YZG Sağlık Yatırım A.Ş.

Project Description

Meridiam Eastern Europe SARL Luxembourg (Meridiam) has asked the Multilateral Investment Guarantee Agency (MIGA) to provide political risk insurance for its investment in the Yozgat Education and Research Hospital (the Project). The Yozgat Project is part of the Turkish Health Public-Private Partnership Program (PPP Program) developed by the Turkish Ministry of Health (MoH) to increase capacity of public hospital infrastructure in the country. In the specific context of Yozgat, the Project could increase the capacity of health services by approximately 40% for the region. MIGA has previously supported the PPP Program by issuing a guarantee to Meridiam for its investment in the Adana Integrated Health Campus.

The Project site is a vacant land plot in the Yozgat province, in Central Anatolia, Turkey situated within an area designated as a “medical infrastructure area” per the Municipality of Yozgat Zoning Plan. The site was previously owned by the Undersecretary of Treasury and later allocated to the MoH for the construction of health care services. The total Project footprint is 128,000 m2 and consists of the construction of a hospital with 475 bed capacity occupying 82,600 m², a 41,148 m² car park area, and technical area occupying 4,370 m². Relevant commercial activities could be developed within the hospital campus.

The Project is mostly surrounded by green field. The State Hydraulic Works office is located to the south of the Project site and the General Directorate of Land Registry and Cadastre is located to the west. The nearest residential area is located approximately 500 m from the site.

The Project sponsors are a consortium of Meridiam and three Turkish companies, Ronesans Holding, Sila Group and Sam Yapi Sanayi ve Ltd. Sti. Under the Project Agreements, YZG Sağlık Yatırım A.Ş. (YZG), a special purpose vehicle (SPV) created for the Project and jointly owned by Meridiam, Ronesans, Sila and Sam, will be the Project enterprise and will be responsible for the construction, maintenance, and management of the facilities and for providing medical support services. The MoH will deliver medical care services once the hospital becomes operational. When the Project starts to operate at full capacity, it will have 184 specialist physicians, physician associates, practicing physicians and 437 auxiliary staff. At the end of the Project’s operating 25-year period, the facilities will be transferred to the MoH.

Environmental and Social Categorization 

The Project is a Category B under MIGA’s Policy on Environmental and Social Sustainability (2013) because the potential environmental and social impacts are limited, site-specific, largely reversible, and can be readily addressed through mitigation measures. Key environmental and social issues during construction include effects on air and water quality, soil and vegetation removal, increased noise levels and vibration, solid waste management and incidents related to occupational and community health and safety.  During operation, key environmental and social impacts include generation of general solid and liquid waste, generation of hazardous waste (including medical waste and residual pharmaceutical waste), air emissions, and occupational and community health, safety and security.

While all Performance Standards (PS) will be applied to the Project, based on current information, it is expected that the Project will be managed in accordance to the following PSs:

• PS1: Assessment and Management of Environmental and Social Risks and Impacts
• PS2: Labor and Working Conditions
• PS3: Resource Efficiency and Pollution Prevention
• PS4: Community Health, Safety, and Security

The Project site is owned by the Treasury and allocated to the Ministry of Health for the Project. As the site is vacant, no physical or economic resettlement is required, and therefore PS5 (Land acquisition and Involuntary Resettlement) does not apply to this investment. 

The development of the Project is not expected to have adverse impacts on biodiversity and PS 6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources) is not applicable. Indigenous communities are not present in the area, thus PS7 (Indigenous Peoples) is not applicable. While impacts on cultural heritage are not anticipated, as part of the ESMS, MIGA will require a chance finds procedure in accordance with PS8 (Cultural Heritage).

In addition, the following World Bank Group Environmental, Health, and Safety (EHS) Guidelines are applicable to the Project:

• World Bank Group General EHS Guidelines
• World Bank Group EHS Guidelines for Health Care Facilities

MIGA’s review consisted of appraising environmental and social information submitted by Meridiam. The following documents have been reviewed by MIGA:

• Environmental and Social Impact Assessment (ESIA) – January 2015 prepared by Golder Associates
• Environmental and Social Management Plan (ESMP), including a separate Waste Management Plan (WMP) – January 2015 prepared by Golder Associates
• Environmental and Social Action Plan (ESAP) – January 2015 prepared by Golder Associates
• Stakeholder Engagement Plan (SEP) – January 2015 prepared by Golder Associates

In addition to review of the above documents, MIGA’s environmental and social specialist will visit the Project site in early March 2015. The visit will include walk-over survey of the Project site and meetings with representatives of the Project sponsors, local government officials and local communities. If any material differences between the information presented in this ESRS and the conditions on the ground are identified, then this ESRS will be updated and re-disclosed.

PS1: Assessment and Management of Environmental and Social Risks and Impacts

Environmental and Social Assessment:

For this specific Project, an Environmental and Social Impact Assessment (ESIA) and Environmental Management Plan (ESMP) were completed.  According to Turkey’s EIA Regulation the Project is ESIA-exempt. Nonetheless, YZG shareholders retained an independent environmental consulting firm (Golder Associates) to undertake the environmental and social works and prepare the documents in line with IFC Performance Standards and WBG Environmental and Social (EHS) Guidelines. The documentation presents baseline information, potential impacts and risks, and mitigation measures for the Project. The ESMP provides a framework for developing required management and monitoring plans per the risks identified for both construction and operations. 

Management Program:

YZG will be required to develop and administer an Environmental and Social Management System (ESMS) following the requirements outlined in PS1, the ESMP, and the ESAP. Ronesans Saglik A.S., which will be responsible for construction, has obtained ISO 9001 Quality Management, ISO 14001 Environmental Management and ISO 18001 Occupational Health and Safety Management certifications. A framework ESMP has been developed as part of the ESIA study, which includes description of the mitigation measures during the construction and operation phases, responsible parties for the implementation of the mitigation measures, the timing, monitoring and audit requirements. The ESMP focuses on the avoidance of impacts, and where this is not possible, presents technically and financially feasible and cost-effective mitigation measures to minimize or reduce possible impacts to acceptable levels. Detailed ESMPs will be prepared based on the framework ESMP by the Project for construction and operations.

The ESMS will contain all necessary environmental, social, health and safety (ESHS) management plans to meet MIGA’s requirements, as detailed in the Environmental and Social Action Plan (ESAP).

Organizational Capacity:

The project company was established in 2013 and started establishment of the project team. As per the ESAP, the Company will establish an EHS department and appoint a Director with responsibility and authority for all EHS matters. The corporate EHS department will be provided with sufficient authority and resources to achieve effective and continuous E&S performance. EHS orientation and training programs will be conducted during construction and operational phases of the project.

Emergency Preparedness and Response:

An Emergency Preparedness and Response Plan (EPRP) will be developed and followed throughout construction and operation phases of the project. In the plan, roles and responsibilities, specific emergency response measures for spills, fire, accidents, earthquake and flood will be addressed. Contractors and sub-contractors will also be required to develop and prepare their own site-specific EPRPs in line with the overarching plan. The EPRP may be updated throughout the project lifetime when necessary.

Monitoring and Review

The detailed management plans will include monitoring procedures of key parameters and indicators to evaluate potential adverse social and environmental impacts. ESHS Management responsibilities, monitoring, and reporting requirements will be outlined within the procedures.

MIGA will require annual monitoring reports throughout the guarantee period.

PS2: Labor and Working Conditions

It is anticipated that the Project will create employment opportunities during the construction and operation phases. While construction workforce estimates vary, the expected workforce requirement during operation is estimated at 184 physicians and 437 auxiliary staff. First priority will be given to a local workforce while providing equal employment opportunities to women wherever possible. Benefits to the local economy are expected due to the potential influx of immigrant workers. During construction, worker camps will be located on site to accommodate non-local workforce. On-site worker accommodation will have services and utilities in line with IFC / EBRD’s Guidance on Worker’s Accommodation. Construction workers will be required to attend certified occupational health and safety trainings per local law requirements and will be provided competency-specific technical and awareness training related to their responsibilities on site. During operation, hospital workers will be trained as applicable on procedures developed to manage potential ESHS risks; for example, the safe management of medical and hazardous waste.

Human Resources (HR) Policies and Procedures

Labor practices in Turkey are regulated by the Labor Law No. 4857 of 2003, which standardizes employees’ work-related rights, working conditions and stipulates obligations of employers and employees. Turkey also has an Occupational Health and Safety (OHS) Law and a Regulation of Workers Health and Safety that stipulate detailed criteria for safe working conditions at job sites.  Per the ESAP, the contractor will be required to develop and implement a Human Resources (HR) Policy and HR Management Plan in accordance with Turkish law and PS2 requirements prior to commencing construction of the Project. The HR Management Plan will also contain a staff grievance mechanism applicable to all direct and contracted employees, which will be easily accessible and communicated to all staff.

YZG will be responsible for developing an OHS Management Plan for the construction phase of the Project and for implementing the Plan and providing training for designated staff, performing risk assessments, implementing safe operating procedures, following reporting requirements for accidents, incidents, and safety non-compliances. During operation, it will be required to assign an OHS manager, develop relevant procedures and update the OHS Management Plan accordingly. Employees will be provided training in all relevant environment, social, health and safety management topics, in particular OHS for handling hazardous materials and medical waste for workers and contractors.

Per the ESAP the hospital operator will be required to assess sub-contractor compliance by conducting a compliance study in accordance with relevant items delineated in the ESMP and relevant management plans. The hospital operator will also develop procedures to manage sub-contractors as part of the ESMS to ensure that they are aware of and abide to environmental and social, OHS, and labor policies.

Supply Chain:

The project company, as per the ESAP, will undertake a review the supply chain to identify potential risks and then integrate in its OHS management plan procedures and mitigation measures to address the identified risks.

PS3: Resource Efficiency and Pollution Prevention

The ESMP includes measures to mitigate potential impacts related to emissions and air pollution, noise and vibration levels, wastewater discharge, and solid, medical, and hazardous waste management among others.

Air Emissions

Baseline conditions were established for the study area through field measurements of ambient air quality parameters and air quality assessment studies. The main sources of air pollution during the construction phase were identified as excavation works and movement of vehicles, and engine emissions from exhaust gas from construction equipment and road traffic. Principal pollutants resulting from these sources are dust and particulate matter (PM) from soil excavation and removal; and nitrogen oxides (NOX), sulphur dioxide (SO2) and carbon monoxide (CO) from exhaust of vehicles.  Measurements for PM10 and a dust dispersion modeling study were completed to establish baseline conditions and potential impacts within the study area. Additionally, a vehicle movement analysis was performed to estimate baseline conditions for NOx, SO2, and CO emissions to assess air quality impacts associated with the construction.

According to the ESIA, daily and annual values of PM10 to be generated during the construction phase comply with Turkish limit values. IFC guidelines do not contain instant measurement parameters for PM10, therefore comparison could not be established.   According to the analysis performed in the ESIA calculated emission values for construction vehicles will also stay under the limit values of Turkish Industrial Air Pollution Control Regulation. Hence, significant adverse effects from exhaust gases on air quality are not expected.

Wastewater

Most of Yozgat’s domestic wastewater (90%) is collected and treated biologically in a municipal wastewater treatment plant (WWTP), where ultimately all wastewater produced by the Project will be treated. During the Project construction phase, domestic wastewater will be collected in impermeable septic tanks and disposed of according to Water Pollution Control Regulation (WPCR, Issued on 31.12.2004 in the Official Gazette No: 25687) Article 32. The septic tanks would be emptied periodically by a vacuum truck and disposed of in municipal wastewater sewerage system. Once the hospital becomes operational, wastewater will be generated by diverse processes (including autoclaving, chemical disinfection, and others). Wastewater will be collected separately from storm water and piped to the city sewerage system. Storm water will be stored and used for irrigation purposes.

Wastewater contaminated with radioactive substances will be collected separately and will be monitored prior to being discharged into the sewer system per conditions set under the Regulation on Wastes Generated upon Usage of Radioactive Substances (Official Gazette Date/No02.09.2004/25571). Approval from the municipality will be required prior to discharging radioactive wastewater, per the referenced law. This authorization will be obtained during the licencing process. Per the WBG EHS Guidelines for Health Care facilities the capacity of the municipality to receive this type of wastewater must be confirmed and a wastewater management plan completed.

Emissions during the operation phase are expected to result from exhaust gas from the vehicles operating within the Project site.  Considering baseline conditions, the impact of pollutant and dust emission to the atmosphere is expected to be minimal during all phases of the Project. Monitoring and implementation of mitigation measures for the control of exhaust from all vehicles will be adopted per the ESMP.

Noise and vibration

Impacts from noise and vibration are expected to be moderate during the construction and operation of the hospital. Impacts during construction will be temporary and will result from the operation of construction equipment. Impacts during operation of the hospital will be caused by the emergency generators, helicopter movement and ambulance movements and will have longer lasting effects. Baseline measurements were taken for three representative points at the Project site and indicated that existing day, evening, and nighttime values comply with Turkish regulatory limits and IFC standards. Per the ESAP, a Noise and Vibration Management Plan containing adequate monitoring procedures and mitigation measures (per local legislation and PS3) will be required for the Project as part of the ESMS.

Waste Management and Disposal

The production of solid, hazardous, medical and radioactive wastes is expected throughout different phases of the Project. Thus, a Project-specific Waste Management Plan (WMP) covering site preparation, construction and operation phases of the hospital was completed. The plan identifies all waste streams and some anticipated waste quantities, describes transportation and disposal requirements, and outlines waste management responsibilities. According to the WMP all waste streams will be managed and disposed of in accordance with Turkish regulation and WBG EHS Guidelines for Health Care Facilities. Per the WMP and the ESAP, waste procedures will need to be updated as needed to specify detailed context-specific waste management activities.

Generation of hazardous wastes, including radioactive waste, and medical waste will be a key impact during the operation of the hospital.  The medical waste stream is expected to include infectious and pathologic, pharmaceutical, and sharp waste proceeding from various processes at the hospital. The radioactive waste stream is expected to include residual radionuclides proceeding from unused liquids from radiotherapy or laboratory research; contaminated glassware, packages or absorbent paper; urine and excreta from patients treated or tested with unsealed radionuclides, etc.

All medical and hazardous wastes will be collected, segregated, stored, and transported separately from other wastes based on their physical, biological, chemical characteristics.  Disposal will be done by a third party and will consist of delivering it to the Yozgat Municipality medical waste collection system and/or licensed medical waste sterilization/disposal plants. Specific plants and their distance to the Project site are listed in the WMP, the closest being the Aze Çevre Teknolojileri Sanayi ve Ticaret Anonim Şirketi- Yozgat Medical Waste Sterilization Plant located approximately 15 km from the Project site. Collection and disposal of the medical wastes in the Project will be done in line with Regulation on Medical Wastes Control-Official Gazette Date/No: 22.07.2005/25883. In the case of radioactive wastes, disposal will be done by firms authorized by Turkish Atomic Energy Authorization in accordance with regulation on Secure Transfer of Radioactive Materials and the Regulation on Management of Radioactive Wastes and WBG EHS Guideline for Health Care Facilities.

Estimates for solid waste (non-hazardous) generation assume that the hospital will see approximately 4,000 people (including staff) a daily basis generating approximately 4,600 kg/day of waste. Collection bins will be strategically placed throughout the hospital and will be periodically disposed of through the Yozgat Municipality waste disposal system. Management of solid waste will be done according to the “Regulation for the Control of Solid Waste".

Water and energy use 

Drinking and potable water during the construction and operation phases of the Project will be provided from the Yozgat municipal water system. Additional water requirements for construction activities will be outsourced.

Diesel fuel from construction equipment and vehicles will be the main energy source on site. Diesel will not be stored on site, thus a procedure will be in place to refuel construction equipment on a daily basis. Natural gas and electricity will be supplied from the city grid during the operation of the hospital. Energy and water resources management plans have been recommended as part of the ESMS, in conformance with PS3, to optimize resources use.

The Project could pose risks to the surrounding communities, typically during construction activities caused particularly by increased traffic of heavy machinery; noise and dust levels exacerbated during construction; increased traffic flows; and fire and life safety related issues. Per the ESIA, the traffic load increases are expected to have impacts related to air emissions and traffic safety on the Yozgat town center and the Yukarınohutlu community. The ESMP outlines mitigation measures to reduce potential impacts from construction activities and increased vehicular traffic. A traffic management plan will be develop to control times and routing of vehicles during the construction phase. Community Health and Safety management procedures for construction will also be developed per PS4 requirements and WBG EHS Guidelines as outlined in the ESMP. These procedures will contain traffic safety measures for the residents and mitigation measures for noise, vibration and dust in the community in accordance with national and applicable international standards.

The Project will be designed and constructed in accordance with Turkish Regulation on the Protection of Buildings from Fire (issued on: 19.12.2007, Official Gazette (“OG”) No: 26735). During the operation of the hospital, the Project will also comply with the Regulation on Work Health and Work Safety, Regulation on Health and Safety Signs, and provisions for life and fire safety under PS4 and the WBG EHS Guidelines. Moving forward, a Life and Fire Safety Master Plan will be developed for the Project in accordance to WBG EHS Guidelines will be developed.  A third party audit will be conducted to assess gaps in local life and fire safety requirements and identify acceptable international standards to furnish such gaps. Per WBG EHS Guidelines, the Project will obtain the design and post-construction life and fire safety certifications from a professional acceptable to MIGA.

Per the Earthquake Research Department of the General Directorate of Disaster Affairs the Yozgat Provincial Earthquake Map show the project area in a third-degree earthquake zone (degree one being the most risky whereas degree five being the least). The Hospital will be designed and constructed in line with criteria presented in the ESIA  Geotechnical Survey Report1, Regulation on the Structures to be Constructed in Disaster Areas, and the Regulation on the Buildings to be Constructed on Earthquake Zones" (14.07.2007 O.G. No: 26582).

__________________________

  1 Geotechnical Survey Report (June 2013) by Kilci  Mühendislik  Müşavirlik Proje İnş. Taah.. San. ve Tic. Ltd. Şti

The Project is EIA-exempt according to the Turkish national EIA Regulation. Nonetheless, an ESIA and ESMP were developed per IFC Performance Standards’ requirements to the satisfaction of YZG Sağlık Yatırım A.Ş. (YZG).

Turkish EIA Regulation stipulates that hospitals with a capacity of 500 beds or more are listed in Annex I of EIA Regulation and hospitals with a capacity of 50 – 500 beds are listed in Annex II of the same regulation. The Yozgat Project has a bed capacity of 475 beds and was evaluated as an Annex II Project under the 16th Article of the EIA Regulation. The Project was submitted to the Yozgat Provincial Directorates of MoEU for evaluation and a “No Environmental Impact Assessment Required” decision was given. However, per the Regulation on Permits and Licenses to be Secured Law hospitals and healthcare facilities having capacity higher than 20 beds require an environmental permit for the operation phase, which will be obtained from the Provincial Directorate of Environment and Urbanization.

Public consultation and community engagement activities have taken place and a meeting was held on September 17, 2013 to discuss Project details and create awareness among local stakeholders. No grievances or negative concerns were expressed by attendees during the meeting. In general, local stakeholders are aware of public benefit of the Project.

A Stakeholder Engagement Plan (SEP) has been developed for the Project. The SEP includes a grievance mechanism that provides an open channel for continuous and structured communication between management and the general public. It describes a detailed procedure to place, investigate, respond, and file a given complaint and the expected timeline associated with these actions. Through this process, the public can express individual and collective concerns and issues regarding the construction and operation of the facility. The SEP also outlines communication methods appropriate for each Project phase, including publications through a corporate website and a toll free hotline.

The following documentation is available electronically as PDF attachments to this ESRS at www.MIGA.org. 

• Environmental and Social Impact Assessment: 475 Beds Yozgat Education and Research Hospital, 2015
• Environmental and Social Management Plan: 475 Beds Yozgat Education and Research Hospital, 2015

It is also available for viewing at www.pppyozgathastanesi.com