Study on Economic Partnership Projects

in Developing Countries in FY2007

Study on Abu Rawash Wastewater Treatment Plant in Cairo

Arab Republic of Egypt

SUMMARY

March 2008

Tokyo Engineering Consultants Co., Ltd.

Dai Nippon ConstructionInternational Division Ebara EnvironmentalInternational Co., Ltd.

SUMMARY (1) Background and Necessity of Project

The capacity of the existing Abu Rawash WWTP, which is one of the major WWTPs on

the West Bank of River Nile in Cairo, is 0.4 million m3/day. However, only primary treatment

facilities exist there at present and the primarily treated effluent does not meet the legal

requirements. Moreover, inflow to the plant which is estimated to reach to 1.0 million m3/day

exceeds far the treatment capacity. Therefore, excess sewage is discharged without even

primary treatment causing water pollution in the Barakat and consecutive drains and

subsequently contributes pollution load to Rosetta branch of River Nile.

Under these circumstances, CAPW started extension of primary treatment facilities with

the capacity of 0.8 million m3/day. After completion of the extension work, which is expected

to be in September 2008, total treatment capacity of Abu Rawash WWTP will reach to 1.2

million m3/day (primary treatment). This capacity will be sufficient to treat future inflow for

some years. However, only primary treatment is provided by the extension work, and treated

effluent will remain insufficient to satisfy legal requirements. Provision of secondary treatment

facilities is indispensable to satisfy the requirements and to improve water quality environment

of the receiving water bodies.

Produced sludge at Abu Rawash WWTP together with sludge received from Zenein

WWTP is currently pumped to desert area located at a distance of about 34 km for treatment in

drying lagoons. Significant increase of sludge volume is expected when extension of primary

treatment facilities and consecutive construction of secondary treatment facilities are completed.

It is envisaged that the current sludge treatment is difficult to be continued because of huge

volume of sludge. Therefore, it is required to study appropriate onsite sludge treatment process

that could be applied in this particular case to reduce the volume of sludge and to stabilize its

characteristics.

In case sludge digestion is provided, produced methane gas can be utilized for electrical

power generation. Generated electricity can supply a substantial part of the power required for

operation of the plant. At present, electricity power generation by methane gas is being

practiced at Al Gabal Al Asfar WWTP located on the East Bank and more than 60 % of the

power requirement at WWTP is supplied by the generated electricity. Methane gas generation

will also contribute to the reduction of CO2 emission in the environment. CAPW desires

provision of sludge digester and electricity power generation using methane gas in this respect.

(2) Basic Policy to Determine Components of the Project

Sewerage service areas on the West Bank where Abu Rawash WWTP is located are

illustrated in Figure S-1. Projection of served population and wastewater generation both in

Abu Rawash WWTP and Zenein WWTP districts are shown in Tables S-1 and S-2 respectively.

Zenein WWTP of 0.33 million m3/day capacity cannot be expanded because the plant is

surrounded by urbanized areas. Therefore, increased wastewater flow in excess of the capacity

should be transferred to Abu Rawash WWTP. Design capacity of Abu Rawash WWTP is

planned to be 1.2 million m3/day in 2017 which is less than total wastewater flow to the plant

that is expected to be 1.35 million m3/day. Therefore, it is desirable to implement next

extension with capacity of 0.4 million m3/day before 2017 to take care of the deficit. Design

capacity for this project has been determined to be 1.2 million m3/day considering the fact that

the capacity of the primary treatment facilities after completion of the ongoing extension works

would be 1.2 million m3/day. Design flow and other parameters of Abu Rawash WWTP is

shown in Table S-3.

Table S-1 Wastewater Projection for Abu Rawash WWTP

Item 2006 2017 2027 2037

Sewered Population (persons) 2,755,067 3,444,131 4,060,438 4,822,850

Wastewater Discharge (m3/day) 1,022,130 1,305,326 1,555,148 1,885,734

Discharge from Zenein (m3/day) 0 44,286 85,618 154,565

Total Wastewater (m3/day) 1,022,130 1,349,612 1,640,766 2,040,299

Design Capacity (m3/day) 400,000 1,200,000 1,600,000 2,000,000

Table S-2 Wastewater Projection for Zenein WWTP

Item 2006 2017 2027 2037

Sewered Population (persons) 872,444 987,562 1,085,164 1,239,296

Wastewater Discharge (m3/day) 323,677 374,286 415,618 484,565

Discharge to Abu Rawash (m3/day) 0 44,286 85,618 154,565

Total Wastewater (m3/day) 323,677 330,000 330,000 330,000

Design Capacity (m3/day) 330,000 330,000 330,000 330,000

Table S-3 Design Flow and Sewage Characteristics

No. Item Values Remarks

1. Flow Rate and Raw Sewage Characteristics

1-1 Daily Average 1,200,000 m3/day

1-2 Daily Maximum 1,440,000 m3/day Daily Avg. ×1.2

1-3 Peak Flow 1,800,000 m3/day Daily Avg. ×1.5

No. Item Values Remarks

1-4 BOD (Raw Sewage) 310 mg/l

1-5 SS (Raw Sewage) 360 mg/l

2. Design Values and Removal Ratio

2-1 BOD (to Primary Tank) 359 mg/l Including return from sludge treatment

2-2 BOD (to Aeration Tank) 180 mg/l

2-3 BOD Removal Ratio (Primary Treatment) 50%

2-4 BOD Removal Ratio (Secondary Treatment) 85%

2-5 BOD Total Removal Ratio 93%

2-6 SS (to Primary Tank) 417 mg/l Including return from sludge treatment

2-7 SS (to Aeration Tank) 167 mg/l

2-8 SS Removal Ratio (Primary Treatment) 60%

2-9 SS Removal Ratio (Secondary Treatment) 85%

2-10 SS Total Removal Ratio 94%

3. Treated Effluent

3-1 BOD 27 mg/l

3-2 SS 25 mg/l

Figure S-1 Sewerage System in West Bank Area of Cairo

(3) Project Cost

① Project Capital Cost

The estimated project capital cost for this project is 5,566 million LE (117 billion Yen, or

990 million US$). The breakdown of the estimates is summarized in Table S-4 below.

Table S-4 Estimated Project Capital Cost

No. Items L.C. (1,000 LE)

F.C. (1,000 LE)

Total (1,000 LE)

1. Construction Cost A Sewage Treatment Facilities 1-1 Site preparation work 61,078 6,786 67,8641-2 Connection channel and chamber 138,373 78,016 216,3891-3 Aeration Tank 222,485 202,945 425,4301-4 Final Settling Tank 340,426 254,669 595,0951-5 Chlorination 32,779 28,500 61,2791-6 Effluent channel and chamber 38,331 39,306 77,6371-7 Administration facility 37,726 28,702 66,4281-8 Power receiving facility 51,115 67,909 119,024

1-9 Electrical facility for sewage facilities 57,128 100,628 157,756

1-10 Piping work for sewage facilities 7,000 0 7,000 Total of Sewage Treatment Facilities 986,441 807,461 1,793,902B Sludge Treatment Facilities 1-11 Sludge mixing tank 4,349 6,754 11,1031-12 Gravity thickener 77,072 73,907 150,9791-13 Sludge distribution tank 23,809 39,827 63,6361-14 Sludge digester tank 596,632 742,199 1,339,126

1-15 Electrical facility for sludge facilities 112,933 198,924 311,857

1-16 Digested gas generator 183,540 273,759 457,2991-17 Piping work for Sludge facilities 14,000 0 14,000 Total of Sludge Treatment Facilities 1,012,630 1,335,370 2,348,000 Sub-total (1) 1,999,071 2,142,831 4,141,902

2. Administration Cost 53,364 0 53,3643. Engineering Cost 129,333 123,960 253,2934. Price Contingency 199,907 214,283 414,1905. Physical Contingency 536,641 166,768 703,409 Sub-total (2-5) 919,245 505,011 1,423,256

Total 2,918,316 2,647,842 5,566,158

② Financial and Economic Analysis

(a) Financial Analysis

In order to evaluate the soundness and the sustainability of this Project from financial

viewpoint, the possibility of sustaining the financial burdens (such as debt repayment and

operation and maintenance costs in long run) by the Egyptian government and the executing

agencies is examined. It is recommended that financial burden be shared between the

beneficiaries and the government because of the fact that this Project should be undertaken with

the viewpoint of not only recovery rate of investment and profits but also considering that this is

a national project in the interests of environmental protection.

Financial evaluation is carried out by comparing benefits and convenience considering

the cases of “With” and “Without” the implementation of this Project. The opportunity cost of

capital is set up as shown below considering conditions of the overseas loans and the nature of

the Project. Results of the evaluation assuming that all the project expenses including

construction costs and O & M costs would be recovered are shown in Table S-5.

Opportunity Cost of Capital Supply Conditions of Funds Note

0.1 % JBIC STEP loan Application on or after 1st October 2007 0.65 % The priority conditions of JBIC loan Application on or after 1st October 2007

4.9 % L.C. portion: local procurement F.C. portion: JBIC STEP loan L.C. : F.C. = 52 : 48

5.8 % L.C. portion: local procurement F.C. portion: other countries aid L.C. : F.C. = 52 : 48

10.0 % Local procurement The short-term government bonds of Egypt

Table S-5 Financial Evaluation Index (All Project Expense Recovery)

Necessary Wastewater Tariff Level Wastewater Tariff

(LE/m3)

Net Present Value

(million LE) FIRR B/C

Ratio Multiple of Present Wastewater Tariff

Ratio of Total Household Income

(%) 0.210 -4767 - 0.128 2.0 0.48 0.711 -1443 0.1 % 0.736 6.8 1.62 0.746 -1214 0.65 % 0.778 7.1 1.70 1.119 1267 4.90 % 1.232 10.7 2.56 1.212 1880 5.70 % 1.344 11.5 2.77 1.822 5927 10.00 % 2.085 17.4 4.16

Notes: 1.Average household income per month: 1,280 LE/Family/Month 2.Present average of wastewater tariff: 0.105 LE/m3

Assuming that the STEP loan of JBIC with the lowest interest rate is provided for

implementation of this project, in order to make the realization of this project possible, it is

necessary to increase the expenses on wastewater tariff as a percentage of the total average

household income to at least 1.62%. At present, the wastewater tariff is 35% of water tariff.

If the wastewater tariff would be raised such that expenses on wastewater services becomes

1.62% of total household income for realization of this case, this might lead to increase in the

expenses on water and wastewater exceeding the allowable level (2 - 3% of an average

household income) and this level of increase in tariff might face opposition by the users.

As for the water and wastewater tariff, the Egyptian government has historically

maintained it at low level considering water to be a part of Basic Human Needs and therefore is

also politically sensitive issue. Moreover, people assume that they should have public services

from state which is accessed by all people and their opposition to increase in public utility

charges is strong. Hence, considering the present custom and level of citizen consciousness, it

is difficult that citizen in Study area would be able to bear the burden of the total amount of

construction costs, and the subsidy from Egyptian government would be indispensable in this

regard.

Basically, it is very difficult to get high returns from public works like wastewater

services and thereby to recover the total amount of costs incurred on such projects out of the

usage fees collected against such services. Therefore, the financial feasibility cannot be

performed with the financial evaluation technique generally performed for other sector projects.

The main purposes of installation of sewerage system are improvement of living environment

and protection of water environment against pollution. Hence, it is not appropriate to estimate

and aim the recovery and profits from sewerage projects in a way similar to other commercial

enterprises. Based on the discussion above, it is assumed that the full or partial costs on

construction and large equipment replacement are provided with the subsidy from the Egyptian

government, and the financial evaluation of Project is carried out with the purpose of recovery

of O&M cost only and with the partial recovery of construction cost along with full O&M cost.

The result obtained from this financial evaluation is presented in Table S-6.

Table S-6 Financial Evaluation Index

Necessary Wastewater Tariff Level Recovery Conditions Wastewater Tariff

(LE/m3) Multiple of Present Wastewater Tariff

Ratio of Total Household Income (%)

O&M Cost Recovery 0.123 1.2 0.28 Partial Construction Cost and

Full O&M Cost Recovery 0.526 5.0 1.20

For this case of evaluation, full O&M cost could be recovered when the present

wastewater tariff is raised to 1.2 times and calculated wastewater expenses constitute 0.28% of

average household income. The increase in tariff in this case is just 1.2 times and it would be

relatively easy to implement this kind of tariff increase and thereby recover O&M cost of the

Project.

In case of evaluation considering half of the construction cost recovery and full recovery

of O&M cost, the payment of calculated level of wastewater tariff is possible by the users,

because at this tariff level, the expenses on sewerage services constitute 1.20% of average

household income. Also by this increase and making water and wastewater tariff even

equivalent, the total expenses remains in allowable range of water and wastewater expenditure,

2-3% of household income. However, required increase in tariff level is very high (almost 5

times), and therefore change of users consciousness and opinion is indispensable. In this

respect, while following the policy of raising charge gradually, it is indispensable to carry out

the public awareness campaign to raise the awareness of residents regarding pollution and

environment protection by the implementation organization, with the objective of achieving

improvement in residents' environmental consciousness, and to obtain an understanding of a

tariff hike required for this.

(b) Economic Analysis

Although this project is analyzed from the viewpoint of economic rationality, it is more

related to environmental improvement of national undertaking, and it is difficult to specify the

direct benefits accompanying provision of secondary treatment at Abu Rawash WWTP in

quantitative terms. Moreover, the benefits for which quantitative evaluation is possible,

economic benefits are not of the scale corresponding to this Project. Therefore, the economic

analysis is carried out for this Project not in terms of the economic quantitative analysis by

EIRR but in terms of qualitative analysis.

Expected economic benefits of the implementation of this Project could be described in

terms of improvement in the water quality of Nile River and public water bodies, improvement

in the agricultural productivity accompanying water quality improvement, improvement in the

fishery catch accompanying water quality improvement, improvement in the living environment

around drain area, and others. The outline of these types of economic benefits is specified as

presented in Table S-7.

Table S-7 Economic Benefits

Economic Benefits Outline of Benefits ① Improvement in the

water quality of the Nile River and public water bodies

- Reduction of the water-purifying expense in the lower Nile delta - Increase in sightseeing potential

② Improvement in the agricultural productivity accompanying water quality improvement

- Improvement in the safety of agricultural products - The increase in the choice of the agricultural products of kinds which can be grown - Substitution of water for agricultural uses

③ Improvement in the fishery catch accompanying water quality improvement

- Improvement in the safety of fish catch

④ Improvement in the living environment around drain area

- Reduction of the infectious disease accompanying the public health improvement effect - Increase in the working days due to reduction of infectious disease - An improvement in the living environment due to reduced occurrence of bad smell

⑤ Others - Contribution to the agriculture by the practical use of dried treated sludge as a compost - Electric power generation by methane recovery - CER profit on sale as a clean development mechanism enterprise

③ Technical Alternatives

(a) Policy and Summary

Development of sewerage system in the Greater Cairo area is successfully proceeding

step by step through local funding resources and financial assistance from international aid

agencies. At the same time, it is creating new challenges in terms of managing required

operation and maintenance cost, within the limited sector budget, that is increasing at the same

rate as development. Sewerage system consists of sewer networks, the function of which is to

get rid of wastewater from living environment, and treatment plants, which facilitates treatment

of wastewater before discharging to public water body. Sewer networks do not require

considerable O&M cost once it is constructed because they mainly consist of pipelines and

channels. On the other hand, treatment plants require continuous O&M cost for electricity,

salary of staffs, maintenance of equipment, chemical and so on even after being constructed at

relatively higher cost.

The concept of lifecycle cost, which includes capital cost and O&M cost, has not been

considered appropriate due to the background that the priority has been focused on development

taking into consideration the situation of discharging untreated wastewater to public water body

at that time.

Therefore, it is expected to apply technologies that would result in saving of resources

and energy and thereby shall have impact in the form of reduction of O&M cost for facilities

constructed under this Project from the view point of sustainability. In terms of application of

resource and energy saving technologies, Japanese industries are very strong and well-known

throughout the world and applications of these technologies to a large scale project are very

effective.

Ultra fine bubble diffuser device, the latest energy saving technology, is applied for

wastewater treatment. Digested gas generation system, which can generate electricity and

utilize heat energy at the same time by using methane gas produced through anaerobic digestion,

is applied for sludge treatment. As a result of applications of resource and energy saving

technologies, a large fraction of electricity consumption inside Abu Rawash WWTP is covered

by digested gas generation. In addition, the last stage of sludge treatment could be carried out

utilizing natural energy by transferring digested sludge to drying beds located in the desert area.

It would enable reduction of initial cost that would otherwise be incurred on mechanical

dewatering facilities and O&M cost for chemical, maintenance and so on. Also, the

stabilization and maturation of sludge could be achieved through solar drying. Improvement of

quality and safety as fertilizer could be achieved by composting of dried sludge which is

currently operated by private agency. Treated sludge can contribute to agricultural sector of

Egypt, one of major sources of income, by supplying fertilizer continuously. At the same time,

disposal of sludge can be secured.

(b) Selection of Aeration Method

Aeration device consumes significant portion of total electricity used in sewage treatment.

In addition, its role is vital in activated sludge process. Therefore, aeration method should be

selected considering all factors regarding the efficiency of dissolving oxygen, economical aspect,

operation and maintenance, etc. In Egypt, mechanical aeration device has been common so far

due to factors such as easy maintenance and low initial cost. Fine bubble diffuser device was

initially introduced to aeration facilities of Stage 2 of Al-Gabal Al-Asfer WWTP, which has been

operative since 2006. In this Project, the application of ultra fine bubble diffuser device, which

is more effective than fine bubble diffuser device, is considered. Ultra fine bubble diffuser

device (Whole area differed type) is recommended due to the following factors.

− It is most effective in terms of energy saving due to its high efficiency in dissolving oxygen.

− It can be utilized for relatively longer time due to its non-clogging feature by adequate operation.

− It has high level of flexibility for various operations due to its feature. − The emission credit of reducing CO2 by saving power supply is expected. − It is the most economical since it requires the lowest O&M cost due to its high

efficiency and benefit of the emission credit of reducing CO2.

(c) Selection of Sludge Treatment Method

Anaerobic digestion is expected to be included in the sludge treatment process regarding

stability and safety of sludge quality considering its ultimate utilization as agricultural usage.

Organic constituent present in sewerage sludge is disintegrated and stabilized due to the function

of anaerobic biodegradation. Therefore, its value as fertilizer is improved by means of

maintaining fertility without having harmful effect toward growth of plants and eliminating the

hazardous microbes through this process.

Sludge treatment system should be selected considering factors such as the scale of

WWTP, quality of sludge, site condition, environment, economical efficiency, and operation and

maintenance on the basis of availability of ultimate utilization. Anaerobic digestion followed

by drying beds process (Gravity thickening → Anaerobic digestion → Sludge transfer → Drying

bed) is recommended due to the following reasons.

− This system produces the best quality of final product for agricultural usage by means of stabilizing and eliminating the hazardous microbes through the process of anaerobic digestion and use of drying beds.

− Total required electricity in the WWTP could be produced using methane gas generated through anaerobic digestion.

− The initial cost and operation cost such as polymer cost can be saved by utilizing the existing drying beds instead of mechanical dewatering unit.

− The emission credit of reducing CO2 by collecting methane gas and generating electricity is expected.

− The existing facilities such as sludge pumping station, sludge pipeline and drying beds are utilized.

− Drying of digested sludge compared to the raw sludge, which is currently being practiced, is expected to improve taking consideration of hygiene aspect such as odor and environmental and social aspects.

(d) Introduction of Digested Gas Generation System

As a result of introduction of digested gas generation system, approximately 40% of

energy possessed by digested gas can be obtained as electricity from generator driven by gas

engine using digested gas as a fuel. Furthermore, approximately 25-30% of energy can be

recovered by utilizing generated heat and radiated heat from gas engine as source of heat for

digester tank. As a result, approximately 65-70% of energy possessed by digested gas could be

utilized.

Expected electricity produced as a result of introduction of digested gas generation

system can cover total continuous electricity requirement (approximately 14,000kW) of

secondary treatment facilities and sludge treatment facilities, which will be constructed under

this Project at the Abu Rawash WWTP. Also, average electricity consumption (approximately

190,000kWh/day) of facilities constructed in this Project and average electricity consumption

(approximately 100,000kWh/day) of the existing facilities including extended primary treatment

facilities can be covered on steady basis considering load factor and operating rate of equipment.

Therefore, the introduction of digested gas generation system is strongly recommended taking

into consideration its effectiveness in form of reducing operation cost by reducing electricity

cost and considering its positive impact on the environmental conditions through reduction of

carbon emission.

(e) Clean Development Mechanism (CDM)

At present, in Abu Rawash WWTP, sludge produced from the primary treatment

(400,000m3/d) and sludge received from Zenein WWTP (330,000m3/d) is mixed and then

transferred to the drying beds located in desert at a distance of about 34 km from Abu Rawash

WWTP. GCSDC has planned to continue using sludge drying beds by transferring the sludge

to desert area after implementation of this project since they have already secured sufficient

space in and around existing sludge drying beds to handle additional sludge produced from the

secondary treatment facilities which will be constructed under this Project. The alternative

scenarios of sludge treatment system are shown in Figure S-2.

Alternative 1. Methane Extraction and Power Generation 【Project Scenario】

ＧＨＧ

ＧＨＧ

Wastewater Treatment

PlantSewage Sludge

Power Supply

Reduction of Power Supply

Anaerobic Digestion

Drying Beds

Digested Gas Generation System

Alternative 2. Drying Sludge by Transferring to the Desert (At present system) 【Baseline Scenario】

ＧＨＧ

ＧＨＧ

Wastewater Treatment

PlantSewageSludge

Power Supply

Drying Beds

Figure S-2 Alternative Scenarios of Sludge Treatment System

Sludge treatment system of Project scenario (Alternative 1) constitutes two procedures.

The first procedure is to extract methane from airtight anaerobic digesters by digesting organic

constituent present in sewerage sludge compulsorily. The second procedure is to generate

electricity by utilizing extracted methane. If compared to the present system used (Alternative

2), it can reduce direct escape of methane to the atmosphere, which occurs in case of digestion

in drying beds. In addition, it can reduce emissions of CO2 by substituting electricity generated

by methane for power supply instead of being generated by fossil fuel. Applied method has

already been approved as AM0013 [Avoided methane emissions from organic wastewater

treatment]. Therefore, Project scenario has high possibility to be approved as the Clean

Development Mechanism Project.

In Egypt, there is experience of Project scenario to be put into practice by utilizing

financial assistance from international aid agencies. However, it seems to be influenced by

financial barrier and it is difficult to manage own funding resources considering the budget scale

of Egyptian government. Also, there is no economical and financial advantage to choose

Alternative 1 against Alternative 2. Therefore, additionality of Alternative 1 can be proved.

Incentive of implementation arises due to financial benefits from CO2 emission credit by

registering as Clean Development Mechanism Project.

Baseline scenario is regarded as Alternative 2 (the treatment procedure practiced in

present situation). Based on the comparison, the reduction of methane and emissions of CO2

resulting from reduction of power supply is proved to be advantages and CO2 emission credit

generated from above reduction could be considered as benefits in financial evaluation.

④ Environmental and Social Considerations

Through confirmation of Environmental and Social considerations, the JBIC confirms

that project proponents are undertaking appropriate environmental and social considerations to

prevent or minimize the impact on the environment and local communities that may be caused

by the proposed projects to avoid bringing unacceptable effects and thereby, contribute to

sustainable development. As indicated in the JBIC Environmental Guidelines (JBIC

Guidelines for Confirmation of Environmental and Social Considerations, April 2002), the

following activities are to be carried out in the environmental study for this project to confirm

environmental and social considerations.

This project is not likely to have any serious negative impacts on environment and does

not have sensitive characteristics. Also the project site is not located in or around a sensitive

area. Rather, the project is expected to give better effluent quality and will have positive

impacts on receiving water bodies and sanitary conditions there. Also, the project is not

expected to cause any land acquisition or involuntary settlements. Therefore, this project could

probably be classified as Category B.

The implementation of this project will facilitate wastewater treatment to the secondary

level (now only primary treatment is being carried out at this WWTP). It is expected that this

improvement in treatment level shall provide significant positive impacts to the natural

environment through improvement of water environment in River Nile.

There are no sensitive areas such as national parks, nationally-designated protected areas

(coastal areas, wetlands, areas for ethnic minorities or indigenous people, and cultural heritage,

etc); Natural environment such as primary forests in tropical areas, habitats of important

ecological values (coral reefs, mangrove wetlands, etc.), habitats of rare species, areas in danger

of salt-accumulation or soil erosion, areas with remarkable tendency towards desertification,

etc.; and areas with unique archaeological, historical or cultural values, etc., in and around the

site proposed for facilities to be undertaken in this Project at Abu Rawash WWTP.

During the construction stage, construction works may result in some negative impacts on

the natural environment such as air and sound. However, these impacts are just temporary and

could be mitigated through appropriate construction methods. There are no protected areas or

sensitive ecological areas in or around the project site.

Through upgraded treatment of collected wastewater in this project, the project is

expected to improve social environment in the form of improved sanitary conditions in the West

Bank of River Nile in Greater Cairo. The Environmental Checklist for environmental review

of this Project considering JBIC Guidelines is summarized and presented as Table S-8.

Category Environmental Item Main Check Items Confirmation of Environmental Considerations

(1) EIA and Environmental Permits

① Has EIA report been officially completed? ② Has EIA report been approved by authorities of the host country’s government? ③ Has EIA report been unconditionally approved? If conditions are imposed on the approval of EIA reports, are the conditions satisfied? ④ In addition to the above approvals, have other required environmental permits been obtained from the appropriate regulatory authorities of the host country’s government?

① Preparation of EIA report is required according to Egyptian regulations for expansion of WWTP facilities if the project is categorized in Black List and should be prepared. Normally, Letter of intent along with three copies of EIA report is submitted to get approval from EEAA.② ③ No. The CAPW has been requested to obtain the approval letter from EEAA before implementation starts. Extension of primary facilities is ongoing based on the approval letter obtained from EEAA without full EIA for fast implementation.④ Not yet obtained. However, permits could be easily obtained because effluent quality and sludge quality will improve with secondary treatment.

(2) Explanation to the Public

① Are contents of the project and the potential impacts adequately explained to the public based on appropriate procedures, including information disclosure? Is understanding obtained from the public?② Are proper responses made to comments from the public and regulatory authorities?

① According to the Egyptian EIA guidelines, during EIA study, NGOs and public participation is required and should be carried out. ② Also the Egyptian EIA guidelines mentions that meetings with other related government agencies should be carried out during EIA study and records should be made of meetings with these agencies, NGOs and public.

(1) Water Quality① Do pollutants, such as SS, BOD, COD, pH contained in treated effluent from a sewage treatment plant comply with the country’s effluent standards?

① Yes. Proposed project includes provisions of secondary treatment facilities that has been designed considering Egyptian Standards of effluent limits. This will contribute to improvement of water quality in receiving water bodies.

(2) Wastes

① Are wastes, such as sludges generated by the facility operations properly treated and disposed of in accordance with the country’s standards?

① At present, sludge generated by the facility operations are pumped to a lagoon in desert about 34 kms away from WWTP (50 kms away from the city) and also the WWTP is about 22 kms away from the urban areas. It is expected that in future sludge treatment facilities of the required capacity would be constructed.

(3) Soil Contamination

① If wastes, such as sludges are suspected to contain heavy metals, are adequate measures taken to prevent contamination of soil and groundwater by leachates from the wastes?

① Major part of influent to this WWTP is domestic wastewater and it is expected that industrial effluents should be discharged to the sewerage networks after treatment through their own facility. Also, the upper limits of heavy metals in sludge is defined according to Decree No. 44 of 2000 and should be monitored.

(4) Noise and Vibration

① Do noise and vibrations generated from the facilities, such as sludge treatment facilities and pumping stations comply with the country’s standards?

① Pumps and other noise causing instruments for the proposed facilities shall be located in concrete rooms and proper care should be taken to limit the amount of generated noises. Also the WWTP is about 22 kms away from the city.

(5) Odor

① Are adequate control measures taken for odour sources, such as sludge treatment facilities?

① Yes, at present sludge generated by the facility operations are pumped to a lagoon in desert 34 kms away from WWTP (50 kms away from the city). It is expected that in future sludge treatment facilities of the required capacity would be established.

1 Permits and Explanation

2 Mitigation Measures

Table S-8 Environmental Checklist: 19. Sewage and Wastewater Treatment

(1) Protected Areas① Is the project site located in protected areas designated by the country’s laws or international treaties and conventions? Is there a possibility that the project will affect the protected areas?

①No, project area is not a protected one, and project will not affect protected areas.

(2) Ecosystem

① Does the project site and discharge area encompass primeval forests, tropical rain forests, ecologically valuable habitats (e.g., coral reefs, mangroves, or tidal flats)?② Does the project site encompass the protected habitats of endangered species designated by the country’s laws or international treaties and conventions?③ If significant ecological impacts are anticipated, are adequate protection measures taken to reduce the impacts on the ecosystem?④ Is there a possibility that the project will adversely affect aquatic environments, such as rivers? Are adequate measures taken to reduce the impacts on aquatic environments, such as aquatic organisms?

①,② Project area does not contain any kind of ecologically valuable habitats and does not encompass the protected habitats of endangered species.③Significant negative ecological impacts are not anticipated. Yes, authorities carry on periodical and non periodical auditing as to take proper action with any environmental law violation(s).④ Project's location is far away from aquatic environments. Also, the implementation of project will improve water quality of River Nile by abatement of pollution load in the treated effluents using secondary level of treatment (at present only primary level of treatment is available).

(1) Resettlement

① Is involuntary resettlement caused by project implementation? If involuntary resettlement is caused, are efforts made to minimize the impacts caused by the resettlement? ② Is adequate explanation on relocation and compensation given to affected persons prior to resettlement?③ Is the resettlement plan, including proper compensation, restoration of livelihoods and living standards developed based on socioeconomic studies on resettlement?④ Does the resettlement plan pay particular attention to vulnerable groups or persons, including women, children, the elderly, people below the poverty line, ethnic minorities, and indigenous peoples? ⑤ Are agreements with the affected persons obtained prior to resettlement? ⑥ Is the organizational framework established to properly implement resettlement? Are the capacity and budget secured to implement the plan?⑦ Is a plan developed to monitor the impacts of resettlement?

①,②,③,④,⑤,⑥,⑦ The project area is a governmental property and is located in the boundary of existing Abu Rawash WWTP, therefore no resettlement caused by the project is expected.

(2) Living and Livelihood

① Is there a possibility that changes in land uses and water uses due to the project will adversely affect the living conditions of inhabitants?② Is there a possibility that the project will adversely affect the living conditions of inhabitants? Are adequate measures considered to reduce the impacts, if necessary?

① Changes in land use and water use will not affect adversely on living conditions of inhabitant. Rather, it will have positive impacts on their living conditions.② The project is also expected to have positive impacts on financial conditions of the inhabitants during construction phase.

(3) Heritage

① Is there a possibility that the project will damage the local archeological, historical, cultural, and religious heritage sites? Are adequate measures considered to protect these sites in accordance with the country’s laws?

① There is no possibility that the proposed projects will damage any local archeological, historical, cultural, and religious heritage sites. Egyptian laws are defined for protected areas (Law 102) and for protecting areas of cultural heritage (Law 17) and adequate measures should be considered during construction phase.

3 Natural Environment

4 Social Environment

(4) Landscape① Is there a possibility that the project will adversely affect the local landscape? Are necessary measures taken?

① The proposed project will not have adverse effects on local landscape as area is located in the campus of existing WWTP. Also, the WWTP has a provision of green belt around it.

(5) Ethnic Minorities and Indigenous Peoples

① Does the project comply with the country’s laws for rights of ethnic minorities and indigenous peoples? ② Are considerations given to reduce the impacts on culture and lifestyle of ethnic minorities and indigenous peoples?

①,② Ethnic minorities and indigenous people are not settled in the project area and no serious impacts of project activities are expected on culture and lifestyle of ethnic minorities and indigenous people.

(1) Impacts during Construction

① Are adequate measures considered to reduce impacts during construction (e.g., noise, vibrations, turbid water, dust, exhaust gases, and wastes)?② If construction activities adversely affect the natural environment (ecosystem), are adequate measures considered to reduce impacts?③ If construction activities adversely affect the social environment, are adequate measures considered to reduce impacts? ④ If necessary, is health and safety education (e.g., traffic safety, public health) provided for project personnel, including workers?

①,②,③,④ Serious impacts on the natural, and social environment are not anticipated. During the construction phase, appropriate technologies should be considered to reduce impacts due to noise, vibrations, turbid water, dust, exhaust gases and wastes and mitigation measures should be adopted. Also, measures of traffic safety and public health should be considered for project personnel during construction stage.

(2) Monitoring

① Does the proponent develop and implement monitoring program for the environmental items that are considered to have potential impacts?② Are the items, methods and frequencies included in the monitoring program judged to be appropriate?③ Does the proponent establish an adequate monitoring framework (organization, personnel, equipment, and adequate budget to sustain the monitoring framework)?④ Are any regulatory requirements pertaining to the monitoring report system identified, such as the format and frequency of reports from the proponent to the regulatory authorities?

① Suitable operation of sewerage system shall contribute to improvement of natural and social environments. Monitoring of operation of the system is important and the GCSDC is carrying out operation and management of existing facilities at Abu Rawash appropriately including monitoring of effluent quality. In Decree 8 of 1983, rules are also stated related to monitoring of effluent quality periodically for establishments that have been provided license to discharge into water bodies.② Yes, according to local regulations and standards.③ Yes, CAPW and GCSDC have adequately defined monitoring frameworks. The GCSDC submits monthly report of O&M to CAPW.④ As mentioned in the EIA's approval, preparing an environmental record is a mandatory as to be checked in any periodical or non periodical environmental audit.

6 NoteNote on Using Environmental Checklist

① If necessary, the impacts to transboundary or global issues should be confirmed (e.g., the project includes factors that may cause problems, such as transboundary waste treatment, acid rain, destruction of the ozone layer, or global warming).

① There is no expected impact towards boundary or global issues.

1) Regarding the term “Country’s Standards” mentioned in the above table, in the event that environmental standards in the country where the project is located diverge significantly from international standards, appropriate environmental considerations are made, if necessary. In cases where local environmental regulations are yet to be established in some areas, considerations should be made based on comparisons with appropriate standards of other countries (including Japan' experience).2) Environmental checklist provides general environmental items to be checked. It may be necessary to add or delete an item taking into account the characteristics of the project and the particular circumstances of the country and locality in which it is located.

4 Social Environment

5 Others

(4) Implementation Schedule of Project

Implementation schedule starting from signing of Loan Agreement has been developed as

shown in Figure S-3 taking into account following necessary steps would be required.

(1) Selection of consultant 10 months

(2) Detail design preparation 10 months

(3) Selection of contractor 10 months

(4) Construction works 42 months

Total 72 months (6 years)

Implementation of the project has been estimated to extend over 72 months (6 years) in

total. Duration necessary for selection of the consultant and the contractor has been decided

considering the JBIC’s standard procedures.

Duration

(months) 0 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7

Loan Agreement

f Consultant

tion of Shortlist and RFP

al of the RFP by GOE

rence to the RFP by JBIC

RFP to Shortlisted Consultant

of Proposals

al of Evaluation by GOE

oncurrence for Proposal Evaluation

Negotiation with Candidate Consultant

al of the Contract by GOE

oncurrence for Contract

Award

Service for WWTP

Works

Evaluation

ant Supervision

f Contractor for WWTP

on of Tender Documents/JBIC rence

Period

of Tender/Post-qualification

oncurrence for Tender Evaluation

Negotiation with Candidate Contractor

oncurrence for Contract

of Letter of Credit(L/C)/Issuing Letter mencement(L/COM)

Award

n Works

Plant Operation Commencement

ning of the Plant / Training

Year 5 Year 6 Year 7Scope/Events

YeaYear 1 Year 2 Year 3 Year 4

8 9 10 11 12

0 Signing of

1 Selection o

1 Prepara

2 Approv

3 Concur

4 Issuing

5 Evaluation

6 Approv

7 JBIC C

8 Contract

9 Approv

10 JBIC C

11 Contract

2 Engineering

1 Design

2 Tender

3 Consult

3 Selection o

1PreparatiConcur

2 Tender

3 Evaluation

4 JBIC C

5 Contract

6 JBIC C

7Openingof Com

8 Contract

4 Constructio

5 Commissio

r 8

Figure S-3 Implementation Schedule

(5) Feasibility of Request for Japanese Yen Loan for Project Implementation

CAPW and MOHUUD have intention that loans from bilateral or international funding

agency should be introduced to projects for construction of major pumping stations and

wastewater treatment plans because large amount of foreign currency is usually required for

these projects. They desire Japanese Yen Loan for the construction of secondary treatment and

sludge treatment facilities at Abu Rawash WWTP.

The scale of the Project is very large and a huge amount of cost, i.e., LE 5,566 million,

and longer implementation period would be required to complete the project. Therefore,

considering the easiness of obtaining required funds and to ascertain realization of the project, it

is more appropriate to implement this project in phases. Taking into account technical

constraints and benefits, construction works are divided into two phases. During each of the

phases, construction of secondary treatment facilities and corresponding sludge treatment

facilities of 0.6 million m3/day capacity would be carried out. Facilities that are difficult to

construct in phases should be included in the first phase construction works. The treatment

facilities included in each phase are illustrated in Figure S-4.

Project costs of first and second phases in case of phased implementation are shown in

Tables S-9 and S-10 respectively. Total project cost increased since price contingency

increased because of prolonged project period.

Table S-9 Project Cost, First Phase

No. Item L.C. (’000 LE)

F.C. (’000 LE)

Total (’000 LE)

1. Construction Cost 1,139,724 1,186,396 2,326,1212. Administration Expenses 29,969 0 29,9693. Engineering Cost 73,737 68,632 142,3694. Physical Contingency 113,972 118,640 232,612

5. Price Contingency (Escalation Cost) 305,953 92,332 398,285

Total 1,663,355 1,466,000 3,129,356

Table S-10 Project Cost, Second Phase

No. Item L.C. (’000 LE)

F.C. (’000 LE)

Total (’000 LE)

1. Construction Cost 859,347 956,434 1,815,7822. Administration Expenses 26,975 0 26,9753. Engineering Cost 64,114 57,861 121,9754. Physical Contingency 85,935 95,643 181,5785. Price Contingency (Escalation Cost) 408,831 125,443 534,274

Total 1,445,202 1,235,381 2,680,584

Proposed Facilities area

Figure S-4 Plan of Phased Construction

(6) Technical Advantages of Japanese Companies Japan has experienced severe environmental problems and shortage of energy during its

economic boom era and coped with these problems earlier than any other countries by

aggressively developing technologies for environment and energy saving. Technologies

utilized in wastewater treatment plant are combination of these technologies and therefore

Japanese companies are thought to have enough competitiveness in this field. Also for

construction of wastewater treatment plant, in which civil and architectural works and

mechanical and electrical works are complicatedly intermixed, intricate procedures are required

for quality and schedule management. Japanese engineers, through their long experience

within country and overseas, have sufficient management capabilities to complete construction

within scheduled time and have competence for quality, schedule and safety management. It is

therefore desirable to procure construction management services from Japanese companies.

Among technologies proposed to be adopted for this Project, salient ones are ultra-fine

bubble aeration system, egg-shaped digester of pre-stressed concrete, methane gas engine for

power generation and SCADA system for monitoring and remote control. None of these is

exclusively unique Japanese technology, but Japanese companies are capable to integrate these

technologies for the purpose of energy saving, resource saving and with high efficiency and

efficacy. Also Japanese companies have good reputation that they are enthusiastic for

technology transfer and they take care of repair after completion of the project. These

advantages are widely recognized among Egyptian people concerned.

On the other hand, most of the large scale wastewater treatment plants in Greater Cairo

have been implemented by US and European companies who have accumulated experience.

Japanese companies have engaged in the water and wastewater projects funded by Japanese

grant aid, but have no experience to participate in the project on commercial basis. Since

construction of wastewater treatment plant does not require special advanced technologies, and

it is more advantageous to procure equipment or goods from Europe or neighboring countries

than from Japan, it is very difficult for Japanese companies to win bidding in case of un-tied

loan.

Possibility of getting CDM certificate for the project is considered to be very high. If

the project is registered as CDM project, Japan will have an advantage to purchase CER. It is

desirable that this project should be implemented by JBIC STEP Loan, and Japanese company

should take lead in this regard. It is, therefore, important to explain advantages of JBIC STEP

Loan to Egyptian authorities concerned and obtain their understanding on it.

(7) Schedule to Realization of the Project and Risks to Hinder It MOIC requested to Embassy of Japan in November 2007 that construction of Abu

Rawash WWTP should be added to the request list for Japanese Yen Loan. CAPW obtained

approval from Prime Minister in the same month that Project on Abu Rawash WWTP be

implemented with Japanese Yen Loan.

Loans have been utilized for the foreign portion of the construction of wastewater

treatment plants and local portion has been borne by Egyptian government. If the same policy

is adopted, Egyptian government should provide LE 2,918 million out of total project cost of LE

5,566 million. Expenditure will continue over 7 years, and maximum annual expenditure is

expected to be LE 833 million. If the Project is implemented in two phases, project period

would be 10 years at least with maximum annual expenditure of LE 494 million. These

expenditures are considered to be heavy burden taking into account total budget for wastewater

projects in Greater Cairo districts during Sixth Five-Year Plan (2007/08 – 2011/12) is LE 1,466

million.

Foreign portion of the project costs is LE 2,648 million in case of non-phased

implementation. In case of phased implementation, the costs for the first and second phases

are LE 1,466 million and LE 1,235 million, respectively. These amounts might be largest

taking into account the fact that cumulative amount of Japanese Loan to Egypt by the year 2005

is approximately Japanese Yen 475,700 million (approximately LE 22,590 million) and largest

amount for one project is Japanese Yen 34,800 million (approximately LE 1,650 million ) for

Great Egyptian Museum signed in 2006.

For realization of the Japanese Yen Loan for the Project, understanding by both Egyptian

and Japanese government officials concerned is the most required and indispensable.

(8) Location of Project Site

Figure S-5 Location of Abu Rawash WWTP