Iskenderun Port

The proposed project is the privatization of the Iskenderun Port, Turkey, under a transfer-of-operating-rights scheme for a period of 36 years. Limak Yatırım Enerji Üretim İşletme Hizmetleri ve İnşaat A.Ş. (“Limak”) is the project enterprise in charge of construction and operation of the port.  The project will involve the expansion, modernization and management of services at the port to facilitate increased capacity from approximately 3,000,000 t/year (as dry bulk)[1] to 1,334,000 Twenty –foot Equivalent Units (TEU) – (approximately 23,000,000 tonne/year). The port was owned and operated by the Turkish State Railways (TCDD) since it was brought into service in 1972.

Iskenderun Port is located on the eastern Mediterranean coast of Turkey.  It is connected directly to a railway and is near the Adana-Iskenderun State Highway (D-817) and the Ceyhan-İskenderun Motorway (E-91). The port serves the hinterland that stretches mainly north and eastwards including the towns of Adana, Hatay, Osmaniye, Kahramanmaras, Gaziantep and a group of around 21 organized industrial zones.  The port  also serves as a transshipment route to Syria, Iran and Iraq.

The Port is built on an area of 1,000,672 m2 of which 711,808 m2. (600,000 m2 net area) is used by Limak. An adjacent shipyard and an area for grain silos are used by third parties. The Turkish Grain Board (TMO) and the shipyard operator are existing long term tenants of the port.

The project will involve the demolition and redevelopment of major port structures and the development of container yard areas.  Upon completion of the rehabilitation will provide 850 m total length with a 450 m diameter turning circle or vessels in the inner port area.  In addition, the berth area within the inner port will be increased by 15m since the largest vessel will be 14.5 m. draught. Construction activities will start as soon as the necessary permits are obtained; construction is estimated to take 44 months.

The Port currently operates 10 berths with marine depths between -5 m and -11 m with a total length of 1,699 m (1,425 m utilized berth length). The berths are designed to serve general cargo, dry bulk and roll-on roll-off (Ro/Ro) vessels as well as container ships. The Port can be roughly divided into two areas: the ‘inner port’, which has the berths and the ‘outer port’ that is available for future development and where Limak intends to develop and expand the container terminal operations. Landside areas of the outer port are currently being used by a coal handling facility. The Port has one breakwater with a total length of 1,855 m. The port concession area occupies approximately 375,000 m2of open storage and 19,000 m2of covered storage. In addition, there is a 60,000 tonne capacity silo for grain storage. As part of the Turkish State Railway (TCDD), Iskenderun port has considerable on‐dock rail facilities and is connected to the national rail network.

Based on the forecasted cargo traffic and ship traffic demand, it is proposed that the container terminal will be developed in four phases:   

• A start‐up phase (Phase 0)
• An initial development phase (Phase 1A)
• A mid‐term development phase (Phase 1B)
• A final build‐out phase (Phase 2)

Start‐up (Phase 0)

This phase will begin with port operation by Limak as soon as the port is handed to Limak. The purpose of this arrangement is to allow Limak to begin container operations even before starting the construction and before the new infrastructure in place. Four mobile harbor cranes (MHC) at berths 3 and 8 will deployed to work on mostly feeders and smaller vessels. Berth 3 will have a 200m operating length and berth 8 will have about 250m of operating length. The estimated yard capacity is 7,171 TEU slots and the annual throughput capacity is 230,000 TEU

Initial Development (Phase 1A)

The first development phase of the container terminal will complete a 550m berth with a 450m diameter turning circle in the inner port. The berth depth at this phase does not need to be deeper than 15m since the largest vessel has 14.5 m drought. The container yard stacking system utilizes berths 3&4 which can accommodate a 6,000 TEU vessel and smaller ones. Both the import and export stacks are 7m wide and 6mhigh. The estimated yard capacity is 20,196 TEU slots and the annual throughput capacity is 600,000 TEU.  The terminal administration building and terminal maintenance and repair building are to the south of berths 3 & 4.

Mid‐Term Development (Phase 1B)

The mid‐term development phase of the container terminal has an 850m total berth length with a 450m diameter turning circle in the inner port. In this phase, the area south of berths 3 & 4 will be developed to expand the container terminal to berth 1. The berth depth at this phase does not need to be deeper than 15m since the largest vessel has 14.5 m draught. Both the import and export stacks are 7m. wide and 6m high. The estimated yard capacity is 42,071 TEU slots and the annual throughput capacity is 1,334,000 TEU.

Build out (Phase 2)

In this phase, a new container terminal will be developed in the outer port, with a 900m berth, a 29 ha container yard and a 6.7 ha intermodal yard (IY), in addition to the existing rail yard; no rehabilitation is planned for the rail yard. The capacity of the outer port terminal is about 1.0 million TEU, bringing the total storage capacity of the container terminal to approximately 87,288 TEU slots and annual throughput to 2,370,000 TEU. The outer port terminal can berth two mainline 300m vessels (4‐6,000 TEU) and one 250m vessel (4,000 TEU). The Intermodal Yard (IY) can handle about 340,000 TEU with 4 working tracks and 4 storage tracks.

B.  Environmental and Social Categorization

The above described project of privatization and rehabilitation of the Iskenderun Port has been classified as a Category B under MIGA’s Environmental and Social Review procedures. This is based on the nature of the project’s predicted adverse impacts, which are relatively few in number, generally restricted to a relatively small geographic area and readily addressed via well understood mitigation measures. Key potential adverse impacts identified by scoping studies and the EIA are related to:

• marine water quality during construction and dredging, and during operation due to increased ship traffic;
• increase in road traffic during construction and operation;
• increase ship traffic during operation;
• noise, dust, light and visual intrusion during both construction and operation; 
• occupational health and safety;
• community health and safety mainly due to increased traffic;
• solid and hazardous wastes, wastewater and surface runoff;
• likely loss of livelihood/fishing grounds of fisherman due to increased anchoring;
• population influx due to increased port activities.

[1] If we consider all existing equipment and their total capacity, it is bigger than this number. But many of the equipment are not working properly and so the calculated usable capacity is approximately 3,000,000 t/year)

While all Performance Standards are applicable to this investment, our current information indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

• PS 1: Social & Environmental Assessment and Management Systems
• PS 2: Labor & Working Conditions
• PS 3: Pollution Prevention & Abatement
• PS 4: Community Health, Safety & Security
• PS 6: Biodiversity Conservation & Sustainable Natural Resource Management

PS5 (Land Acquisition & Involuntary Resettlement) does not apply as the project does not require additional land. PS 7 (Indigenous People) is not relevant because no indigenous peoples were found to inhabit the project area.  PS 8 (Cultural Heritage) may not apply to the project as there are no known resources of importance for archaeology, history, landscape value of other cultural significance in the vicinity of the Port. The nearest protected site is Hatay İskenderun Arsuz Yaban Hayatı Geliştirme Sahası, 35 km south-west to the Port.  Encountering any artifacts during redevelopment works is considered unlikely to occur given the past development of the site and lack of extension beyond the existing Port boundary. However the project Environmental and Social Management Plan (ESMP) will include “Chance Find” procedures, and the project enterprise (Limak) is committed to applying a “chance find” procedures consistent with PS 8.

MIGA has reviewed the following documents:

• ""Port of Iskenderun, Environmental and Social Due Diligence Assessment Report (ESAR) Draft""  October 2011 and revised in November 2011, prepared by ERM
• ""Iskenderun Port Expansion Project Public Consultation and Disclosure Plan (PCDP)  Draft""  October 2011, prepared by ELC Group.
• ""Baseline Study Framework""  October 2011, prepared by ELC Group.
• ""Environment and Social Impact Assessment (ESIA) Scoping Report Draft"" October 2011, prepared by ELC.
• ""Çevre Etki Raporu (ÇED)"" - Environmental Impact Assessment (EIA) prepared in accordance with the Turkish Environmental Impact Assessment Regulation.  October, 2011, prepared by ENÇEV
• ""Risk Degerlendirmesi ve Acil Mudahele Plani"" (Augustos 2010) prepared by Cinar Muhendislik.  Risk Assessment and Emergency Plan (August 2010).
• ""Iskenderun Port Master Plan""  September 2011 prepared by Moffatt & Nichol

MIGA’s due diligence also involved a site visit on October 20 and 21, 2011, and meetings with fishermen cooperation, community representative of the settlement (Çay Mahellesi) adjacent to the port, local authority and other stakeholders, including chamber of maritime commerce,  LIMAK environment and social staff and consultants

PS1 Social and Environmental Assessment and Management Systems

In accordance with the Turkish Environmental Impact Assessment Regulation (July 2008), an EIA study was prepared and submitted to the Ministry of Environment and Urbanization in October 2011 for approval. As Limak is seeking finance from multinational institutions and lenders who subscribe to Equator Principles an Environmental and Social Impact Assessment (ESIA) is being prepared in accordance with the Equator Principles and Performance Standards of IFC/MIGA. The ESIA process already started and the ESIA planned to be finalized in February 2012. A scoping study was undertaken in September 2011. 

An environmental, social, health and safety management system is not yet in place for the port. Limak commissioned a consulting and engineering group to undertake environmental and social due diligence of the project in accordance with IFC/MIGA Performance Standards on Social and Environmental Sustainability (""Performance Standards"") and the financial industry benchmark ""Equator Principles"". Another consultancy group was also engaged to conduct an environmental and social audit on behalf of UniCredit Bank AG. Environmental and Social Due Diligence Report (""ESAR"")/(draft audit) was prepared by the lender’s consultant incorporating an abbreviated draft Environmental and Social Management Plan (""ESMP""). The draft ESMP identified the gaps in certain key areas and measures to mitigate legacy issues and future impacts, as well as proposals for future stakeholder engagement were outlined. These documents reflect the requirements of Turkish Law, the Equator Principles and MIGA’s Performance Standards. 

The port subscribes to International Ship and Port Facility Security (ISPS) code, but not to International Maritime Organization (IMO) code.  Based on the audit/ESAR findings, the Turkish EIA and recommendations of the draft/abbreviated ESMP, Limak will develop a comprehensive Environmental, Social, Health and Safety Management System (ESHSMS).  It will consist of action plans to address issues identified by the ESAR and ESIA and in accordance with the principles of ISO 14001 and ISO 18001.  Action plans will assess issues and potential impacts, spell out practical mitigation measures and indicate what resources will be made available for implementing these measures within reasonable timeframes.  The main components of ESHMS will include, but not necessarily limited to: (i) occupational health and safety management, including workplace risk assessment, workers’ accommodation and workers' grievance mechanism; contractors' management and retrenchment procedure; (ii) emergency response plan (including fire safety); (iii) traffic management plan; (iv) public consultation and disclosure plan, including grievance mechanism; (v) domestic and hazardous waste management; (vi) water management; (viii) water discharge, including surface run-off; (ix) storing and handling bulk; (x) dust control; (xi) monitoring and reporting; (xii) organizational capacity and training.  The action plans will take into account technical and financial feasibility and be consistent with Turkish Law, MIGA’s Performance Standards and the World Bank Group (WBG) Environmental Health and Safety (EHS) Guidelines.

Environmental and social management capacity and organizational structure: Limak is experienced in construction, management of manufacturing and industrial complexes and airports in Turkey and abroad, but Iskenderun will be the first sea port that Limak will be managing.  At the time of lender’s consultant and MIGA assessments Limak had not taken the control of the port and the team consisted of four members, including environment and social experts. Limak will be required to establish organizational capacity to implement the requirements of the ESHSMS consistent with MIGA’s PSs and WBG EHS and sector specific guidelines.

PS2 Labor and Working Conditions

Currently TCDD employs 193 blue-collar workers (including operators, shipmen, technical and general workers), and 121 white-collar workers at the port. All port workers are members of the National Port and Land Stevedores Union of Turkey (Liman-Is). 

Under the concession agreement, the operation of the port will be transferred to Limak without its current workforce or any obligations regarding future employment. TCDD is retaining all responsibility and has offered current workers three options following port transfer: retirement, redundancy or redeployment to one of TCDD’s other operating ports at Izmir, Derince or Haydarpasa. 

TCDD’s current port manager reports that up to 70% of the current blue-collar workers, having fulfilled the required 25 years of service, elected for retirement. Retirees will be entitled to a certain % of their basic salary, based on time worked and rank.  All port workers were informed by TCDD about the privatization and asked to express their preferences.   At the time of MIGA’s site visit, the preference survey had not been concluded. The Ports of Izmir and Derince are themselves in the process of privatization and information indicates that their privatization may be completed in the next 25 years.  The Port of Haydarpasa is expected to be closed in 2014 and therefore is not considered a viable option by the workers unless they are close to mandatory retirement age.  The redeployed workers are entitled to relocation allowance based on government policy which is based on distance and includes additional benefits for family relocation. Liman-Is (Union of Port Workers) has concerns and complaints.  , It filed a complaint on behalf of port workers to the Turkish courts as they did in privatization of other ports, including the port of Bandirma.

ESAR prepared by lender’s consultant identified a number of health and safety risks for workers’ including: (i) trip hazards due to materials being stored unsafely; (ii) lack of enforcement of standard use of PPE; (iii) historical contamination which may be a chemical hazard; (iv) lack of signage highlighting HSE risks. Since January 2011 three minor incidents had been recorded.  TCDD’s current port manager also reported very few incidents.

Limak does not have an Iskenderun Port site specific Human Resources (HR) Policy, but Limak Holding has an HR Policy which sets out a requirement for all Limak projects to develop an HR policy and system at the start of the project.  For the port’s construction and operation Limak will develop HR procedures which include information regarding rights under national labor and employment laws, ability to form workers association and non-discrimination consistent with PS2. A copy of Limak’s Human Resources Policy/Procedures for the port will be submitted to MIGA. Limak will ensure that all contractors’ workers will also comply with the national labor laws and applicable requirements of PS2.

Currently occupational health and safety for blue collar workers at the port is managed through conditions within the Collective Labor Agreement between Liman-Is and TCDD.  Limak will develop and implement an Occupational Health and Safety Management System (OHSMS) as part of the ESHMS, consistent with PS2 and industry best practices.

The Port is located in 1st Level Earthquake Zone in Turkey Earthquake Zones Map of Ministry of Public Works and Settlement.  All of the buildings in the Port area will comply with the requirements of regulation on structures to be constructed in earthquake zones. An emergency response plan will be designed considering this high risk factor of the region.

PS 3 Pollution Prevention and Abatement

The ESAR and the ESIA scoping report identified a number of legacy pollution and compliance issues that contravene Turkish Law, the Equator Principles, Performance Standards, WBG’s EHS Guidelines and international best practice.  These issues indicate potential risks to human health and the environment (as summarized below) if not properly addressed.

Air emissions: The port currently does not hold an air emission permit.  The Turkey Industrial Air Emission Control Regulation requires a permit for facilities handling more that 200 tonnes of bulk cargo a day.  Dust and noise from vehicle and material movements have the potential impact on adjacent residential areas.  The existing coal handling facilities are mostly uncovered.  It is reported that coal handling will be phased out within 1 or 2 years after handover.  An ESHSMS will include regular monitoring of dust and noise, and reduction measures will be provided where levels reach or exceed local legal limits and/or World Bank Group EHS Guideline limits. GHG emissions during construction and operation phases are likely to be limited given the nature and scale of the project.

Wastewater: The port currently discharges untreated sanitary effluent directly to the sea.  This is not in compliance with the Turkish Water Pollution Control Regulation and good industry practice.  Limak Holdings existing construction environmental policy includes requirements to adhere to legal compliance requirements.  Also the port ESHMS to be developed will include mitigation measures, i.e. either proper treatment of sanitary effluent on site, or discharging to the municipal sewer system.  Bilge water is currently treated by an existing plant on site to separate oils prior to discharge to the sea.  But upgrading of the bilge water treatment plant is necessary

Surface runoff: All surface runoff water is discharged directly to the sea without treatment.  Surface runoff water may become contaminated by bulk cargo residues and oil.  This is not in compliance with the Turkish Water Pollution Control Regulations or good industry practice.  The port EHSMS to be developed will include measures, including oil and water separators and/or sediment traps prior to discharge.

Hazardous material/waste, including oils and batteries are disposed off-site by third party contractors.  Waste oil separated from treated bilge water is stored in a 36m3 above ground storage tank (AST) as well as associated above and underground pipe work and tanks.  The condition of the plant and immediate ground surface is poor.  Discharge of oils to groundwater and soil is likely.  This is also not in compliance with the Turkish Soil Pollution Control Regulation. Some bilge oils are sent to a cement kiln for incineration as fuel.  There is no other existing measure for waste recovery or re-use. Some building insulation and roof materials may contain asbestos.  A survey should be conducted and any asbestos containing materials should be disposed according to the Hazardous Waste Control Regulation.

Contaminated soil and groundwater: there are soil and groundwater contamination relating to AST and underground storage tank (UST) (oil and fuels) and processing bilge waters that needs to be addressed.  

Limak is committed to conduct the rehabilitation/construction and to operate the port in a manner consistent with applicable Turkish laws, MIGA’s Performance Standards, WBG EHS Guidelines and international best practice.  It is expected that environmental management will be improved at the port under Limak’s management.

PS4. Community Health, Safety & Security

The port is located within a densely populated urban area of Iskenderun, and is adjacent to residential areas. The identified impacts are related to dust, asbestos, vehicular and vessel traffic, infrastructure and equipment risks, and security personnel. 

Dust: Coal dust from current port activities is a risk to community health.  No dust monitoring has been undertaken at the site or in the vicinity. However, as it is explained in earlier sections of this document coal handling activities will be abandoned within 1 or 2 years after the handover to Limak. Until then, measures, including wind barriers, covering the top of carriers etc. should be considered.

Asbestos: A number of buildings which potentially contain asbestos, will be demolished.  Limak will perform asbestos surveys where areas of potential concerns were identified, and will dispose these materials according to applicable regulations and measures.

Vehicle and Vessel Traffic: Increased truck movements during construction and operation and increased vessel traffic during the operation phase will increase risks to communities, including residents and fishermen.  Preparation and implementation of road and sea traffic plans require close collaboration with Iskenderun Municipality and other authorities and stakeholders – including residents and fishermen. Using available rail networks can be considered among mitigation measures to reduce truck traffic and alleviate demand for large gate facilities.

Infrastructure, Material and Equipment Safety: The maintenance and storage of all equipment and infrastructure at the port such as cranes, winches etc. are under the responsibility of TCDD as the current operator. Limak will design, construct, operate and decommission the structural elements or components of the project in accordance with good international industry practice, and will give particular consideration to potential exposure to natural hazards, especially where the structural elements are accessible to members of the affected community or where their failure could result in injury to the community.

The ISPS code defines what chemicals can be handled by the port.  The port is not permitted to store any hazardous chemicals and chemicals (such as phosphoric acid and sulphuric acid) are not to be transferred between trucks and ships. Limak will need to obtain an extended ISPS license as the current license expired in July 2010.  The port has an Emergency Preparedness Plan (EPP)-August 2008, which  addresses issues including ship collusion, fire, other types of accidents and material safety. This plan will be reviewed and updated as necessary by Limak. 

Security personnel: The port site is not open to the public. Limak plans to engage a sub-contractor to provide land-side security with armed security personnel. Limak needs to apply to the Directorate of Security – Ministry of Internal Affairs to acquire permit for their security personnel to carry firearms.  The number of required security personnel is defined by the state police. Under Turkish Law, private security must also receive training from the Directorate of Security. 

The port’s security arrangements will also comply with the ISPS Code. Under ISPS, seamen can come onshore controlled by sea police, customs, and port security which are regulated by local laws. These security teams are independent from the port operator though they work in a coordinated way.  There is a small military port (for sea police) adjacent to the Port of Iskenderun. No significant issues are expected and present site management has reported no incidences of security breaches.  Because containers may provide opportunities for theft, sea police and coastal defense teams patrol the general area, but they are not responsible for sea-side security.  Both the sea police and customs monitor the number of people on ships entering and leaving.  Although there have been no complaints from vessel operators about the behavior of the police and/or customs officials, a grievance mechanism will be established to allow the affected community to express concerns about the security arrangements and acts of security personnel. 

PS6 Biodiversity Conservation and Sustainable Natural Resource Management

PS6 is considered unlikely to be of direct application as current information indicates there are no habitats of importance for biodiversity or of economic significance in the vicinity of the Port, nevertheless the sustainable use of the marine environment is at risk from pollution and disturbance associated with the Port’s current and future activities. Pollution prevention and abatement measures as per PS3 will be important in ensuring that marine resources are protected.

In accordance with the Turkish Environmental Impact Assessment Regulation (July 2008), an EIA study was prepared and submitted to the Ministry of Environment and Urbanization in October 2011 for approval.  Limak has not taken the port operation yet.  It also needs to apply to the Hatay Directorate of Environment and Forestry to get all necessary permits for operation.  

In accordance with the Turkish EIA regulation, a public consultation meeting was held on June 24, 2011 at the Iskenderun Municipality Meeting hall. Although the meeting was advertised in local and national news papers, there were no attendees from the public.  Due to absence of public at the meeting, a household survey (49 households) was conducted at the vicinity of the port.  Survey results indicate that the majority of the 49 households are aware of the port project, a few are concerned because of potential pollution, and a few raised concerns due to potential security matters – e.g. foreign seaman coming to the town. Some others believe investments and employment opportunities are needed in the area. During MIGA’s mission visit a meeting with muhtar (elected mahalle/neighborhood representative) of the residential area adjacent to the port and a resident was held.  Both clearly expressed their strong support for the port rehabilitation and privatization project due to its strong development impacts – in the form of direct employment and supply chain.  They did not express any environmental concerns.  The head of the fishermen cooperation also expressed support for the port privatization and explained that the port is not likely to affect their fishing grounds as long as a proper anchoring plan is prepared and implemented. A public consultation and disclosure plan was drafted by Limak as per requirements of Performance Standards, and presented to MIGA. The plan will be finalized as part of the ESMP.  Once the ESIA draft is complete, Limak will disclose it (together with non-technical summary – (NTS) in Turkish at the project website and as hard copy at the municipality and the port.  NTS will also be sent to the identified stakeholders.  A public meeting will be organized and comments will be taken into account in finalizing the ESIA.

Following documents are available electronically as PDF attachments to this ESRS at www.MIGA.org.  

• ""Port of Iskenderun, Environmental and Social Due Diligence Assessment Report (ESAR)– Draft"" November 2011 prepared by ERM
• ""Environment and Social Impact Assessment (ESIA) Scoping Report Draft"" October 2011, prepared by ELC.
• ""Çevre Etki Raporu (ÇED)"" - Environmental Impact Assessment (EIA) prepared in accordance with the Turkish Environmental Impact Assessment Regulation.  October, 2011, prepared by ENÇEV

Additional supporting documents are voluminous and may be attained by contacting Deniz Baharoglu at dbaharoglu@worldbank.org