Quick Facts

Countries:
Where the impacts of the investment may be experienced.
  • Pakistan
Banks:
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
  • Asian Development Bank (ADB)
  • Asian Infrastructure Investment Bank (AIIB)
Status: Approved
Bank Risk Rating: A
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Board Decision Date: 2016-06-24
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower or Client: Islamic Republic of Pakistan
The holder of the loan, grant, or other investment.
Sectors:
The service or industry focus of the investment. A project can have several sectors.
  • Transport
Potential Rights Impacts:
Only for projects receiving a detailed analysis, a broad category of human and environmental rights and frequently at-risk populations.
  • Cultural Rights
  • Healthy Environment
  • Housing & Property
  • Indigenous Peoples
  • Labor & Livelihood
  • Right to Food
Investment Amount (USD): $ 100.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Project Cost (USD): $ 273.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please see updated project documentation for more information.

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Primary Source

Original disclosure @ AIIB website
Updated in EWS: 2018-02-27
National Motorway M-4 (Shorkot-Khanewal Section) Project
AIIB-00001

Project Description

One of the Asian Infrastructure Investment Bank’s first projects, the National Motorway M-4 project involves construction of 64 kilometers of a four-lane section of motorway that will link Shorkot to Khanewal in the Punjab province of Pakistan. The motorway will be four lanes wide, with each lane 3.65m wide.

The project has the following components:

Construction of a 4 lane dual carriageway
Construction of interchanges at various road crossings
Construction of bridges at Ravi river and Sadhnai Canal

Location:
The length of this Motorway Project is about 184 Km starting from the end point of Faisalabad-Pindi Bhattian Motorway (M-3) near Faisalabad and ending at National Highway Multan- Khanewal Road (N-5). The villages impacted, particularly by land acquisition, will be in the Jhang and Khanewal districts of Punjab province.

Resources needed:
Land acquisition. ADB documents state that the Project will require acquisition of 1616.7 acres of private land in 35 villages/mouzas and 79.1 uncultivated government land for the right of way. Other bank documents provide what appear to be contradictory estimates of the land required for acquisition and the numbers of households displaced. More clarity is needed on the scope of these impacts.

Key Dates:
Project implementation is from June 2016 to June 2020. Loan closing date December 31, 2020.

Early Warning System Project Analysis

Risk Assessment:
Category A for Environment and Involuntary Resettlement; Category C for Indigenous Peoples. As a co-financed project between ADB and AIIB, this project will apply the Asian Development Bank’s (ADB) Safeguard Policy Statement. The ADB is the lead co-financier and will administer the project on behalf of other co-financiers. The ADB classifies proposed projects depending on the significance of the potential environmental impacts and risks. According to the ADB and AIIB, the Project has been assigned Category A for Environment, Category A for Involuntary Resettlement, and Category C for Indigenous Peoples. This categorization recognizes the need for in-depth review of environmental and social impacts and preparation of a detailed planning instrument to support involuntary resettlement and land acquisition.

APPLICABLE SOCIAL & ENVIRONMENTAL STANDARDS
This project will use ADB’s Safeguard Policy Statement. Based on ADB documents, the following ADB safeguards are triggered:

Environmental Assessment - triggered “due to the potential multi-dimensional environmental and social concerns that could be sensitive, diverse or unprecedented.” According to the AIIB documents, “[t]he major environmental impacts are concentrated in the construction phase. Soil erosion, dust, and noise impacts are likely to be significant. Noise impacts will persist into the operational phase.” The Environmental Management Plan includes measures to minimize anticipated impacts during construction and operation.

Involuntary Resettlement – triggered because according to the ESIA, the “most significant impact of the project is the resettlement of residents and taking about 4715 acres of agricultural land out of production.”

Indigenous Peoples – NOT triggered. According to project documents, “the screening of project confirmed that no IP groups were found existing in the project areas.”

People Affected By This Project

OUR RISK ASSESSMENT
Based on the project documents, this project poses potential risks to the following human rights:

RIGHT TO ADEQUATE HOUSING
The project poses serious impacts on the right to adequate housing. NGO Forum on ADB has called into question several aspects related to resettlement, including the calculation and disclosure of total number of households who will be displaced and the identification and entitlements of of tribal populations (discussed below). More clarity is needed in documentation and community outreach in order to understand the scope of resettlement impacts. According to AIIB documents, the project will require 1616.7 acres of private land “that will impact 3,429 households (23,186 displaced persons), of which 2,754 persons will lose more than 10 % of their productive land and 162 households with 1,302 members will be physically displaced.” Resettlement will be managed by the National Highway Authority of Pakistan. The National Highway Authority has prepared and submitted to ADB the final land acquisition and resettlement plan (LARP).

The NGO Forum on ADB sought clarification from the ADB on estimates pertaining to the number of households losing their land as a result of the Project which was pegged at 3,429 displaced households which was only translated to 6,036 displaced persons or roughly just two individuals in each household. If not addressed, could leave thousands of people uncompensated and worse off after the Project.

RIGHT TO FOOD
According to the Land Acquisition and Resettlement Plan, “the land surrounding the project corridor is irrigated agricultural land which is mostly cultivated.” Crops grown along the project corridor include wheat, cotton, sugarcane, rice and maize. To the extent that the communities displaced by the project rely on this agricultural land for sustenance, this project may impact their access to the land and thus the right to food may be impacted. Bank documents also indicate that 91,661 trees will have to be cut down in the Right of Way. Most are fruit-bearing trees. To the extent that these trees are a source of food for locals, this could pose a negative impact on the right to food. The EIA did not have any discussion on the impacts of the shift in land use on agricultural productivity and local food systems given that the corridor of impact covers irrigable agricultural areas.

RIGHT TO LIVELIHOODS
According to the Land Acquisition and Resettlement Plan, farming is the main occupation in the project area, with 29 % of the affected households working in this field. To the extent that the communities displaced by the project rely on this agricultural land as source of their livelihood, this right may then be impacted. Livelihood restoration is discussed in the Land Acquisition and Resettlement Plan. Livelihood affected due to loss of commercial structures will be supported for their loss of income, on actual basis as supported by tax payment records. In the absence of any supporting documents, loss of income is calculated on the basis of minimum wage rate announced by the government, for a period in which they are unable to attain their routine livelihood earning activities which could be up to 3-6 months maximum, in case of temporary or permanent loss of business/livelihoods. NGO Forum on ADB have questioned whether this livelihood restoration is sufficient to bring local communities back to pre-project levels. Finally, the cutting down of 91,661 trees (noted above) may have impacts on locals’ livelihoods, to the extent that the trees provide a source of income.

LABOR RIGHTS
The entire Right of Way passes through irrigated agricultural land of surrounding rural settlements of Jhang and Khanewal Districts where agriculture is a predominant economic activity.

The NGO Forum on ADB notes that the number of employment loss in the LARP may be underrerported at 21 individuals when the same document has mentioned that “some agro base industries are also established in the area … The major industrial units in the area are sugar mill, ice factory, ginning factory, cold storage, oil expeller, flour mill and poultry feed factories etc.” including fish and poultry farms. There is a need for clarity on the definition of “employment” and subsequently, “employment loss” given the reality that agricultural areas do have workers with informal employment arrangements or seasonal workers that is on wage-based relationship with these agricultural enterprises and thus should be considered as an employment loss.

According to the ADB Environmental and Social Impact Assessment, the project will necessitate siting of construction camps. Bank documents pledge that Rs 15,000 per month will be provided for drinking water and latrines will be provided for 24 months. The Bank also states that there will be a training program for the workers who reside in the construction camps, as well as formulation of a safety and security plan. Impacts from the the siting of construction facilities may include a loss of plantation and vegetation, permanent physical and visual impact on the area, siltation and pollution risks if construction materials are extracted from the River Chenab bed.

RIGHT TO A HEALTHY ENVIRONMENT
The ADB Environmental and Social Impact Assessment states that risks from construction include air and noise pollution from machinery, solid waste generation, oil spillages, which could result in soil and groundwater contamination, and surface water body contamination. In addition, the Bank notes that siting of construction camps may result in a loss of plantation and vegetation, siltation and pollution risks, if materials are extracted from the River Chenab bed. NGO Forum on ADB, among other civil society groups, has questioned the scope and methodology of EIA, as it largely limited to the impacts of the construction and did not mention the long-term impacts of the tree cutting; nor was there a cumulative assessment of impacts on ecosystems. The Environmental Management Plan is intended to provide a framework to mitigate these impacts. The Plan, however, is based on an EIA that lacked a lens on the impacts of shifts in land use and extensive cutting of trees on ecosystems.

RIGHT TO CULTURE
The Land Acquisition and Resettlement Plan notes that two mosques and one prayer place patio with small wall will be affected by the project and will be relocated, thereby potentially impacting the right to culture.

RIGHTS OF INDIGENOUS PEOPLES
Although Bank documents indicate that “the screening of project confirmed that no IP groups were found existing in the project areas,” civil society groups, such as NGO Forum on ADB, have raised questions as to the accuracy of this scoping, given Pakistan’s non-recognition of indigenous peoples. Pakistan has ratified ILO Convention 107 on Indigenous and Tribal peoples and voted for the adoption of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), which recognizes the historical injustices indigenous peoples have experienced and continue to experience. Specific rights in UNDRIP include the right to self-determination; free, prior and informed consent (FPIC); and the right to land and natural resources. However, to date, Pakistan does not have any domestic legislation or policies on indigenous peoples. As such, careful attention to this matter should be exercised in project implementation.

Investment Description

Bank financing: Asian Infrastructure Investment Bank. This project will also be co-financed by the Asian Development Bank (ADB) and the UK Department for International Development (DFID). The ADB will be the lead co-financier and will administer the project on behalf of the other co-financiers. The National Highway Authority of Pakistan will be the executing agency.

Borrower: Islamic Republic of Pakistan
Amount of bank loan or investment: $100 million USD (AIIB) and $100 million USD (ADB), $34 million USD (Department for International Development UK), $39 million USD (Government of Pakistan)
Total project cost: $273 million USD

Contact Information

AIIB Project Team Leader
Wang Hong, Operation Advisor
Team members
Philip Daltrop, Senior Legal Consultant
Anzheng Wei, Financial Analyst
Email contacts not provided

ADB Project Team
Zheng Wu Project Team Leader
Email contacts not provided

CONSULTATIONS
According to ADB’s Environmental and Social Impact Assessment, the consultant’s environmental impact assessment team identified the stakeholders of the proposed Project and discussed the Project with them during the detailed field visits. Their views and concerns were noted and have been incorporated in section 8 of this Report. After reviewing their concerns, mitigation measures have been suggested for giving them the due compensation. Bank documents also state that stakeholders of section-III of M-4 were contacted in December 2015 “during detail project visits.” However, NGO Forum on the ADB, among other groups, has called into question the adequacy of these consultations, noting reports that there was not adequate notice for consultations.

PUBLIC INFORMATION AND DISCLOSURE POLICY OF AIIB
Based on AIIB’s Public Information Interim Policy, the public has the right to access information. Such information on AIIB’s policies and decision-making determines the public’s participation and ultimately on environmental and social sustainability and safeguards. This Policy will be fundamental to understanding and monitoring the AIIB’s impact, as well as carrying our corrective measures when needed. Similar to other multilateral development banks, the AIIB should also provide the possibility of appeal in cases where a requester believes that the AIIB client or the AIIB have improperly restricted access to information.

PROJECT-LEVEL GRIEVANCE MECHANISMS
According to the Land Acquisition and Resettlement Plan, a three-tiered project level grievance mechanism has been provided to deal with issues at the village level, project level, and National Highway Authority HQ level. Specifically: “At village level, the grievances will be recorded and addressed with participation of Displaced Persons committees, and at Project Level, a gender sensitive grievance redress committee has been notified (Office Order No. 1(1)/NHA/EALS/2009/26 Dated 8/10/2009) and functional since date of notification. While at NHA HQ level, the EALS will be responsible to review and address the grievances if not resolved at Project Level.” However, NGO Forum on ADB has called into question the accessibility of the project-level grievance mechanisms, noting that the grievance mechanism contact is about two hours away by transport from affected communities.

Other Related Projects
Bank Documents