. There are
three categories of projects:

a) Flood defense projects
b) Large dam safety projects
c) Small dam safety projects
For each category of projects different alternatives were investigated. For the flood defense projects, after
clearly optimizing the engineering options to reduce all environmental and social impacts, three alternatives
were analyzed:
a) "Do nothing" alternative
b) 5% probability protection
c) 1% probability protection
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For each case, the benefits were determined based on the entire probability of damages, and through
integration below the curve the average annual damage (see Figure 1 for Bega Flood Defense scheme). As
can be seen, a large part of the damage is avoided if protection to the 5% probability scheme is adopted.
Figure 1. B e g a - Flood Damage Vs Probabi li ty
300 0
250 0
200 0
0
00's
150 0
age $
m 1000
Da
50 0
0
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Probabi l i ty
Do Nothing
5% Prob. Protect i on
1% Prob Prot ection
The incremental cost and benefits were determined for the 5% and 1% schemes and are shown below in
Figure 2 and Table 1. It indicates that it the 1% probability protection is the preferable option since most
of the damages are avoided and the costs are much lower than the 1% probability case.
Dam Safety Projects For dam safety projects four alternatives were considered
a) "Do nothing" alternative
b) One-stage rehabilitation
c) Two-stage alternative
d) Complete replacement of the dam
Analysis of the four alternatives indicate that the one stage rehabilitation is the most economic. Typical
example of the analysis is for the Berdu dam rehabilitation, in which case the best alternative is the one
stage rehabilitation although the economic rates of return are slightly lower and costs are slightly higher
than the two-stage approach. It is clear that the "do nothing" option produces significant negative benefits
and the "complete replacement" of the dam is too expensive. On the other hand, the one-stage and
two-stage rehabilitation are both very feasible but from the practical point of view, completion of the
one-stage rehabilitation can be assured, while the there is no guarantee that investment of the second stage
rehabilitation will be realized. Hence, the choice between the one-stage or two stage investment is based on
a very practical consideration. Based on conclusion, the one stage rehabilitation has been selected (see
Figure 3 for benefits/costs and IRR for the alternatives).
- 80 -

---

Figure 2. Bega Flood Control Scheme
Bega Flood Control Scheme
8 0 0 0
6 2 1 3
5 0 9 2
6 0 0 0
40 2 2
4 0 0 0
2 5 4 6
2 0 0 0
0
0
-2 0 0 0
-4 0 0 0
$000's in Benefits/costs
- 63 7 4
-6 0 0 0
-8 0 0 0
Do Nothing
5% prob . P rotect ion
1% prob. Protectio n
Damag e Av oided
Cos ts
Table1. Incremental Damage Avoided and Cost
Damage
Options

Damage Avoided Costs
B/c
Do Nothing

6374
-6374
0

5% prob.
Protection

1282
5092
2546
2.00
1% prob.
Protection

161
6213
4022
1.54

Fig ure 3 B e rdu D a m S afety Alternatives
8
2 4 . 0 0 %
6
2 2 %
2 2 . 0 0 %
2 1 %
4
2 0 . 0 0 %
2
1 8 . 0 0 %
0
million
1
2
3
4
$
1 6 . 0 0 %
IRR in %
-2
1 4 . 0 0 %
-4
1 3 %
1 2 . 0 0 %
-6
-8
1 0 . 0 0 %
A l t e r n a ti ve s
C o s t s
B ene fits
IRR
- 81 -

---

Economic Benefits
The main economic benefits for the flood defense project are the reduction of flood hazards and
vulnerability to flood damage. In case of dam safety projects, the main benefit is a significant reduction of
risk of serious damages, if there is a dam break. In addition, a rehabilitated dam provides water supply to
cities, hydropower, irrigation water, and also protection from floods. Economic benefits come not only
from reduction of direct asset loss, but also from indirect loss of economic activity for several months, loss
of market which could be permanent, loss of life, etc. Direct losses are in private assets (housing,
commercial centers, etc.), and public assets (roads, bridges, etc.). The indirect losses have been estimated
at 50% of the direct losses.
Social Benefits
Table 2 shows that estimated 453,364 people will benefit from this project. The Social Assessment
conducted during project preparation indicates that out of this number, 124,000 people in the flood defense
areas can be classified as poor. This group will benefit significantly since it will be protected from frequent
floods and loss of property, and economic and social activity. The flood protection for these people
represent about 90% of the most vulnerable groups of people in Romania.
- 82 -

---

Table 2. Population Benefiting from the Project
Number of
inhabitants
Project Name
County
Project type
benefitting
Dridu Storage
Ialomita
large dam
10435
Varsolt Dam
Salaj
large dam
107670
Berdu Dam
Maramures
large dam
137976
Poiana Uzului
Bacau
large dam
30000
Lesu Dam
Bihor
large dam
28
Siriu Storage
Lake
Buzau
large dam
3320
Maneciu Dam
Prahova
large dam
3320
Mihaileni
Hunedoara
large dam
29276
Taria
Caras Severin
small dam
5212
Sanmihailul
Roman
Timis
Assurance
1063
Catamarasti
Botosani
small dam
950
Tarna Mare
Satu Mare
flood protection
500
Mihoiesti
Alba
flood protection
116750
Cetatea De Balta
Alba
flood protection
380
River Bega
Balint-Bethausen
Timis
flood protection
300
River Cibin
Sibiu
flood protection
414
Vedea
Teleorman, Olt, Arges
flood protection
3200
Prut Petresti
Iasi
flood protection
2300
Bentu
Ialomita
flood protection
70
Bordusani
Ialomita
flood protection
50
Facaieni
Ialomita
flood protection
150

Total

453364

IRR and Benefit/Cost Analysis
Benefits estimates. Detailed economic analysis was performed on 16 sub-projects where detailed data was
available. The incremental direct benefits for flood defense projects were estimated as the flood damage
avoided (as indicated in Figures 1 and 2). The flood damage curves were determined by detailed surveys in
the field as required by the Romanian codes. Indirect benefits were estimated as 50% of the direct benefits.
Indirect benefits are mainly losses due to loss of economic activity. (E.g., in Britain these are generally
estimated at 30% because the flood periods are much shorter (1 month) however in Romania floods occur
several times in the year (2-3 times) and the flood periods can be as long as 3-4 months in the year and
economic losses are much higher.)
Economic Costs The incremental economic costs of the project were derived from the financial costs by
adjusting for taxes, credits, and interest during construction, and shadow-pricing foreign exchange at ROL
33,524 = US$1. These costs include the environmental costs and other costs such as land acquisition.
IRR and Benefit/Cost Analysis
- 83 -

---

Table 3 indicates that for the base case the IRR and B/C the sub-projects chosen represent good economic
returns.
Table 3. IRR and B/C Ratios by Projects
B/C
Large and Small Dams
IRR
Ratio
Dridu Dam
30%
2.9
Vaslot Dam
22%
2.3
Berdu
40%
4.4
Poiana Dam
33%
3.8
Maneciu
33%
3.8
Taria
25%
3.0
Sanmhai
16%
1.5
Catamarasti
31%
2.6
Flood Defense


Teleorman Colonesti
21.1%
1.4
Teleorman-Tiganesti
13.2%
1.1
Teleorman-Tartaresti
20.9%
1.4
Teleorman Orbescea
17.7%
1.2
Bega
27.0%
1.6
Cetrata de Blta--Tarnava Mica river 29.4%
1.6
Cibin dwnstr. Gura Raului
17.7%
1.2
Tarna
22.3%
1.5
Prut river bed restoration
42.3%
2.1

Average IRR and B/C Ratio
26%
2.20

Based on the costs and benefits economic analysis, the IRR and B/C ratios were calculated. For the base
case, the IRR and B/C ratios show very strong returns for most projects. The Dam Safety projects show a
much stronger IRR and B/C ratios, generally over 20% and B/C ratios well above 2. Most of the benefits
for the dam safety projects come from the damage avoided from dam failure. Many of the unsafe dams in
Romania are in a poor condition, with leaking foundations or embankments, poor gates and water release
structures. In many cases, the Apele Romane has indicated that the structures can fail any day. The flood
defense projects also indicate fairly strong IRR for most of the projects. However, there is one flood
defense project which is marginal.
Risks and Sensitivity Analysis
The major economic risks associated with the project are related to: (a) cost overruns; and (b)
over-estimation of flood damage. Other risks relate to delays in construction and therefore, delays in the
benefits and construction quality risks. Construction quality risks are within reasonable limits and would
be manageable with continuous supervision by Apele Romane and their consultants, and the panels who are
retained for the construction phase. The possible cost overruns and overestimation of flood damage
functions were assessed to determine the viability of the project. The results are presented in Table 4 and
- 84 -

---

Figure 4.
Figure 4 Dam Safety Projects
45%
40%
35%
30%
25%
20%
IRR % 15%
10%
5%
0%
Berdu
ciu
Taria
Mane
Sanmhai
Dridu Dam
Vaslot Dam
Poiana Dam
Catamarasti
Base
Benefit s -2 0 %
Costs +20%
Benefit s -2 0 % & Co st +2 0 %
OCR
- 85 -

---

Table 4 : IRR Estimates for Sensitivity of Cost Overruns or Benefit Declines and Cost Overruns
Cross
Over
Cross
Benefits -
Cost
Over
Benefits Costs
20% & Cost IRR=
Benefits
Large and Small Dams
Base
-20%
+20% +20%
12%
IRR= 12%
Dridu Dam
30%
22%
25%
20%
175%
-60%
Vaslot Dam
22%
18%
19%
16%
120%
-55%
Berdu
40%
32%
33%
27%
>200%
-75%
Poiana Dam
33%
26%
28%
23%
>200%
-62%
Maneciu
33%
27%
28%
23%
>200%
-70%
Taria
25%
20%
22%
18%
180%
-55%
Sanmhai
16%
14%
14%
12%
45%
-32%
Catamarasti
31%
24%
26%
20%
150%
-57%
Average
29%
23%
24%
20%
159%
-58%
Flood defense






Teleorman Colonesti
21%
12%
15%
9%
35%
-21%
Teleorman-Tiganesti
13%
8%
9%
5%
10%
-5%
Teleorman-Tartaresti
21%
12%
15%
8%
35%
-19%
Teleorman Orbescea
18%
10%
14%
8%
34%
-15%
Bega
27%
18%
19%
13%
55%
-35%
Cetrata de Blta--Tarnava Mica river
29%
17%
21%
13%
62%
-32%
Cibin dwnstr. Gura Raului
18%
10%
13%
7%
25%
-16%
Tarna
22%
14%
17%
11%
50%
-25%
Prut river bed restoration
42%
28%
30%
21%
110%
-50%
Average
24%
14%
17%
10%
46%
-24%

For Dam Safety projects, if costs increase by 20%, the IRR drops to 24% and if benefits decline by 20%
the IRR drops by 23%. Further, if benefits decline by 20% and costs increase by 20%, the IRR drops to
20%. The Figure 4 also indicates these values in graphic form. The crossover point for cost is that costs
have to increase by 134% before the IRR declines to 12%, and for benefits these have to decline by 58%
before the IRR declines to 12%. Therefore. the set of projects can be considered as economically robust.
The Flood Defense projects are also robust except for one sub-project. Decline in benefits of 20% results in
IRR declining to 14% from 26%, and a cost overrun of 20% causes the IRR to decline to 17%. However, a
20% decline in benefits and 20% increase of costs would cause the IRR to decline to 10%. One project,
Teleorman-Tiganesti in particular fares poorly. On the other hand, it should be noted that all the flood
defense projects benefit very poor people in rural areas, and for the social reasons, it would be advisable to
support these investments.
Delays in construction (which would not affect costs) of one year implies that all benefits would be delayed
by one year. This would be an intermediate case of the 20% decline in benefits or a 20% cost increase or a
combination of both, therefore, this case was not analyzed. (?)
In addition to further verifying the robustness of these projects (using "@Risk", an add-on to Excel), the
costs and benefits were estimated as distributions and the IRR and B/C ratios were estimated. A typical
analysis for a Dam Safety project and a Flood Defense project are shown below. For all the dam safety
projects, despite the variations in benefits and costs, the 95% confidence belt for IRR do not go below 12%.
- 86 -

---

Overall, the presented analysis shows that the projects are economically viable and very robust.
- 87 -

---

Annex 5: Financial Summary
ROMANIA: HAZARD RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT
Implementation Period
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Total Financing Required
Project Costs
Investment Costs
710
19,867
46,955
53,930
51,400
26,806
Recurrent Costs
268
797
901
865
610
548
Total Project Costs
978
20,664
47,856
54,795
52,010
27,354
Fron-end Fee
1,500
0
0
0
0
0
Total Financing
2,478
20,664
47,856
54,795
52,010
27,354
Financing
IBRD
1
12
35
42
40
21
Government
1,961
18,602
46,312
53,363
50,633
27,333
Central
1,961
18,602
46,312
53,363
50,633
27,333
Local
0
0
0
0
0
0
GEF
516
2,050
1,509
1,390
1,337
0
Co-financiers
0
0
0
0
0
0
User Fees / Beneficiaries
0
0
0
0
0
0
Total Project Financing
2,478
20,664
47,856
54,795
52,010
27,354
- 88 -

---

Operational Period
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Total Financing Required
Project Costs
Investment Costs
710
19,867
46,955
53,930
51,400
26,806
Recurrent Costs
268
797
901
865
610
548
Total Project Costs
978
20,664
47,856
54,795
52,010
27,354
Fron-end Fee
1,500
0
0
0
0
0
Total Financing
2,478
20,664
47,856
54,795
52,010
27,354
Financing
IBRD
0
0
0
0
0
0
Government
1,962
18,614
46,347
53,405
50,673
27,354
Central
1,962
18,614
46,347
53,405
50,673
27,354
Local
0
0
0
0
0
0
GEF
516
2,050
1,509
1,390
1,337
0
Co-financiers
0
0
0
0
0
0
User Fees / Beneficiaries
0
0
0
0
0
0
Total Project Financing
2,478
20,664
47,856
54,795
52,010
27,354
- 89 -

---

Annex 6(A): Procurement Arrangements
ROMANIA: HAZARD RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT
Procurement
Procurement of goods, technical services and works would be done in accordance with World Bank
Guidelines: Procurement under the IBRD Loans and IDA Credits (issued in January 1995, revised
January and August 1996, September 1997, January 1999, May 2004). Consulting Services, technical
assistance and training would be procured in accordance with the Guidelines - Selection and Employment
of Consultants by World Bank Borrowers, January 1997, revised September 1997, January 1999, May
2002, and May 2004. The Bank's Standard Bidding Documents, Request for Proposals and Forms of
Consultants' Contract would be used. A General Procurement Notice (GPN) would be published in the
U.N. Development Business in April 2004.
1. Procurement Responsibilities
1.1 Project Management
The project components will be implemented by the following four agencies:
·
Ministry of Administration and Interior (MAI), would be responsible for component A;
·
Ministry of Transport, Construction and Tourism (MTCT), will be responsible for component B;
·
Ministry of Environment and Water Management (MEWM), responsible for component C; and
·
National Agency for Mineral Resources (NAMR), responsible for component D.
For implementation of components A, B, and D, Project Management Units (PMU) will be established in
the respective ministries, which will be responsible for project implementation, monitoring, financial
management, as well as procurement. Component C will be implemented by MEWM through its agency,
the National Administration "Romanian Water" ("Apele Romane") acting as implementing agency.
Each PMU will open a Special Account in a commercial bank under conditions satisfactory to the Bank,
and will be responsible for maintenance of the financial management system for each of the components.
For Component C, this responsibilities will be carried out by MEWM, through its Water Department.
In addition, in order to allow for consistent supervision, monitoring and reporting on the project as a whole,
it was agreed with the Romanian Government that consolidation of project implementation reports
(including financial reports) will be carried out by the PMU located in MTCT.
In particular, the implementing units will have the following responsibilities:
·
implementation of the respective project components;
·
monitoring, including compliance with the relevant bank policies, and evaluation;
·
financial management for the given project component;
·
developments of Terms of Reference for the activities under their jurisdiction;
·
preparation of bidding documents and contracts for works, goods and consultancy services;
·
evaluation of bids;
·
signing of the contracts;
·
monitoring and management of contracts
·
certification and/or commissioning of delivered products;
- 90 -

---

·
making payments to the contractors from the respective Special Account.
The PMUs will be staffed with a Procurement Specialist, Financial Manager, Accountant, and other
qualified consultants as required in each of the units. The implementing agencies will also assign
procurement and financial staff with adequate experience, qualifications and proficiency in English
language to manage large ICB contracts.
The core MTCT/ PMU staff comprising the PMU director, procurement specialist and FMS will be
employed by the end of April 2004, through the Global Environment Facility (PDF-B GEF) grant proceeds,
for the preparation of the HRMEP project.
The MTCT/ PMU procurement specialist's contract will be renewed for the loan implementation period if
he/she proves adequate performance during the preparation stage. In addition to this one procurement
assistant will be recruited before loan effectiveness on a competitive basis pursuant to issue of EOIs in the
local press. Furthermore, the MTCT/ PMU will be temporarily assisted by international individual
consultants in contract management and supervision when and as needed. The minimum TOR
requirements will be " to be familiar and experienced with World Bank procurement procedures, and
procurement under internationally financed projects".
The PMU in the Ministry of Administration and Interior (MAI), responsible for the component A ,will
employ a PMU Director, a procurement specialist and financial management specialist on a competitive
basis pursuant to issuance of EOIs in the local press by loan effectiveness. The Ministry of Environment
and Water Management (MEWM), responsible for the component C, will implement the project through its
affiliated agency "Apele Romane". To support the staff assigned fort this project at "Apele Romane" the
Ministry will employ a procurement specialist experienced in World Bank procurement procedures on a
competitive basis pursuant to issue of EOIs in the local press by the loan effectiveness. .
Component D will be implemented by the existing PMU in the National Agency for Mineral Resources
(NAMR). This PMU is experienced in goods and consultant contracts but not in works contracts. The
other ministries are not as experienced with World Bank procurement. Procurement specialists for the three
PMUs in the line ministries will be recruited before the loan effectiveness on a competitive basis pursuant
to issuance of EOIs in the local press. All procurement specialists would be sent to a training program,
preferably to a program conducted by ILO at Turin /Italy, according to their needs for further development
of procurement knowledge and qualifications. The public servants assigned for procurement in the
implementing agencies for Component C, would also benefit of similar training programs to ensure that all
those involved in project implementation become familiar with procurement procedures and requirements
under Bank-financed projects.
The PMUs and implementing agencies will be supported by consultant firms and individuals for the
preparation of designs, bidding documents and supervision of works. All the PMU staff should be assigned
or employed before loan effectiveness.
Procurement methods (Table A)
Thresholds
The following thresholds are recommended. The aggregate amounts for each procurement method discussed
below are shown in the footnotes to Table A:
(i) Goods and Equipment: Goods and equipment costing US$100,000 and more would be procured
- 91 -

---

through ICB. Readily available off-the-shelf goods estimated to cost less than US$100,000 per contract
may be procured through shopping .In the procurement of IT hardware and software by shopping , when
soliciting bids, the firms operating in Romania registered to the Bank's Web site should be solicited in
addition to the other available firms.

(ii) Civil Works : Civil works estimated at US$ 3 million and above would each be procured through ICB,
and civil works of less than US$3 million may be procured on the basis of national competitive bidding
(NCB).
It is proposed that works contracts to cost less than US$3,000,000 be awarded through NCB considering
the experience gained by Romania in dealing with large contracts under other projects financed by the Bank
and other IFIs (e.g. Bucharest Water Supply Project, Roads Rehabilitation Project, Petroleum Sector
Rehabilitation Project, EIB financed flood infrastructure rehabilitation project , etc.), as well as provisions
of similar projects recently approved by the Bank (e.g. Rural Development Project, Forestry Sector
Development).
NCB would be acceptable subject to the conditions that Bank's sample NCB document for ECA region be
used, a point system of evaluation would not be used, domestic preference would not be applied,
international bidders would not be excluded from bidding, and the draft NCB bidding documents would be
prepared and submitted to the Bank for review and no-objection before the first two NCB tenders is issued
for each component of the Project. No bids would be rejected at the bid opening. All bids submitted on or
before the deadline for submission of bids would be opened and read out at public bid opening, Successful
bidders will be selected by post qualification procedure (an assessment made by the employer after the
evaluation of the bids to ensure that the lowest- evaluated, responsive, eligible bidder is qualified to
perform the contract in accordance with previously specified qualification requirements) whereas local and
international bidders shall demonstrate the required average annual turnover, availability of obtaining
securities and reasonable access to credit lines to meet the construction cash flow requirements for the
subject contact(s), experience in similar works, availability of technical staff, equipment capabilities and
etc. Bid evaluation criteria shall be pre-disclosed to bidders, and technical specifications shall be clearly
written. These conditions shall be discussed at the negotiations and made part of the Loan Agreement.
Based on the performance of the PMUs and the implementing agencies on the NCB contracts the Bank will
consider increasing the NCB works threshold per contact to USD 4 million after one year of
implementation pursuant to effectiveness of the Loan Agreement.
Minor works estimated to cost less than US$100,000 per contract may be procured on the basis of
shopping.. Bank's sample bidding documents and evaluation report templates would be used.
(iv) Consultant Services, TA and Training: Consultant's services would be selected in accordance with
the Bank Guidelines issued in January 1997 and revised in September 1997, January 1999, May 2002, and
May 2004 and for this project, would include Quality and Cost Based Selections (QCBS), Consultant
Qualifications (CQ), Least Cost Selection (LCS), and Individual Consultants (IC). QCBS selection over
US$200,000 would be advertised in Development Business on line version DG-market ( Gateway) and in
local media ( one newspaper of national circulation or the official gazette, or /and electronic portal of free
access) from which a short list of six firms would be drawn. For contracts estimated to cost less than
US$100,000, short lists may be based solely on national firms unless international firms expressed interest.
The contracts for preparation of designs and auditing would be procured following the LCS method.
Contracts estimated at less than US$200,000 each for technical assistance, preparation and review of
designs, legal advice, study tours, quality control, and publicity campaigns and other services agreed by
the Bank would be procured following the CQ. Individual consultants would be selected in accordance with
Part V of the Consultants Guidelines. Training for the PMU and Public staff would be conducted in
accordance with a biannual training program that the PMUand/or the implementing agencies would submit
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---

to the Bank for its agreement before implementation.
(v) Incremental Operating Costs: The Loan would finance the incremental operations costs of the PMUs.
These would be incurred in accordance to an annual budget that the PMU would prepare and submit to the
Bank for its approval before any expenditures are incurred The operating costs of the PMUs will cover the
consultants' fees (excluding Government employees), office equipment and supplies, utilities,
communication, refurbishment of the PMU offices, maintenance of equipment and vehicles, travel
expenses, accommodation, per-diems during field trips, advertising for procurement, workshops for project
launch, and project implementation, etc.
Prior Review
The following prior review requirements would be applicable:
Goods and Civil Works
(a) All ICB packages.
(b) First two NCB, Goods and Works contracts conducted in shopping procedure and technical services
contracts under each component of the Project..
Consulting Services
(c) Consulting Firms: For each contract estimated to cost $200,000 or more, all TORs, draft RFPs, short
lists, technical and financial evaluation reports, and negotiated draft contracts would be submitted to the
World Bank for its prior review.
Post Review
All contracts not subject to the Bank's prior review would be subject to ex-post review, on a selective basis.
One out of five contracts for goods, works, technical services and consulting services would be subject to
ex-post review. Supervision missions would include a procurement specialist especially in the first year,
whose main responsibility would be to conduct ex-post reviews of the procurement process and
documentation, and provide his or her findings.
- 93 -

---

Table A: Project Costs by Procurement Arrangements
(US$ million equivalent)

Procurement


Expenditure Category

ICB
NCB
Method1
N.B.F.
Other2
Total Cost
1. Works
93.24
70.28
0.90
36.82
164.42

(72.26)
(54.64)
(0.70)
(0.00)
(127.60)
2. Goods
7.14
0.00
0.87
2.00
8.01

(5.35)
(0.00)
(0.65)
(0.00)
(6.00)
3. Services
0.00
0.00
20.96
5.19
20.96

(0.00)
(0.00)
(15.76)
(0.00)
(15.76)
4. Miscellaneous
0.00
0.00
0.86
0.21
0.86

(0.00)
(0.00)
(0.64)
(0.00)
(0.64)












5. Front-end fee
0.00
0.00
0.00
0.00
0.00

(0.00)
(0.00)
(0.00)
(0.00)
(0.00)






TOTAL
100.38
70.28
23.59
44.22
194.25

(77.61)
(54.64)
(17.75)
(0.00)
(150.00)

1/
Figures in parentheses are the amounts to be financed by the Bank Loan. All costs include
contingencies.
2/
Includes civil works and goods to be procured through shopping, consulting services, services of contracted
staff of the project management office, training, technical assistance services, and incremental operating
costs related to (i) managing the project.
Section 1: Capacity of the Implementing Agencies in Procurement and Technical Assistance requirements
The PMUs would be responsible for implementing the project components A, B and D , including
procurement. Component C would be implemented by the line agency Apele Romane under the Ministry of
Environment and Water Management (MEWM) The line agency is experienced in local procedures, but has no
experience in World Bank procurement. The implementing institutions will employ a procurement specialist to
support the local staff in launching large works and consultants contracts within the scheduled program. Staff
to be assigned to the project by this implementing agency should have proficiency in English language and be
trained in World Bank procurement procedures particularly for works and services before loan effectiveness.
The PMUs would:
(i) employ at least one procurement officer, with suitable educational background and experience in
procurement and familiarity with World Bank procurement guidelines, before project effectiveness;
(ii) Around the loan effectiveness period, the MTCT/PMU would lead to hold a project launch workshop (with
the Bank) for all government officials involved in project implementation. During the project launch
workshop, adequate time would be spent on procurement training, the procurement book would be discussed
and explained, and a half-day session would be held for those responsible for procurement decision making
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under this project;
(iii) Establish a computerized monitoring system within six months of loan effectiveness;
(iv) Immediately after Board approval, the Bank staff would prepare a procurement book containing all
procurement related documents, including Standard Bidding Documents, both in hard and soft copies, and
send it to the PMUs. The contents of the procurement book would be discussed during the project launch
workshop.
Country Procurement Assessment Report or Country Procurement Strategy Paper status: Country
Procurement Assessment Report dated August 1999.
Are the bidding documents for the procurement actions of the first year ready by negotiations
Yes No X
Section 2: Training, Information and Development on Procurement
Estimated date of Project Launch Workshop June 2004
Estimated date of publication of General Procurement Notice : April 2004
Indicate if there is procurement subject to mandatory SPN in Development Business : YES
Yes X No Domestic Preference for Goods

Yes No X Domestic Preference for Works, if applicable
Retroactive financing
Yes No X Explain: No need
Advance procurement
Yes No X Explain: No need
Explain briefly the Procurement Monitoring System:
The PMUs would establish a computerized procurement monitoring system.
Co-financing:
Component D of the project would be co-financed by the proceeds of GEF Grant.
Section 3: Procurement Staffing
Indicate name of Procurement Staff or Bank's staff part of Task Team responsible for the procurement
in the Project:
Name: Ibrahim Sirer, Sr. Procurement Specialist( ECSPS)
Explain briefly the expected role of the Field Office in procurement:
Mr. Gabriel Ionita, Senior Agriculture Specialist, will manage procurement for the Field Office.
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Prior review thresholds (Table B)
Table B: Thresholds for Procurement Methods and Prior Review1
Contract Value
Contracts Subject to
Threshold
Procurement
Prior Review
Expenditure Category
(US$ thousands)
Method
(US$ millions)
1. Works
> or equal to $3 million
ICB
93.24
< $3 million
NCB
53.61
< $100,000
S
0.65
2. Goods
> or equal to $100,000
ICB
7.14
< $100,000
S
0.31
--
3. Services
> or equal to $200,000
QCBS
11.53
< $ 200.000
LCS
0.39
< $ 200.000
CQ
0.32
Total value of contracts subject to prior review:
US $ 167.19 million
Overall Procurement Risk Assessment:
High
Frequency of procurement supervision missions proposed:
One every 6 months
(includes special procurement
supervision for
post-review/audits)

_______________________________________________________________________________________________________________
1\ Thresholds generally differ by country and project. Consult "Assessment of Agency's Capacity to Implement
Procurement" and contact the Regional Procurement Adviser for guidance.
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Annex 6(B): Financial Management and Disbursement Arrangements
ROMANIA: HAZARD RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT
Financial Management
1. Summary of the Financial Management Assessment
Country Issues.
The first Country Financial Accountability Assessment (CFAA) for Romania was finalized in December
2003 and concluded that the overall fiduciary risk associated with the public financial management and
financial accountability arrangements of the Romanian government administration is considered to be
moderate, with the systems for accounting, financial reporting and internal control representing the areas
with the higher risks and budgeting, cash management and external audit and Parliamentary oversight
representing the lower risks.
The implications of the CFAA for the project are addressed by the following actions:
- A detailed review of the systems was performed for each implementing entity;
- Each implementing entity will have a distinct project-specific accounting ledger;
- Project accounting staff was nominated for each implementing entity;
- Internal control and accounting procedures manual was developed for the project;
- The format of the FMRs and financial reports agreed with all implementing entities;
- Workshop to explain the project's financial management requirements and disbursement procedures was
carried out on 3/25/2004;
- Regular training events for the project's accounting staff over the project life;
- The PMU within MTCT will be in charge with the reporting and auditing coordination;
- Project financial statements audited by an independent auditor annually.
Strengths and Weaknesses.
The significant strengths that provide a basis of reliance on the project's financial management systems
include: the experience of the already-identified accounting staff at the various implementing entities; and
the tried and tested financial management systems of these entities.
The significant weakness of the project financial management system and the way in which they will be
addressed are presented in the table below.
Significant Weaknesses
Resolution
Lack of experience in implementing
Workshop to explain the project's financial
Bank-financed projects in some of the entities
management requirements and disbursement
procedures
Lack of clarity regarding the project's financial The development of a project accounting
management requirements and disbursement
procedures manual and the conclusion of project
procedures
implementation agreements
No formally appointed project financial
Formal appointment and hiring of project financial
management staff at the PMUs in the MAI,
management staff at the PMUs in the MAI,
MTCT and MEWM
MTCT and MEWM
No project-specific accounting ledgers have
Establish project-specific accounting ledgers at
been established at the implementing entities
all implementing entities
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Implementing Entities.
The project's components will be implemented as follows:

l
Component A by a PMU to be established in the Ministry of Administration and Interior (MAI);
l
Component B by a PMU to be established in the Ministry of Transport, Construction and Tourism
(MTCT);
l
Component C by the Ministry of Environment and Water Management (MEWM) whose accountant
will manage the component's Special Account, together with the National Administration "Romanian
Waters" (Apele Romane);
l
Component D by the existing PMU in the National Agency for Mineral Resources (NAMR); and
l
Component E by all of the above implementing entities.
The PMU established in the MTCT will coordinate the project's overall financial management
arrangements, develop the project's financial procedures manual, produce the project's financial monitoring
reports, organize the project's audit, and provide ad hoc advice to the project's other implementing entities
as required.
A Loan Agreement will be signed by the World Bank (IBRD) and the Government of Romania represented
by the Ministry of Public Finance (MPF). The MPF will in turn conclude subsidiary loan agreements with
the MAI, MTCT, MEWM and NAMR. MEWM will further sign a subsidiary loan agreement
(implementation agreement) with National Administration Romanian Waters (Apele Romane). In respect
to component D, a GEF Grant Agreement will be signed by the World Bank on behalf of the GEF and the
Government of Romania represented by the MPF, who will then conclude a subsidiary grant agreement
with the NAMR.
The diagram below shows the necessary legal agreements for the implementation arrangements:
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World Bank


Loan Agreement
GEF Grant Agreement


Government (repres. by

Ministry of Public Finance)

Subsidiary Loan Agreements
Subsidiary GEF Grant Agreement






Ministry of
Ministry of

Admin. and
Transport, Constr.
Ministry of
National Agency for

Interior
and Tourism
Environment and
Mineral Resources

Water Management

Implementation Agreement



National

Administration
Romanian Waters
(Apele Romane)
Funds Flow.
Project funds will flow in respect of each of the three sources of project financing as follows:
(i)
the Bank loan, by direct payment or via four Special Accounts (SAs), one for each component (A
to D), which will be replenished with traditional methods (SOEs);
(ii)
the GEF grant, for component D only, by direct payment or via a Special Account (GEF SA)
which will be replenished with traditional methods (SOEs);
(iii)
the Government, via Treasury project accounts.
Special Accounts will be opened at commercial banks and on terms and conditions acceptable to the WB.
Foreign currency amounts will be exchanged as needed in local currency (ROL), to cover eligible
expenditures payments in local currency to suppliers, from the Special Accounts into local currency
transfer accounts that will be opened at commercial banks and on terms and conditions acceptable to the
WB. In respect to Component C, MEWM will operate a Special Account, from which foreign currency will
be converted in local currency and will advance funds to Apele Romane on a monthly basis, sufficient to
cover the following month's projected eligible expenditures. ROL funds will be transferred to a dedicated
account used for project foreign financing for Apele Romane.
Counterpart Government contributions payments will be made from separate Treasury project accounts,
being sub-accounts of the main entities' budgetary accounts, and which will be used specifically for the
Romanian contributions to the project. These contributions will be received monthly in accordance with
normal budget procedures.
Counterpart funds are provided annually in the State Budget and are not rolled over from one year to
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another. A number of Bank financed projects have experienced a reduction in the allocated counterpart
funds while others received the amounts with some delays. These generic issues have been discussed
during the ongoing FY 2004 Country Project Portfolio Review (CPPR). The proposed solution discussed
with the MPF is to adjust the relevant legislation to allow the counterpart funds to be rolled over from one
year to another.
World Bank



Ministry of Public

Finance







Ministry of
Ministry of
Ministry of
National Agency
Environment and
Admin. and
Transport, Constr.
for Mineral
Interior
Water
Resources

and Tourism
Management






National

Administration

Romanian Waters


Flow of WB loan funds
Flow of GEF funds
Flow of Government funds


Staffing.
Each implementing entity is or will be staffed as follows in terms of project financial management:
l
MAI ­ the MAI has identified a staff member to manage the Special Account. The arrangement will
be confirmed on or around March 30, 2004.
l
MTCT ­ the MTCT has identified a suitable candidate for the position of financial manager and is in
the process of concluding a contract with that person.
l
MEWM ­ the MEWM has identified a staff member to manage the Special Account. It is anticipated
that this position will be confirmed by March 31, 2004.
l
Apele Romane ­ the project's financial management will be performed by the existing financial
management and accounting staff of the Apele Romane; and
l
NAMR ­ the existing PMU in the NAMR will work together with the NAMR's accounting department
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on the project's financial management arrangements.
Many of the entities and project financial management staff lack experience in implementing Bank-financed
projects. Therefore, a workshop was carried out on March 25, 2004 to explain the project's financial
management requirements and disbursement procedures.
Accounting Policies and Procedures.
The project's accounting books and records at the various agencies will be maintained on a cash basis and
denominated in Romanian Lei (ROL) with the exception of the books and records in respect of the Special
Accounts which will be maintained in the currency of the IBRD Loan and GEF Grant.
Each implementing entity will build upon its existing accounting procedures and internal controls.
However, not all of these procedures and controls are adequately documented; contract monitoring and
invoice payment procedures need uniformly to be strengthened across all project implementing entities; and
there is uncertainty regarding certain aspects of the project's financial management requirements and
disbursement procedures. Accordingly, a project accounting procedures manual was developed and rolled
out across all project implementing entities prior to Board presentation.
2. Audit Arrangements
Internal Audit.
All implementing entities have an internal audit department. It is anticipated that these internal audit
departments will review the project's financial management arrangements. The extent of these internal
audit reviews will be confirmed prior to Board presentation. The internal audit departments in all
implementing entities will include in their annual work program the HREMP project, as part of their
entities' overall activities.
A number of internal audit reports prepared by the relevant departments of the implementing entities have
been reviewed during appraisal. The various findings reported do not have an impact on the project.
External Audit.
As of the date of this report, the Borrower is in compliance with its audit covenants of existing
Bank-financed projects, except for the Railway Rehabilitation Project (P036013), of which the FY 2002
audited financial statements that were due on November 30, 2003 have not been finalized. However, the
National Railway Company has submitted all the audit reports in draft final (not yet signed) formats and it
has been agreed that all signed audited financial statements will be submitted to the Bank by March 25,
2004.
In respect of the WB projects implemented by NAMR, the Borrower is in compliance with its audit
covenants.
The project will be audited annually both by an audit firm and on terms of reference acceptable to the
Bank. The terms of reference for the audit have been agreed at negotiations. The audit scope will include
the project's books and records as maintained by each implementing entity, all withdrawal applications, and
all Special Accounts. The audited project financial statements together with the auditor's opinion thereon
will be provided to the Bank within six months of the end of the reporting period, being the fiscal year. The
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audit contract will be financed by the Loan and be awarded to a single audit firm for the life of the project,
subject to satisfactory performance. The PMU in MTCT will coordinate the auditing and will sign the
audit contract for the entire project.
National Administration Romanian Waters (Apele Romane) financial statements will be audited annually
by an audit firm and on terms of reference acceptable to the Bank. The terms of reference for the audit
have been agreed at negotiations. The audited entity financial statements together with the auditor's opinion
thereon will be provided to the Bank within six months of the end of the reporting period, being the fiscal
year. The costs of these audits will be covered by the entity from its own sources.
In addition, the Romanian Court of Accounts (CoA), the country's supreme audit institution, will continue
to perform ad hoc external audits of the various implementing agencies, including this project.
The audit reports prepared by the CoA for FY 2002 for the MAI, MTCT, MAFWE (currently split into
MAFRD and MEWM) and NAMR were reviewed. The CoA has granted the `discharge of responsibility',
being a process of whereby the CoA confirms that a budget holder has discharged its obligations in respect
of the execution and reporting of the budget, to all the above mentioned budgetary holders (i.e. the
respective Ministers and the President of NAMR), except for MTCT. In regard of MTCT, the findings of
the CoA relate to different interpretation of pieces of Romanian legislation (in respect of privatization, etc),
cut-off procedures and a case of fraud occurring at a subordinated MTCT entity. Most of these findings
have been addressed, penalties discharged where necessary and there are only a few issues that remain to be
addressed. The management of MTCT believes that the CoA will grant discharge of responsibility by
April 2004.
The CoA performs once every 3 years audits of the various National Companies and National
Administrations. Thus, the latest CoA audit of Apele Romane (its predecessor entity ­ Romanian Waters
National Company) was done in 2001. A review of these reports indicates that most of the findings of the
CoA have been appropriately addressed.
Overall, the CoA's audit reports in respect of all of the project's implementing entities do not contain
findings that will adversely impact the project. These findings relate primarily to various and
understandable differences of interpretation of legislation applicable, have been acknowledged by the
management of the entities and have been subsequently addressed. The CoA separately confirmed that they
were not aware of any financial management issues that would adversely impact project implementation at
any of the project's implementing entities.
3. Disbursement Arrangements
Bank funds will be disbursed either as direct payments, or to one of the five Special Accounts (four for the
Loan funds and one for the GEF Grant) opened for each component which will be replenished under the
traditional disbursement procedures. Withdrawal applications for the replenishments of the SAs will be
sent to the Bank directly by each responsible project implementing entity every quarter, or when about a
third of the initial deposit in the SA has been utilized, whichever comes first. All replenishments for
transactions above the prior-review threshold will be fully documented. Supporting documentation for all
transactions, including completion reports, goods received noted and acceptance certificates, will be
retained by each implementing entity and made available to the Bank during project supervision. There is
no plan to move to forecast-based periodic disbursements.
4. Reporting and Monitoring
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---

Project management-oriented Financial Monitoring Reports (FMRs) will be used for project monitoring
and supervision. The PMU in the MTCT will produce the project's FMRs every calendar quarter and the
reports will be submitted to the Bank within 45 days after the calendar quarter-end. The FMRs will be
aggregated from the reports provided to the MTCT PMU by the implementing entities. Each implementing
entity will produce its financial reports in a spreadsheet based on data extracted from its accounting
systems and submit the reports to the PMU in MTCT within 30 days after the calendar quarter-end. Draft
formats of the FMRs and financial reports were developed, agreed prior to negotiations and included in the
project's accounting procedures manual.
5. Information Systems
Information Systems.
Each entity already has access to an accounting software system on which it will create and maintain
project-specific accounting ledgers, as follows:
l
MAI ­ a copy of the existing accounting system will be used by the PMU and a separate notional
company will be established in the MAI's in-house developed statutory accounting software system in
order that the operations of the project may be recorded and identified separately in a completely new
accounting database;
l
MTCT ­ the MTCT's existing accounting software system will be used to record the operations of the
project. A copy of the existing accounting software will be used and a separate `department' will be
established in the software and operated by the PMU on the new accounting database. The project data
will later be uploaded onto the MTCT's systems;
l
MEWM ­ a spreadsheet system to record the project financial transactions will be used whilst at the
same time recording these transactions in the MEWM's existing accounting systems;
l
Apele Romane ­ a national `branch' for the relevant part of the project implemented by Apele Romane
has been established within the Apele Romane's accounting information systems; and
l
NAMR ­ the existing accounting software will be used to record the operations of the project. The
software will use the existing chart of accounts with a coding structure that will enable the NAMR to
identify project related transactions.
6. Action Plan (Agreed with Borrower)
The financial management arrangements need to be strengthened prior to Board presentation of the project
in order to be acceptable to the Bank. The financial management action plan agreed at negotiations is
presented below.
Action
Responsible Person
Completion Date
Establish project-specific
MAI
3/30/04
accounting ledger
Deliver remaining Railway
MTCT and Railways
3/25/04
audit reports for FY 2002
Re-assess adequacy of
World Bank
3/31/04
project's financial
management arrangements
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7. Supervision Plan
During project implementation, the Bank will supervise the project's financial management arrangements in
two main ways: (i) review the project's quarterly financial monitoring reports (FMRs) as well as the
project's annual audited financial statements and auditor's management letter; and (ii) during the Bank's
supervision missions, review the project's financial management and disbursement arrangements (including
a review of a sample of withdrawal applications and movements on the Special Accounts) to ensure
compliance with the Bank's financial management requirements.
Allocation of loan/grant proceeds (Table C)
Table C: Allocation of Loan/Grant Proceeds
Expenditure Category
Amount in US$million
Financing Percentage
Works
115.76
100% foreign expenditures, 78% local
expenditures
Goods
5.52
100% foreign expenditures, 100% local
expenditures (ex factory cost), and 75%
local expenditures for other items
procured locally
Technical Services
0.20
100% foreign expenditures, , and 75%
local expenditures
Consultants' Services, including Audit and
15.77
85% of expenditures incurred by foreign
Training
consultants and 75% of expenditures
incurred by local consultants
Operating Costs
0.62
75%
Unallocated
12.13
Total Project Costs with Bank
150.00
Financing
Front-end fee
0.00
Total
150.00
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Annex 7: Project Processing Schedule
ROMANIA: HAZARD RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT
Project Schedule
Planned
Actual
Time taken to prepare the project (months)
21
27
First Bank mission (identification)
12/21/2001
12/21/2001
Appraisal mission departure
01/30/2004
01/30/2004
Negotiations
03/15/2004
03/15/2004
Planned Date of Effectiveness
07/01/2004
Prepared by:
Ministry of Administration and Interior; Civil Protection Command; Fire Corps; Ministry of Transport,
Construction and Tourism; Ministry of Agriculture, Forestry and Rural Development; Ministry of
Environment and Water Management; Apele Romane; SNIF; National Agency for Mineral Resources.
Preparation assistance:
An Austria Consultant Trust Fund for $166,750 (TF038198) and $185,100 (TF030454) were received and
used for support of the Bank work in the area flood and landslide risk reduction, as well as social and
environment assessments.
The Austria GEF CTF for $91,450 (TF030304) was received and used for support of the Bank work in
regard to priorities setting for risk reduction of mining accidents in Tisza Basin.
A Bank-Netherlands Water Partnership Program (BNWPP) TF for $61,875 (TF051001) was received in
support of activities related to the flood risk reduction component, and to provide training on Economic
Analysis of Flood Protection and Dam Safety Investments.
The BNWPP TF for $30,000 (TF050933) was received and used in support of Bank work in the area of
mining accidents risk reduction in Tisza Basin.
Bank staff who worked on the project included:
Name
Speciality
Christoph Pusch
Task Team Leader
Gabriel Ionita
Deputy Team Leader
Rita Cestti
GEF Task Manager
Daniel Gunaratnam
Flood and Landslide Risk Reduction
Eugene Gurenko
Catastrophe Insurance and Risk Financing
Eric Peterson
Urban Planning and Infrastructure
Peter Yanev
Seismic Engineering
Jolanta Kryspin-Watson
Institutional Capacity Building
Richard Andrews
Emergency Management and Disaster Mitigation
Ibrahim Sirer
Procurement
Nicholay Chistyakov
Disbursement
Irina Kichigina
Lawyer
Bogdan Constantinescu
Financial Management
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Stanley Peabody
Social Assessment
Joseph Bishop
Emergency Response
Koshie Michel
Program Assistant
- 106 -

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Annex 8: Documents in the Project File*
ROMANIA: HAZARD RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT
A. Project Implementation Plan
B. Bank Staff Assessments
"Observations on Earthquake Risk and Engineering Practices in Romania", Peter Yanev, May 2002
"Romania - Seismic Risk", Dan Lungu, June 2002
"Sector Environmental Assessment Mining Sector of Romania", September 2001
Back-to-Office Reports of Bank Missions
Project Cost Tables
"Dam Safety Assessment Report", Daniel Gunaratnam, July 2003
Procurement Capacity Assessment Report, 2003
Financial Assessment Report, 2004
C. Other
Project Social Assessment, 2003
Environmental Management Plan, 2003
Feasibility Studies for Flood Prevention Schemes
Feasibility Studies for Facilities Proposed for Retrofitting
Prioritization of Structures for Seismic Strengthening
*Including electronic files
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Annex 9: Statement of Loans and Credits
ROMANIA: HAZARD RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT
27-Oct-2003
Difference between expected
and actual
Original Amount in US$ Millions
disbursementsa
Project ID
FY
Purpose
IBRD
IDA
GEF
Cancel.
Undisb.
Orig
Frm Rev'd
P043881
2004 IRRIG REHAB
80.00
0.00
0.00
0.00
80.00
0.00
0.00
P073967
2003 RURAL EDUC
60.00
0.00
0.00
0.00
60.00
1.00
0.00
P069679
2003 PPIBL
18.60
0.00
0.00
0.00
18.56
-0.04
0.00
P068062
2003 ENERGY EFF (GEF)
0.00
0.00
10.00
0.00
10.27
3.65
0.00
P067575
2003 PSAL 2
300.00
0.00
0.00
0.00
194.02
0.00
0.00
P081406
2003 ELEC MARKET
82.00
0.00
0.00
0.00
80.71
0.00
0.00
P067367
2003 FOREST DEVT
25.00
0.00
0.00
0.00
25.00
0.40
0.00
P057960
2002 RURAL DEV (APL #1)
40.00
0.00
0.00
0.00
38.40
1.90
0.00
P068808
2002 SDF 2 (APL #2)
20.00
0.00
0.00
0.00
17.67
-2.33
1.42
P066065
2002 AG POLLUTION CONTROL (GEF)
0.00
0.00
5.15
0.00
4.64
0.92
0.00
P008783
2001 SOC SECT DEV (SSD)
50.00
0.00
0.00
0.00
49.64
27.70
0.00
P056891
2001 RURAL FIN (APL #1)
80.00
0.00
0.00
0.00
78.97
17.57
0.00
P065041
2000 TRADE & TRANS FACIL IN SE EUR
17.10
0.00
0.00
4.47
5.84
-6.79
0.00
P056337
2000 MINE CLOSURE
44.50
0.00
0.00
0.00
31.54
30.94
-4.96
P043882
2000 AGR SUPPORT SERVS
11.00
0.00
0.00
0.00
7.32
6.12
0.00
P008797
2000 HEALTH SECTOR REFORM
40.00
0.00
0.00
0.00
8.13
7.13
0.00
P039251
1999 PIBL
25.00
0.00
0.00
1.10
10.10
11.20
0.00
P058284
1999 CULTURAL HERITAGE
5.00
0.00
0.00
0.00
3.45
3.45
1.13
P044176
1999 BIODIV CONSV MGMT (GEF)
0.00
0.00
5.50
0.00
2.88
2.58
0.08
P034213
1998 GEN'L CADASTRE
25.50
0.00
0.00
0.00
17.18
17.18
9.36
P044614
1998 SCHOOLS REHABILITATION
70.00
0.00
0.00
0.00
7.06
7.06
1.06
P039250
1997 SECOND ROADS
150.00
0.00
0.00
0.00
17.61
17.61
0.00
P008794
1996 POWER SECTOR REHAB
110.00
0.00
0.00
33.50
13.13
46.63
4.70
Total:
1253.70
0.00
20.65
39.07
782.12
193.88
12.79
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ROMANIA
STATEMENT OF IFC's
Held and Disbursed Portfolio
June 30 - 2003
In Millions US Dollars
Committed
Disbursed
IFC
IFC
FY Approval
Company
Loan
Equity
Quasi
Partic
Loan
Equity
Quasi
Partic
1999
Ambro
4.13
0.00
0.00
0.00
4.13
0.00
0.00
0.00
2003
Arctic
11.48
0.00
0.00
0.00
9.18
0.00
0.00
0.00
1998/02
Banc Post
0.00
0.00
10.00
0.00
0.00
0.00
10.00
0.00
2003
Banca Comerciala
75.00
0.00
0.00
0.00
75.00
0.00
0.00
0.00
2001
Banca Romaneasca
5.26
0.00
0.00
0.00
5.26
0.00
0.00
0.00
1998
Bilstein Compa
0.88
0.00
0.00
0.88
0.88
0.00
0.00
0.88
1996
Danube Fund
0.00
1.40
0.00
0.00
0.00
1.40
0.00
0.00
2001
ICME
12.63
0.00
0.00
0.00
12.63
0.00
0.00
0.00
1998
Krupp Compa
2.71
0.00
0.00
1.16
2.71
0.00
0.00
1.16
2002/03
MFI MFB Romania
0.00
0.53
0.00
0.00
0.00
0.53
0.00
0.00
1997/98/00
Mobil Rom
1.35
0.00
0.00
1.80
1.35
0.00
0.00
1.80
1997
Rambox
0.81
0.00
2.00
0.00
0.81
0.00
2.00
0.00
1994/98/01
Romlease
3.11
0.00
0.00
0.00
3.11
0.00
0.00
0.00
Total Portfolio:
117.36
1.93
12.00
3.84
115.06
1.93
12.00
3.84
Approvals Pending Commitment
FY Approval
Company
Loan
Equity
Quasi
Partic
2003
Banca Comerciala
0.00
0.00
0.08
0.00
2003
Ro-Fin Mortgage
0.01
0.00
0.00
0.00
Total Pending Commitment:
0.01
0.00
0.08
0.00
- 109 -

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Annex 10: Country at a Glance
ROMANIA: HAZARD RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT
Europe &
Lower-
POVERTY and SOCIAL

Central
middle-
Romania
Asia
income
Development diamond*
2002
Population, mid-year (millions)
21.8
476
2,411
Life expectancy
GNI per capita (Atlas method, US$)
1,920
2,160
1,390
GNI (Atlas method, US$ billions)
41.9
1,030
3,352
Average annual growth, 1996-02
Population (%)
-0.6
0.1
1.0
Labor force (%)
0.2
0.4
1.2
GNI
Gross
per
primary
Most recent estimate (latest year available, 1996-02)
capita
enrollment
Poverty (% of population below national poverty line)
30
..
..
Urban population (% of total population)
55
63
49
Life expectancy at birth (years)
70
69
69
Infant mortality (per 1,000 live births)
18
25
30
Child malnutrition (% of children under 5)
..
..
11
Access to improved water source
Access to an improved water source (% of population)
58
91
81
Illiteracy (% of population age 15+)
2
3
13
Gross primary enrollment (% of school-age population)
99
102
111
Romania
Male
100
103
111
Lower-middle-income group
Female
98
101
110
KEY ECONOMIC RATIOS and LONG-TERM TRENDS
1982
1992
2001
2002
Economic ratios*
GDP (US$ billions)
..
28.4
39.1
42.4
Gross domestic investment/GDP
33.7
31.4
22.6
23.1
Trade
Exports of goods and services/GDP
..
27.8
33.3
35.4
Gross domestic savings/GDP
..
23.0
14.8
17.3
Gross national savings/GDP
..
22.9
17.0
19.8
Current account balance/GDP
..
-5.3
-5.7
-3.6
Domestic
Interest payments/GDP
..
0.2
1.5
1.3
Investment
savings
Total debt/GDP
..
11.5
29.5
31.4
Total debt service/exports
23.3
9.1
18.5
17.9
Present value of debt/GDP
..
11.1
28.3
30.1
Present value of debt/exports
..
61.9
79.8
76.8
Indebtedness
1982-92
1992-02
2001
2002
2002-06
(average annual growth)
Romania
GDP
-1.9
1.0
5.7
4.9
5.0
GDP per capita
-2.1
1.3
5.9
7.8
4.6
Lower-middle-income group
Exports of goods and services
..
10.3
11.1
16.9
8.8
STRUCTURE of the ECONOMY
1982
1992
2001
2002
Growth of investment and GDP (%)
(% of GDP)
30
Agriculture
19.9
19.4
14.8
13.1
Industry
55.2
44.0
37.0
38.1
15
Manufacturing
..
..
..
..
Services
24.9
36.6
48.1
48.8
0
97
98
99
00
01
02
Private consumption
53.9
62.7
78.5
76.0
-15
General government consumption
10.5
14.3
6.7
6.6
GDI
GDP
Imports of goods and services
..
36.2
41.1
41.2
1982-92
1992-02
2001
2002
Growth of exports and imports (%)
(average annual growth)
Agriculture
1.4
-1.0
25.2
-3.9
30
Industry
-2.9
0.7
7.5
7.2
20
Manufacturing
..
..
..
..
Services
..
1.2
0.4
5.6
10
0
Private consumption
0.3
4.2
6.5
3.0
97
98
99
00
01
02
General government consumption
2.6
-9.3
-0.3
2.1
-10
Gross domestic investment
..
-1.2
18.0
7.4
Exports
Imports
Imports of goods and services
..
10.0
17.2
12.1
* The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete.
- 110 -

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Romania
PRICES and GOVERNMENT FINANCE
1982
1992
2001
2002
Inflation (%)
Domestic prices
(% change)
200
Consumer prices
..
210.9
34.5
22.5
150
Implicit GDP deflator
12.1
199.9
37.3
23.6
100
Government finance
50
(% of GDP, includes current grants)
0
Current revenue
..
36.7
30.1
29.6
97
98
99
00
01
02
Current budget balance
..
-0.1
0.0
0.7
GDP deflator
CPI
Overall surplus/deficit
..
-5.3
-3.2
-2.5
TRADE
1982
1992
2001
2002
Export and import levels (US$ mill.)
(US$ millions)
Total exports (fob)
..
4,363
11,385
13,876
20,000
Textiles
..
735
1,516
1,782
Metals
..
572
784
1,181
15,000
Manufactures
..
2,613
8,122
9,851
Total imports (cif)
..
6,260
15,552
17,862
10,000
Food
..
996
1,207
1,174
5,000
Fuel and energy
..
2,028
2,237
2,272
Capital goods
..
1,208
4,326
5,111
0
96
97
98
99
00
01
02
Export price index (1995=100)
..
..
96
97
Import price index (1995=100)
..
..
88
88
Exports
Imports
Terms of trade (1995=100)
..
..
110
111
BALANCE of PAYMENTS
1982
1992
2001
2002
Current account balance to GDP (%)
(US$ millions)
Exports of goods and services
12,384
5,023
13,418
16,223
0
Imports of goods and services
10,493
6,504
16,502
18,825
96
97
98
99
00
01
02
Resource balance
1,891
-1,481
-3,084
-2,602
-2
Net income
-851
-90
-282
-459
-4
Net current transfers
0
65
1,143
1,536
-6
Current account balance
1,040
-1,506
-2,223
-1,525
-8
Financing items (net)
-988
1,393
3,707
3,327
Changes in net reserves
-52
113
-1,484
-1,802
-10
Memo:
Reserves including gold (US$ millions)
..
858
4,861
7,306
Conversion rate (DEC, local/US$)
..
212.5
29,875.3
35,684.2
EXTERNAL DEBT and RESOURCE FLOWS
1982
1992
2001
2002
(US$ millions)
Composition of 2002 debt (US$ mill.)
Total debt outstanding and disbursed
10,003
3,272
11,524
13,301
IBRD
1,483
210
1,876
2,147
G: 759
IDA
0
0
0
0
A: 2,147
Total debt service
2,910
464
2,571
2,971
IBRD
162
2
204
194
C: 428
IDA
0
0
0
0
Composition of net resource flows
D: 1,313
Official grants
0
199
257
327
Official creditors
378
1,006
17
-34
E: 897
Private creditors
410
144
1,434
859
Foreign direct investment
0
73
1,174
1,128
F: 7,757
Portfolio equity
0
0
8
..
World Bank program
Commitments
197
500
150
384
A - IBRD
E - Bilateral
Disbursements
413
211
132
307
B - IDA
D - Other multilateral
F - Private
Principal repayments
73
0
101
119
C - IMF
G - Short-term
Net flows
340
211
31
188
Interest payments
89
2
103
76
Net transfers
251
209
-72
112
Development Economics
9/11/03
- 111 -

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Additional GEF Annex 11
Incremental Costs and Global Environmental Benefits
ROMANIA: HAZARD RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT
Global Environmental Objective
The global environmental objective is to demonstrate and provide for replication for the reduction of
catastrophic accidental spills of transboundary pollution loads from mine operations flowing into the
Danube and Black Sea basins. Proposed project activities are in line with the objectives of the
Programmatic Approach to the Danube and Black Sea Basin, namely, that Danube and Black Sea basin
countries: (i) adopt and implement policy, institutional and regulatory changes to reduce point and
non-point source nutrients discharges, restore nutrient sinks and prevent and remediate toxic hot spots; and
(ii) gain experience in making investments in prevention and remediation of toxic "hot spots."
Regional Context and Broad Development Goals
International Convention for the Protection and Sustainable Use of the Danube River. The 1994
Danube Strategic Action Plan under the Convention on Cooperation for the Protection and Sustainable Use
of the Danube River is concerned with transboundary water issues and includes provisions to protect the
Black Sea and Danube Delta against pollution by nutrients and hazardous substances. Until recently, most
of the attention on the Danube and Black Sea basins has been concentrated on reduction of nutrient loads to
address the problem of euthrophication in the Black Sea. The 2000 mining accidents in Baia Mare in the
Maramures region in Northern Romania within the Tisza catchment area, however, have pointed out that
additional priority should be placed to address mine-induced water pollution and mining accidents.
According to field investigations, the two reported accidents could have been avoided if adequate quality
assurance, technology and material used in the construction of the tailings dams, a proper forecasting
system linked to existing rainfall and snow pack gauge stations, a continuous monitoring system, and
proper emergency preparedness and response procedures by the mining companies and local authorities
would had been in place.
Mining sector in Romania. The Romanian mining sector has a long tradition and is important to the
country. It has a good future in terms of reserves and potential exploitation. Currently, the sector faces
difficult challenges in relation to economic, social and environmental requirements. Total direct
employment in the mining industry is about 10%, and is higher than in any other European Union country.
Long-term impacts on the environment and human health have occurred as a result of diffuse pollution
from sites subject to mining activities over centuries. The Government has launched a restructuring of its
mining industry, and efforts are underway to close uneconomic mines. This undertaking is supported by
the FY99 Mine Closure and Social Mitigation Project (MCSMP). Privatization is also part of the
restructuring of the sector, which poses additional challenges related to environmental liabilities from past
mining operations.
The Government is committed to improve the environmental performance of the mining sector, and has
recently completed a comprehensive Mining Sector Environmental Assessment (MSEA), which provides a
baseline evaluation of the mines throughout the country. The MSEA identifies the main environmental
issues arising from ongoing mining activities, as well as priority areas for future environmental
remediation/mitigation efforts. The MSEA has identified that a large number of operating mining sites
- 112 -

---

require urgent environmental rehabilitation of their tailings dams and waste storage facilities to avoid
catastrophic and continued releases of highly persistent toxins, thus reducing the risk of mining accidents
with long-term environmental consequences.
Accidental pollution threats. According to available information, there are 264 facilities constructed to
store mine tailings throughout the country, out of which about 40 pose a severe threat to the surrounding
human population and the environment. A recent inventory in the Tisza Basin has identified 17 tailings
dams and waste dumps facilities as potential risk spots. Romania has a large number of abandoned tailings
storage facilities and mine waste rock dumps, which are also sources of contamination. As proven by the
two accidents in northwestern Romania in 2000, the failure of tailings storage facilities can have serious
and devastating consequences.
(a)
Aurul S.A. Mine Accident. A spill of about 100,000 cubic meters of wastewater,
containing about 40 tons of cyanide and other heavy metals (lead, cadmium, copper,
manganese, zinc and arsenic), took place on January 30, 2000, at the Aurul S.A., an
Australian-owned gold and silver producing mine located in Baia Mare in the Maramures
region in northern Romania. The spill was caused by a combination of a break of the
Aurul dam as a result of the heavy rains and the melting snow, and design defects in the
facility. The polluted wastewater traveled into the Somes River, the Tisza River in
Hungary and Serbia and Montenegro, and the Danube River before entering into the Black
Sea about four weeks later. The initial cyanide concentration was reported to be between
325 and 700 times permissible levels. This incident resulted in severe deleterious impacts
on the aquatic life of the Tisza River, 1,200 tons of fish were reported dead, and threatened
people's health and livelihoods as well as drinking water sources for about 2 million
inhabitants. The total quantifiable damages were estimated at about US$3.5 million.
(b)
Baia Borsa Mine Accident. A second mining waste spill in the Maramures region of
Romania took place five weeks after the earlier accident at the Baia Borsa Preparation
Enterprise mining company. A section of the dam built with sediments from the mine failed
on March 10, 2000, as a result of the heavy rainfall and melting snow from the slopes
surrounding the mine. As a result of this incident, approximately 20,000 tons of mineral
waste containing minerals and heavy metals (lead, copper and zinc) were discharged into
the Viseu River, the Vasar River and Tisza River
Uncontrolled discharge of polluted waters. The Environmental Assessment of the Mine Sector
(conducted recently by the Government of Romania) points out that the continuous release of toxic
substances from mine operations is caused by the poor management, operation and maintenance of tailings
dams facilities, including monitoring, operational control and risk/environmental awareness of the water
management systems and the retaining dam structures. This is also the reason for the high level risk of
failure at tailings dams facilities. Field surveys have also revealed that a large amount of the contaminated
water is actually seeping through the dam body or escaping from dilapidated pipes. Risk mitigation
measures, which are the core of the GEF-supported component, will indeed cause a drastic reduction in the
amount of continuous discharge in addition to a reduction in the number of catastrophic and massive
emission of contaminants, which as we all know have serious negative effects downstream.
Transboundary impacts of mining accidental spills. Mining accidental spills in one country can have
huge transboundary impacts in other riparian countries of the Danube River and Black Sea basins.
Communities and ecosystems located far away from the mining region where the accidents take place are at
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risk of pollution exposure. The above-mentioned mining accidents have increased public awareness of the
environmental and safety hazards of the mining industry and have shown that risk assessment and
prevention of tailings dams accidents have to improve. The long-term protection of Danube and Black
Sea's water quality thus calls for addressing ongoing degradation of mine tailings dams and continuous
erosion of contaminants into surface waters of the area.
Bank Strategy. The World Bank strategy is to support the riparian countries of the Danube River and
Black Sea to reduce pollution, protect fragile ecosystems, and improve environmental management.
Consistent with this approach, the Country Assistance Strategy for Romania includes activities for helping
Romania increase the focus on reducing pollution from non-point sources as well as mining accidental
spills and move towards compliance with EU environmental directives as well as international conventions
and protocols in a cost-effective and efficient manner.
Project Development Objective. The development objective of the proposed project component is to
complement Romania's efforts to reduce the risk of water and soil contamination and loss of human and
aquatic life from catastrophic mining accidental spills of pollutants by: (i) identifying and piloting
cost-effective, efficient and innovative methods for tailings facilities management, which include
environmental and safety criteria and could be replicated throughout Romania and the Danube Basin; (ii)
improving capacity at both the national and local levels to conduct risk assessment and identify risk-based
priority actions; (iii) establishing comprehensive management guidelines to improve the performance of
tailings management facilities by Romanian companies; (iv) strengthening capacity and capability to
develop a long-term tailings dams risk/hazard mitigation strategy, which can be established for the whole
country; (v) strengthening environmental monitoring program, including establishment of credible baseline
and measures to assess performance of the mining industry; (vi) establishing a regional emergency
preparedness and response system linked to the Danube Accident and Emergency Warning system; and
(vii) furthering and promoting regional collaboration on integrated water resources management.
Baseline Scenario
The international waters of the Black Sea and Danube River are subject to a number of pressures from
human activities. Risks involved in mining activities, particularly those located in the Upper Tisza Basin,
are threatening the ecological sustainability and integrity of these transboundary ecosystems.
In the absence of GEF assistance for addressing long-term protection of international waters, Romania
would continue to support the restructuring of the mining sector, given particular attention to mitigation of
social impacts resulting from mine closure programs. Although attention for environmental rehabilitation of
(closed) mines is expected, existing government resources and international financing support will not be
sufficient to address environmental issues associated with tailings facilities of active mines. While the
Romanian government remains prepared to launch a country-wide program on tailings dams safety, serious
short-term financial constraints may preclude such ambitious undertaking. Without international assistance,
Romania is unlikely to guarantee in the short-term adequate protection of the Danube River and Black Sea.
Romania is undertaking a number of domestically and externally funded programs and activities to reduce
the risk of mining accidents in the Tisza Basin. The Baseline Scenario consists of the following
investments during the project life:
·
Environmental rehabilitation of the mining sector. The Government has allocated US$800,000 in
the 2003 budget to address issues related to tailings dams facilities associated with the closure of
mines. Approximately US$150.7 million are being planned for the period 2004-10 for investments
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---

on environmental rehabilitation of mines that will be closed and privatized, including improving the
safety and management of tailings facilities. About US$7.6 million (5%) would relate to
GEF-project objective and GEF-project area.
·
Prevention of accidental pollution. Norway and Finland governments are providing financial
support for establishing a remediation plan and a prevention/response plan for accidental pollution
in the Somes Basin and Barcau Basin, respectively. Total contribution amounts to US$100,000
over the life of the project.
·
Emergency preparedness. Component A of the project will focus on strengthening and upgrading
the national emergency response capacity. One could estimate that about US$200,000 would relate
to GEF-project objective and GEF-project area.
·
Flood forecasting system. Approximately US$46 million will be invested to establish a flood
forecasting system for Romania (DESWAT). The new flood forecasting system will complement
the US$55 million National Integrated Meteorological System (SIMIN), which implementation
started in 20002. Both systems will help alert the population and authorities in case of potential
floods. Real-time hydro-meteorological data will improve forecasting capabilities of severe
hydrological events and will reduce the risk of mining accidents. One could estimate that about
US$2.3 million (5%) would relate to GEF-project objective and GEF-project area.
·
Water management plan and monitoring equipment. A project supported by EU PHARE aims at
piloting the implementation of the EU Water Framework Directive in the Somes River basin. The
project will include the procurement of monitoring equipment. About US$1.5 million relates to
GEF-project objective.
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GEF Alternative
With GEF assistance for addressing international waters objectives, the Government of Romania would be
able to undertake a comprehensive program for improving the safety and management of tailings facilities,
which would generate both local and global benefits. The GEF Alternative would include the baseline
scenario augmented with activities at the Tisza Basin to address priority mining accidental spill risks. The
GEF Alternative will: (i) enable the development of a more integrated knowledge base about transboundary
impacts of mine-induced pollution in the Danube and Black Sea basins; (ii) provide capacity building to
increase the opportunity for adoption of best mine waste management practices throughout the Tisza and
Danube basins; (iii) pilot techniques for hazard prevention and remediation for improving the management
and safety of tailings dams and waste dumps facilities; (iv) provide for lessons learned that could be
replicated in other parts of the Tisza and Danube basins (v) leverage support from the mine operators to
replicate measures to manage the risks associated with tailings dams and waste dumps facilities; and (vi)
foster transboundary cooperation on integrated water resources management in the Tisza Basin.
The total cost of the GEF Alternative is estimated at US$30.23 and will catalyze additional resources
beyond the baseline scenario, totaling US$18.53 million, including the GEF contribution of US$7.35
million (US$0.35 million preparatory grant and US$7.0 full grant) and an additional US$11.18 million
from other sources. There is commitment from the Government of Romania to allocate funds from the
FY05 Second Mine Closure and Social Mitigation Project, which preparation is scheduled to start shortly,
for further replication of the GEF activities throughout Romania.
Incremental Cost
The difference in cost between the Baseline Scenario and the proposed GEF Alternative is estimated at
US$18.53 million. Of this amount, it is expected that US$3.84 million would be contributions from the
GoR, US$5.64 million from a IBRD loan, US$0.26 million from the Austrian Government, US$1.01
million from USTDA and US$0.44 from NAMR and mine operators. An incremental cost of US$7.35
million will be incurred to achieve global benefits through the improved management and safety of tailings
dams and waste dumps facilities. This amount would be eligible for GEF support, US$0.35 million from a
PDF-B preparatory grant and US$7.0 million from the full GEF grant. The table below summaries the
project components and proposed financial plan of the incremental cost.
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Incremental Cost Matrix
Cost
Activity
US$ Million
Domestic Benefits
Global Benefits
Category
Establishing a
Baseline
3.80
Improved flood forecasting

baseline and an
and flood dissemination
environmental
capabilities.
monitoring

system
Improved local capacity of
national monitoring
institutions, which will result
in improved monitoring and
assessment capacity.
With GEF
4.81
Same as above.
Integrated knowledge base about
Alternative

transboundary impacts of mine-

induced pollution in the Danube
and Black Sea basin and
improved understanding of
mining accidental spills impacts.
Increment
1.01


Piloting and
Baseline
7.60
Some improvements in the

replicating

management and safety of
hazard
tailings facilities.
prevention and

remediation
Limited reduction on the risk
interventions
of local water and soil
contamination and loss of
human and aquatic life
downstream project sites.

With GEF
21.80
Significant risk reduction of
Accelerate significant risk
Alternative

local water and soil
reduction of degradation of the
contamination and loss of
Black Sea and Danube River
human and aquatic life from
through identification and
catastrophic mining
implementation of an effective
accidental spills of
remediation and prevention
pollutants.
program in the Tisza basin.


Improved environment for
Establishment of a model for
local communities.
replication for reducing mining

accident risks to human and
Enhanced knowledge of
aquatic ecosystem health
tailings dams hazard
throughout other parts of the
mitigation by strengthening
Tisza and Danube basins.
local capacity through

specific training and
In the long-term, reduced
information dissemination
pollution into the Danube River
and access.
and Black Sea basins --improved
water quality from reduced toxic
and dangerous waste and
protection of sensitive aquatic
ecosystems.

Increment
14.20



- 117 -

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Incremental Cost Matrix (Continuation)
Activity
Cost
US$ Million
Domestic Benefits
Global Benefits
Category
Developing
Baseline
0.00


environmental
With GEF
0.22
Strengthened institutional
Accelerate adoption of best
and engineering Alternative

and human capacity in
tailings dams and mine waste
guidelines for
Romania for proper
management practices throughout
tailings and
management of tailings
the Tisza and Danube basins.
waste facilities
dams and waste dumps

facilities.
Increment
0.22


Developing a
Baseline
0.30
Limited improvements in the
regional mine
level of preparation and
spill emergency
protection of a few
response plan
communities within the
Tisza catchment area.


With GEF
1.72
Significant improvements in
Increased regional capacity for
Alternative
the level of preparation and
mine accidental spills prevention.
protection of communities

within the Tisza catchment
Increased collaboration among the
area.
Tisza basin riparian countries.

Increased technical level of
mine operators and local
authorities to develop and
maintain emergency
response plans.
Increment
1.42


Promoting
Baseline
0.00


transbounday
With GEF
0.37
Improved local awareness of Improved regional cooperation
cooperation on
Alternative
integrated water resources
among the riparian countries and
integrated water
management.
increased awareness for
resources
sustainable management and
management for
development of the Tisza River.
the Tisza basin
Increment
0.37


Monitoring and
Baseline
0.00


evaluation and
With GEF
1.31
Improved local project
Identification and dissemination
project
Alternative
implementation capacity
of lessons from project
management
implementation relevant for
projects elsewhere in the Danube
and Black Sea basins.
Increment
1.31


Totals
Baseline
11.70


With GEF
30.23


Alternative
Increment
18.53


(GEF)
(7.35)*

Note: * US$0.35 million from the PDF-B preparatory grant and US$7.0 million from the full GEF grant.
- 118 -

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Additional GEF Annex 12: STAP Review
ROMANIA: HAZARD RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT
STAP Review of the GEF Project Component (Component D)
Risk Reduction of Mining Accidents in the Tisza Basin
Professor Brian Wilkinson
BScEng BScGeol PhD FICE FIWEM FGS CEng CGeol
Independent Consultant
4 Lacon Court Childe Rd
Cleobury Mortimer
Shropshire
UK DY14 8PB
4th December 2003
1. Introduction
On behalf of the World Bank-GEF I have undertaken a scientific and technical review of the Appraisal
Document - Romania - Hazards Risk Mitigation & Emergency Preparedness Project - Sub-component D -
Risk Reduction of Mining Accidents in Tisza Basin. As the mining waste Component is closely linked to
other Components in the project it was necessary to study all the documentation. I based my review on the
material provided by World Bank. Previous studies are referred to in the Project Document and these would
have provided useful background information but were not made available to me. In any event the timescale
for the review was very limited.
In the following review I have, for completeness, given a brief overview of the proposal as I see it and then
discussed Component D's five sub-components, the Project Management Component E, Annex 4, Finance
and Timelines. Comments/recommendations in the body of the text are shown in bold and these are more
concisely presented in the Conclusions and Recommendations [final section].
2. Overview
The Project Component D - Risk Reduction of Mining accidents in the Tisza Basin encompasses issues of
environmental pollution from mining activities that apply not only to Romania and neighbouring riparian
[Danube] countries but also globally. The outcomes from this Project Component should therefore have
widespread international relevance.
The work to be undertaken by the Romanian authorities [involving others as necessary] to reduce the risk
of soil, rock and water contamination and potential loss of human and other life following a major spill of
mining pollutants is clearly outlined in the proposal. The Component forms a small but important part of a
much larger project covering Hazard Risk Mitigation and Emergency Preparedness for earthquakes, floods,
landslips etc. The mining waste Component is fully compatible with these other activities and there should
be, and is, some commonality between the monitoring, warning and emergency procedures that will be
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established.
A number of serious pollution incidents involving the collapse of mine tailings dams have occurred in
Romania in recent years and surveys in the region have identified many other such dams potentially
unstable in the short term. Mining waste spoil heaps and abandoned mines also present immediate and
longer term problems. Large volumes of polluted water are presently subject to uncontrolled discharge.
Baseline conditions have not been established fully so the extent of existing, and potential for future,
pollution almost certainly exceeds current estimates. The pollution is not restricted to Romania.
The Tisza river, which receives much of the contaminated water from mining activities, passes across
several international boundaries and is a principal tributary of the Danube. To protect this freshwater
ecosystem trans-boundary co-operation is needed. Further Romania, as a candidate for European Union
membership, is moving towards the implementation of EU Directives. The EU Water Framework Directive
is particularly relevant with its stress on Integrated River Basin Management in terms of water quantity,
quality and ecosystems. An interchange in relation to the management of the Tisza basin between Romania,
Ukraine, Slovenia, Hungary, Serbia and Montenegro has just started. This is very welcome, essential to the
success of the GEF project, and should be advanced with vigour.
There is an urgent need to address these problems but due to economic constraints in the past investment in
environmental protection or remediation has been minimal. The Romanian government is restructuring its
mining industry. This will involve closure of uneconomic mines, privatisation and addressing the legacy of
pollution from mining activities. Appropriate legislative measures appear to be in place to deal with the
pollution problems arising from the mining sector but costs of remedial measures are high, understanding
of the environmental issues lacking and there is little operational experience in remediation or emergency
management. Nevertheless the government has modified its Dam Safety Legislation to address tailings
storage facilities, drafted a mine closure procedure manual and prepared some environmental action plans.
Several other countries and donor agencies have supported the development of monitoring and information
systems but the potential effectiveness of these inputs has been reduced due to the lack of facilities and
absence of standardisation. This is of prime concern in relation to the proposed GEF project, particularly
that the water and soil quality data are not comparable between sites due to the variety of laboratory
analytical and site sampling methods in use.
The proposal identifies the outstanding issues to be addressed. It recognises that:
-
the risk assessment of tailings dams needs a specialist, independent input;
-
while a financial programme to assist mine closure and rehabilitation is in place there has been only
limited progress in establishing an 'Environmental Fund';
-
better baseline information is essential to the improvement and protection of water quality;
-
central government should take a stronger lead in strategic planning so that sound priorities for action
are identified leading to the highest benefits in relation to investment;
-
water and soil monitoring needs to be strengthened and harmonised and accreditation procedures put in
place;
-
emergency response capability for local EPAs in terms of monitoring and analytical facilities,
personnel protection and training is necessary;
-
strengthening the capacity and emergency preparedness planning and response, particularly at local
level, is needed.
The rationale for World Bank and GEF support is clearly articulated in terms of trans-boundary
co-operation to reduce mine pollution risk and integrated water management, particularly in relation to the
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goals of the International Convention for the Protection & Sustainable Use of the Danube river. The recent
mining accidents in the Tisza catchment give urgency to the establishment of the project.
3.
Sub-components of Project Component D - Risk Reduction of Mining Accidents in the Tisza
Basin
Component D will be conducted in the following five sub-components:
D.1 - Establishing a Baseline and an Environmental Monitoring System
Key catchments in the Tisza catchment will be identified and monitoring systems will be installed to
determine the effectiveness of tailings dam remediation activities on surface and groundwater quality.
Deliverables are identified [manuals, models, training etc].
This is an essential first step in Component D but I have two concerns;
a. Problems with comparability of water and soil quality measurements have been identified [i.e.
sampling & analytical methods]. Every effort must be made to ensure that the data conform to
international standards otherwise the outcomes may be meaningless. It is necessary to state
explicitly in the proposal how this is to be achieved.
b. The project duration, and therefore the monitoring, appears to be from 2004 to 2008 [Annex 5].
At best this would only give four years of monitoring which may be insufficient to indicate the
effectiveness of any remedial measures. Opportunities to extend monitoring over a longer period
should be examined.
D.2 - Hazard Prevention & Remediation Interventions
High risk tailings and mine waste facilities will be identified in the Tisza basin and a number of hazard
prevention and remediation measures will be installed. Two sites have already been selected for urgent
work and other sites, following survey, will be considered. The remediation and prevention work will
involve an expert multi-national and regional task force. Detailed analytical procedures covering
geo-technical and hydrological considerations will be used. Workshops involving designers, regulators and
mine operators will be held. A second phase of the activity will use the knowledge gained to replicate
prevention/remedial works on other dams/dumps in the Tisza basin.
The concepts are soundly based. It is encouraging that two sites have already been identified. This will
enable a rapid start up on this sub-component.
My concerns are as follows:
a. The problems with tailings dams and mine waste dumps are not unique to Romania. There have
been many investigations and suggested design/remediation procedures in other parts of the
world. A review of current international experience is essential at the outset of this
sub-component.
b. While it is necessary to involve stakeholders in the deliberations and/or on committees, it is
important that strong vested interests from one side or the other do not unduly influence the
outcomes. [I am conscious of the debate in this sector that has continued between the
International Union for the Conservation of Nature and the International Council on Metals and
the Environment, particularly in relation to World Heritage Sites.] How is a balanced outcome
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going to be achieved? Is there a need to establish an independent expert international review
group?
c. There is the opportunity to select other sites for prevention/remediation works. There could be a
push [possibly political] to remediate more sites than can be readily supported by the available
funding. This should be resisted. It will be better to do good quality work leading to a sound
scientific/engineering understanding of processes and procedures on a few sites rather than lesser
quality work on many.
d. There is the need to link the technical aspects of Component D - and in particular the work to be
undertaken under D.2 - with other Components of the overall project, particularly floods, dam
safety and earthquakes. It is not clear how this technical/scientific link is to be achieved.
D.3 - Engineering and Environmental Guidelines for Tailings Dams and Waste Facilities
On the basis of activities in D.1 and D.2 training will be undertaken and associated guidelines and manuals
prepared. This will be a very valuable output.
My concerns are that:
a. No indication is given as to which organisation(s) will undertake this work - responsibilities
should be clearly stated at the start.
b. Use should be made of existing reported technical experience available internationally. The
training and guidance material should be set in a regional rather than exclusively Romanian
context.
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D.4 - Regional Mine Spill Disaster Response System
This activity will improve the effectiveness of the current system in planning and in response to a mine spill
for selected mining companies in the Tisza basin. It will complement emergency procedures that will be
developed for other elements of the overall project e.g. flood forecasting. D.4 will finance codes of practice,
training, response plans[mine operators and local communities], public awareness and communication
systems.
As indicated above this sub-component forms part of the overall Project and I would be concerned if
there were not clear links and responsibilities established, for example between technical teams
working on flooding and mine spills. How is such technical liaison to be put in place?
D.5 - Promoting Trans-boundary Co-operation on Integrated Water Resources Management for the Tisza
Basin
This is a central element of sub -component D.
The meetings and workshops involving riparian interests need to continue throughout the project and
beyond.
4. Project Component E - Project Management
This element of the overall proposal is concerned with project implementation. Each of the Project
Components will have its own Project Management Unit [PMU] lying in different ministries. That for
Component D will be in the National Agency for Mineral Resources. There will be a PMU in the Ministry
of Transport, Construction & Tourism concerned with monitoring and reporting on project progress over
the Components in the project as a whole. The responsibility of this centralised PMU appears to be
focussed on administrative rather than technical aspects.
If this is the case there is cause for concern. For the Project overall and for Component D to meet
their objectives there must be ready exchange of technical information between components. It is not
clear how this is to be achieved.
5. Annex 4- Incremental Costs and Global Environmental Benefits - Component D
This Annex reviews much of the material previously covered in the proposal document. It does, however,
provide more detail of (a) the two major pollution incidents in NW Romania in 2000; (b) the Romanian
government's longer term proposed budget to address mine closure and environmental rehabilitation; and
(c) the level of finance provided by other countries and international agencies supporting work closely
related to the mine waste proposal. The Annex also provides a sound rationale for the World Bank
involvement with the project on the basis of incremental costs and benefits.
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6. Finance
The costs given for each of the sub-components appear adequate for the tasks proposed. However concern
has already been expressed that (a) the monitoring activity may be too short and so modest additional funds
to support Sub-component D.1 to extend monitoring time may be needed and (b) the number of sites
selected for detailed investigation/remediation should be limited [sub-component D.2].
It is surprising that there is no financial input to the proposed project from the mining industry. The
work is in their direct interest. It is noted that the outcomes may be used to exert leverage on the
industry in future but some financial input at this stage would demonstrate a commitment to
environmental protection. Is it possible to explore this further?
7. Timelines
The progress of the work in Sub-component D [and the remainder of the project] is clearly linked to
outcomes. However the proposal gives no indication of how this 'timeline/flowchart' is envisaged.
It would be helpful to identify key outcomes from the sub-components and their anticipated delivery
dates. If this is not done scientists/engineers working on Sub-components may be unaware that lack of
a timely activity output is hindering progress in other areas.
8. Conclusions and Recommendations
The proposal is clearly presented. Component D identifies important regional issues in relation to mining
wastes and a means of addressing these through the project work. The proposal meets the GEF
requirements and will benefit from being part of a much larger World Bank project. The environmental
problems identified are major and solutions are needed urgently. The project results will deliver local,
regional and international benefits. The overall proposed financial provisions are appropriate to the
scheduled work.
I am satisfied with the proposal but have made a number of recommendations [introduced in bold in the
body of the text] which I consider would enhance the project. These are as follows:
·
make a clear commitment to establishing for the project water and soil quality sampling and analytical
methods that meet international standards [D.1]
·
extend the monitoring period beyond 2008 and secure appropriate funding for this [D.1 and Finance]
·
explicitly identify at the start of the project the need to review fully international experience and
guidance manuals in the design and remediation of mine waste systems [D.2, D.3]
·
avoid outcomes influenced by strong vested interests e.g. by establishing an independent expert
international review group [D.2]
·
limit the number of sites for protection/remediation so that a sound understanding of processes and
procedures can be obtained [D.2]
·
ensure that strong scientific/technical links are established between scientific/engineering teams
working on Components and sub-components [D.2, D.4 & Component E]
·
clearly identify organisation(s) responsible for the preparation of guidance manuals and training [D.3]
·
arrange regular meetings/contacts between trans-boundary parties for the duration of the project and
beyond [D.5]
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·
re-examine opportunities to involve the mining industry in funding some elements of the project
[Finance]
·
prepare a timeline flow diagram identifying key outputs and the essential links between Components
and the D Sub-components.
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World Bank Response to STAP Reviewer Comments
The STAP Reviewer recognizes the importance of the proposed GEF-component of the Hazards Risk
Mitigation and Emergency Preparedness Project in terms of transboundary cooperation to reduce mine
pollution risks and promote integrated water management. He also acknowledges that the recent mining
incidents in the Tisza catchment give urgency to the formulation and implementation of the Project.
The STAT Reviewer provides very useful suggestions and recommendations to enhance the quality of the
project. These recommendations are summarized presented below (italic text). A brief explanation on how
the team is planning to incorporate the recommendations in the revised version of the PAD is also included
below.
Activity D.1: Establishing a Baseline and an Environmental Monitoring System. Under this
sub-component, two recommendations were made:
·
Make a clear commitment to establishing for the project, water and soil quality sampling and
analytical methods that meet international standard; and
·
Extend the monitoring period beyond 2008 and secure appropriate funding for this.
Harmonization of standards and approaches. The revised PAD will make explicit reference that the project
will support the setting of common baseline indicators for water and sediment quality monitoring as well as
improvement and harmonization of Romanian monitoring systems with those of the other riparian countries
of the Tisza basin. It should be noted that EU requirements for dangerous substances discharged to water
have been transposed into Romanian legislation and approximation with the EU Water Framework
Directive is expected to be completed at the end of 2003. Thus, the monitoring system will have to meet
EU standards.
Sustainability beyond 2008. We would like to point out that one of the objectives of the project is capacity
building and capacity enhancement at the level of the mine operators and local environmental authorities. If
the project is successful in achieving this goal, environmental monitoring should continue with no external
support once the project is over. Commitment will be sough from the Government to provide the necessary
funding to operate and maintain the monitoring system on the long-term. There is some assurance that
budget resources will be made available to operate and maintain the system since Romania is moving
forward with EU accession and the country needs to demonstrate compliance with EU environmental
requirements.
D.2 ­ Hazard Prevention and Remediation Intervention. Under this sub-component the following
recommendations were made:
·
Explicitly identify at the start of the project the need to review fully international experience and
guidance manuals in the design and remediation of mine waste systems;.
·
Avoid outcomes influenced by strong vested interest, e.g., by establishing an independent expert
international review group;
·
Limit the number of sites for protection/remediation so that a sound understanding of processed and
procedures can be obtained; and
·
Ensure that strong scientific/technical links are established between scientific/engineering teams
working on Components and D Sub-components.
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International experience. A review of international experience was performed during the preparatory phase,
followed up by the participation of Romanian experts on a NATO-Sponsored Pilot Study on Prevention
and Remediation Issues in Selected Industrial Sectors, and the organization of a Regional Workshop on the
Management and Safety of Tailings Dams in Sinaia, Romania, in October 2003. Two documents, A Guide
to the Management of Tailings Facilities and Developing an Operation, Maintenance and Surveillance
Manual for Tailings and Water Management Facilities, developed through coordination of the Mining
Association of Canada were found very relevant to the Romania situation. The review of international
experience will continue through out project implementation.
Independency. The project envisages the involvement of two international experts to strengthen the National
Commission on Dam Safety (CONSIB). One of the experts will focus on the safety of tailings facilities and
mine waste dumps, and the second one will focus on failure modes and effects analysis. Both experts will
be recruited, under terms of reference satisfactory to the World Bank, to act as independent experts. They
will provide an independent and high level technical evaluation of the proposed measures to reduce the risk
of dam failures during project implementation. They will undertake review of the hazards prevention and
remediation activities twice a year, participate in failure modes and effects analysis workshops, participate
in the development of the risk assessment methodology, and identify implementation issues and develop
recommendations for the consideration of the Government. The project also envisages the establishment of
a Regional Task Force (conformed by representatives from the riparian countries of the Tisza Basin) to
review the failure modes and effects analysis to be conducted under the project.
Scope of remediation. Given the large number of mine sites that require improvement, the project will try
to strike a balance between being cost-effective and technically and scientifically comprehensive, detailed
and sound. The Regional Task Force mentioned above will assist in getting the right balance so the project
can maximise risk reduction within a reasonable timeframe and with tolerable cost, and bring the residual
risk to an overall sustainable and acceptable level.
Synergies between project components. The revised PAD will provide concrete suggestions for making
sure synergies are created between the various project components to build a common knowledge base,
particularly in the areas of flood management and water-retention and tailings dams safety. Regular
coordination meetings between PMUs will be organized during project implementation, some of which will
be facilitated by the two international experts on dam safety.
D.3 ­ Engineering and Environmental Guidelines for Tailings Dams and Waste Facilities. Under this
sub-component the following recommendation was made:
·
Clearly identify organizations(s) responsible for the preparation of guidance manuals and training.
While the project envisages the National Agency for Mineral Resources to coordinate activities under
Component D, the NAMR will coordinate the development of manuals, guides and training activities very
closely with CONSIB, the Ministry of Agriculture, Forestry, Water and Environment, and the Ministry of
Economy and Commerce. CONSIB will gradually take responsibility for the elaboration of dam-safety
related manuals and training activities.
D.5 ­ Promoting Transboundary Cooperation on Integrated Water Resources Management for the
Tisza Basin. Under this sub-component the following recommendation was made:
·
Arrange regular meetings/contacts between transboundary parties for the duration of the project and
beyond.
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Participants at the Sinaia Regional Workshop agreed to foster and promote transboundary cooperation on
the management of tailings facilities within the context of overall integrated water resources management.
A proposal was put forward during the workshop to establish a Regional Task Force to review and
harmonize the Failure Mode and Effects Analysis process and standards. The task force will be conformed
by representatives from the riparian countries of the Tisza Basin, who will have the support of national
policy makers. The project will support a first concrete step towards a basin-wide cooperation among the
riparian countries. During project implementation other efforts will be supported to promote integrated
river basin management, building on existing transboundary and bilateral initiatives.
Finance. Under this heading the following recommendations were made:
·
Allocate additional funds to extend monitoring program; and.
·
Re-examine opportunities to involve the mining industry in funding some elements of the project.
GEF funding. The revised PAD will increase the size of sub-component D.1 by US$0.2 million to extend
the duration of monitoring program to 7 years, similar to the duration of the other project components.
Thus the total contribution from GEF towards the project will be US$7.0 million.
Additional internal resources. At present, all non-metal mines in Romania are state-owned. So far, there is
agreement that the Government will to finance 50% of the cost of component D, which demonstrates the
commitment of the Government to address environmental concerns in the mining sector. A second World
Bank Mining Closure and Social Mitigation Project (under preparation) is expected to address
environmental aspects of closed mines, including those related to tailings dams and waste facilities.
Timelines. Under this heading the following recommendation was made:
·
Prepare a timeline flow diagram identifying key outputs and the essential links between Components
and D Sub-components.
A detailed project implementation plan will be prepared as part of project appraisal.
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