Contents

Executive summary

1                      Introduction

1.1                   Purpose of the Report

1.2                   Key Contact
Information

2                      Environmental
Status

2.1                   Project Area

2.2                   Environmental
Sensitive Receivers

2.3                   Major Construction
Activities

2.4                   Monitoring Schedule of
The Reporting Period

2.5                   Status of
Environmental Approval Documents

2.6                   Community Liaison
Group Meeting

2.7                   Summary of
non-compliance with the environmental quality performance limits

3                      Environmental
Issues and Actions

3.1                   Previous Environmental
Deficiencies and Follow-up Actions

3.2                   Description of Actions
Taken in Event of Non-Compliance and Deficiency Reporting

3.3                   Implementation Status
on Environmental Protection Requirements

4                      Environmental
Monitoring

5                      Future
Key Issues and Conclusion

5.1                   Key Issues for the
Next Reporting Period

5.2                   Impact Prediction for
the Next Reporting Period

5.3                   Works and Monitoring
Schedule for the Next Reporting Period

5.4                   Conclusion

LIST OF TABLES

Table 1.1        Contact
Information

Table 2.1        Summary
of Works Undertaken During the Reporting Period

Table 2.2        Cumulative
Quantity of Excavated Materials up to 31st March 2008

Table 2.2        Summary
of Environmental Licensing, Notification and Permit Status

Table 3.1        Environmental
Deficiencies (Observations) from Site Inspections during Reporting Period

LIST OF ANNEXES

Annex A      Project
Location

Annex B      Water Quality
Monitoring Stations, Water Quality and Ecological Sensitive Receivers

Annex C     Monitoring Schedule for
the Reporting Period

Annex D     Cumulative Complaints
Statistics

Annex E      Implementation
Programme of Mitigation Measures

Annex F      QA/QC Results of
Laboratory Testing for Suspended Solids

Annex G     Impact Water Quality
Monitoring Results

Annex H      Monitoring
Results and QA/QC Reports of Laboratory Testing for POPs

Annex I       Dolphin
Sighting Records

EXECUTIVE SUMMARY

The construction works for the Permanent Aviation
Fuel Facility resumed on 9th July 2007.  This fifth quarterly Environmental Monitoring and Audit (EM&A)
report presents the EM&A works carried out during the period from 1st January to 31st March 2008 in
accordance with the EM&A Manual.

Breaches of all Action and Limit Levels

Daily exceedance of Action Levels of Turbidity and occasional exceedance of Action Limit Levels of Suspended Solids (SS) were
found during the monitoring period from January to February.  Following the introduction of the
amended Action Level in accordance with the revised Final Baseline Monitoring Report for water quality, no exceedances of Depth-averaged Turbidity and SS were
recorded in March 2008.  One exceedance of Limit Level of Depth-averaged Dissolved Oxygen
was, however, recorded on 19 March 2008.
Following review of data in accordance with the procedures specified in
the EM&A Manual, these exceedances were
considered due to natural fluctuation from the Pearl River
discharge rather than the Project Works.

Complaint Log

No environmental
complaint was received during the reporting period.

Notifications of any Summons
and Successful Prosecutions

No environmental summon or prosecutions was received in this reporting
period.

Reporting Changes

There were no reporting changes in the reporting period.

Future
Key Issues

·
It
should be noted that dredging activities have been suspended from 1st
April onwards and are tentatively scheduled to resume in September 2008; and,

·
Dust
release and suppression.

1
Introduction

Leighton
Contractors (Asia) Limited (LCAL) has
appointed ERM-Hong Kong, Limited (ERM) as the Environmental Team (ET) to
implement the Environmental Monitoring and Audit (EM&A) programme for the
Permanent Aviation Fuel Facility (the Project) during construction works.

The construction works for PAFF commenced in November
2005 based upon the previous EIA (EIAO Register Number AEIAR-062-2002)
conducted and the Environmental Permit EP-139/2002 granted on the 28th
August 2002.  Due to minor changes
to the detailed layout of the site and the site boundary, application for
Variation to the Environmental Permit (VEP) (VEP-133/2004) was submitted to the
Director of Environmental Protection (DEP) for approval.  The variation to the EP (EP-139/2002/A) was
granted by EPD in February 2004.

However, the
decision by EPD to grant the above Environmental Permit was subject to a
Judicial Review.  The Judicial
Review sided in the favour of the DEP, as did the subsequent Judgement from the
Court of Appeal from the High Court for Judicial Review in March 2005.  However, the DEP’s
decision to grant the EP was quashed by the Judgement of the Court of Final
Appeal of July 2006.

The construction
works were stopped following the Judgement of the Court of Final Appeal of July
2006.  As such, in order to continue
with the construction of the project, the project went through the statutory
procedures under the EIAO again with a new design in order to obtain an
environmental permit.  The revised
EIA was submitted in 2007 and the environmental permit (EP-262/2007) was
granted in May 2007. EP-262/2007 has
been amended to EP262/2007/A and
issued by the EPD on 30 November 2007.

It should be
noted that at the time of reporting, a further Variation to the Environmental
Permit has been approved, primarily to allow for dredging works to continue
during March 2008.  As such, EP-262/2007/A has been amended to EP-262/2007/B and issued by the EPD on
27 February 2008.

The construction works and EM&A requirements
resumed on 9th July 2007 following the latest requirements of the
EP-262/2007 and EM&A Manual.
Details regarding the EM&A requirements and changes should refer to
the updated EM&A Manual.  For
the marine works, all piling activities were completed before the previous
suspension of construction works in 2006.

1.1
Purpose of the Report

This is the fifth EM&A Report which summarizes
the monitoring results and audit findings for the EM&A programme during the
reporting period from 1st January
to 31st March 2008.

1.2
Key Contact
Information

Key contact
information of the Project is presented in Table 1.1.

Table 1.1        Contact
Information

Name

Position

Telephone

Facsimile

E-mail

Airport
Authority Hong Kong – Environmental
Permit Holder

Mr Amin Ebrahim

Assistant
General Manager Aviation Logistics

2183 3108

2824 2786

[email-masked]

Contractor
– Leighton (Asia) Construction Limited

Brian Gillon

Project
Director

2823 1111

2529 8784

[email-masked]

Franchisee’s
Site Representative – ECO Aviation Fuel Development Limited

Philip Siu

Franchisee’s
Site Representative

2963 2820

2563 6311

[email-masked]

Environmental
Team – ERM-Hong Kong Limited

Craig Reid

Environmental
Team Leader

2271 3000

2723 5660

[email-masked]

Independent
Environmental Checker – Hyder Consulting Limited

Dr Guiyi Li

Independent
Environmental Checker

2911 2233

2805 5028

[email-masked]

2
Environmental Status

2.1
Project Area

The project area
is in Area 38 of Tuen Mun
and the pipelines are located in Urmston
Road between Tuen Mun Area 38 and Sha Chau.  The site is illustrated in Annex
A.

2.2
Environmental
Sensitive Receivers

No air and noise
sensitive receivers were identified close to the project area.  However, water sensitive receivers and
ecological sensitive receivers were identified in the EIA study, and are shown
in Annex
B.

2.3
Major Construction Activities

A summary of the major works undertaken in this
reporting period is shown in Table 2.1.
Table 2.2 presented the cumulative quantity of excavated
materials up to 31st March 2008.  The cumulative dredging volume during
the reporting period was presented in Figure 2.1.

Table 2.1        Summary
of Works Undertaken During the Reporting Period

Area

Works
undertaken

Tuen Mun Area 38

Tank Farm and Bund Wall Construction

Permanent Drainage Construction

Operational & Fire Services Buildings
Construction

Minor Jetty Works (Non-piling)

Site Investigation

Submarine Pipeline Route

Dredging Operations

Table 2.2        Cumulative
Quantity of Excavated Materials up to 31st March 2008

Type of Excavated Materials

Cumulative Bulk Volume (m3)

Contaminated
Mud

105,974

Uncontaminated
Mud

97,815

2.4
Monitoring Schedule of
The Reporting Period

Daily water quality monitoring during
dredging activities was commenced on 17 December 2007.  A marine archaeological Watching Brief of
two sub-surface anomalies was also implemented from 21st to 28th
February 2008 during the dredging of the surrounding seabed located within the
route of the twin pipelines from the PAFF tank farm at Tuen
Mun Area 38 to Sha Chau.  The monitoring schedule from January to
March 2008 is presented in Annex C.

2.5
Status of
Environmental Approval Documents

A summary of the relevant permits, licences, and/or
notifications on environmental protection for this Project since July 2007 is
presented in Table 2.2.

Table 2.2        Summary
of Environmental Licensing, Notification and Permit Status

Permit/ Licenses/ Notification

Reference

Validity Period

Remarks

Environmental Permit

EP-262/2007/B

Throughout Project

Issued on 27 February 2008 (EP-262/2007/A on 30 November 2007, EP-262/2007 issued on 31 May 2007, EP-139/2002 originally granted on 28
August 2002 and EP-139/2002/A
granted on 24 February 2004 were superseded)

Chemical Waste Producer
Registration

WPN
5111-421-L2174-25

Throughout Project

Issued on 10 November 2005

Notification of Construction
Works under Air Pollution Control (Construction Dust) Regulation

H2104/U1D/5542/DG/DH/PL

Throughout Project

Notification on 6 July 2007

Construction Noise Permit

GW-RW0676-07

21 December 2007 to 19 June 2008

For land-based works including
air compressors, breakers, excavators, wheeled loaders, mobile cranes,
concrete lorry mixers, hand-held pokers, bar benders/cutters, wood saws,
grinders, submarine water pump, lorries with crane, dump trucks, rollers,
ventilation fans and generators

GW-RW0677-07

21 December 2007 to 29 February
2008

For marine dredging operation
including grab dredger, tug boat, split hopper barge and motor sampan

GW-RW0678-07

21 December 2007 to 18 June 2008

For marine jetty works including
concrete pump derrick barges, hand-held grinders, generators, air
compressors, boring machines, water pumps, tug boat, grout mixers and grout
pumps

GW-RW0094-08

1 March to 31 March 2008

For marine dredging operation
including grab dredger, tug boat, split hopper barge and motor sampan

Marine Dumping Permit

EP/MD/08-064

13 December 2007 to 29 February
2008

For Type 1 – Open Sea
Disposal

EP/MD/08-065

13 December 2007 to 12 January
2008

For Type 1d & Type 2 marine
disposal

EP/MD/08-071

13 January 2008 to 12 February
2008

For Type 1d & Type 2 marine
disposal

EP/MD/08-090

3 March to 31 March 2008

For Type 1d & Type 2 marine
disposal

EP/MD/08-091

3 March to 31 March 2008

For Type 1 – Open Sea
Disposal

Wastewater Discharge License

EP760/421/011399/l

15 March 2006 to 31 March
2011

Issued on 15 March 2006

2.6
Community Liaison
Group Meeting

According to the EP requirements, a Community Liaison
Group (CLG) shall be established within three months after commencement of
construction of the Project.  The major
duty of CLG is to advise on and monitor the proper design, construction and
operation of the Project.  The CLG comprises
representatives from Airport Authority, members of Tuen
Mun community and academics.  During the reporting period, the CLG held
a meeting cum site visit on 7 March 2008.

The details of PAFF CLG (including Membership and its
Terms of Reference) and the meeting minutes can be found on the Project website
(http://www.paffhk.com).

2.7
Summary of
non-compliance with the environmental quality performance limits

Summary
of Environmental Non-compliance

Water quality monitoring during dredging activities
recorded daily exceedance of Action Levels of Depth-averaged
Turbidity during January and February with exception of 16 and 24 January, and 11
February.  There was exceedance of the Action Limit Levels of Depth-averaged
Suspended Solids (SS) on 11, 23 and 29 January, and 10, 12, 13 and 24 February.  One exceedance
of Limit Level of Depth-averaged Dissolved Oxygen was found on 19 March
2008.  A description of the actions
taken following these non-compliances is discussed in Section 3.2.

Summary
of Environmental Complaints

No environmental complaint was received during the reporting period.  A statistical summary of environmental
complaints since project commencement is presented in Annex D.

Summary
of Environmental Summons

No summons was
received in this reporting period.
A statistical summary of legal proceeding since project commencement is
presented in Annex D.

3
Environmental Issues and Actions

3.1
Previous Environmental
Deficiencies and Follow-up Actions

As no
environmental complaint was received over the last reporting period, no
follow-up action was required.

Weekly site
inspections were carried out by the ET on 4, 11, 16 and 24 January 2008, 5, 15,
22 and 29 February 2008, and 5, 14, 20 and 28 March 2008.  Overall, the site was in good orderly
manner and no non-compliance was found.
Environmental deficiencies and follow-up actions/mitigation measures
were identified during the inspections and summarised in Table 3.1.

Table 3.1        Environmental
Deficiencies (Observations) from Site Inspections during Reporting Period

Reporting Month

Observation

Follow-up Action

January 2008

Ponding of
rainwater was observed along the hoarding near the site entrance.

Rainwater was
pumped offsite via the temporary drainage system.

The excavated
materials near the site entrance were not watered properly

The excavated
materials were sprayed with water accordingly

Chemical
storage tanks on dredger GD4503 were not labeled
and stored properly

General refuse
was cleared.

February 2008

General refuse
was observed to be full on roadsides without proper containers.

A suitable
waste bin was installed and the refuses were cleared.

Chemical
storage barrels on one dredger were not stored properly

Chemical
storage barrels were clearly labelled and stored properly.

March 2008

Sand piles were
observed to be temporarily stored near the operation building under
construction.

The sand pile
was covered accordingly.

Piles of
general and wood wastes from construction works at the operation building
were piled up on open areas without proper containers.

A suitable
waste bin was installed and the refuses were cleared.

Overall, the site
was in a good orderly manner.  The
ET will keep track on the EM&A programme to ensure compliance of
environmental requirements and the proper implementation of all necessary
mitigation measures.

3.2
Description of Actions
Taken in Event of Non-Compliance and Deficiency Reporting

Daily exceedance of Action Levels of Turbidity and occasional exceedance of Action Limit Levels of Suspended Solids (SS) were
found during the monitoring period from January to February.  Following the introduction of the amended
Action Level in accordance with the revised Final
Baseline Monitoring Report for water quality, no exceedances
of Depth-averaged Turbidity and SS were recorded in March.  One exceedance
of Limit Level of Depth-averaged Dissolved Oxygen was recorded on 19 March.  Details of exceedance
were presented in the monitoring results Annex G.  A description of the actions taken following
identification of a non-compliance are discussed in Section 3.

Although dredging
operations were undertaken during the reporting period, the exceedances were unlikely to be caused by the Project and
were considered to be an isolated case due to the following reasons:

·
Exceedance of Action Level of depth-averaged Turbidity was
found on 17, 21, 22, 31 December (when no dredging was undertaken), whose
values were comparable to those of days with dredging operations

·
Depth-averaged
DO, bottom DO and depth-averaged SS did not show the same trend of exceedance

As per the
requirements of the EM&A Manual, incidents were notified to the Franchisee’s
Site Representative, the Contractor and the Independent Environmental Checker
upon identification of an exceedance.

The temporal and
spatial trend of the results collected during the impact monitoring have
been plotted against those collected during the baseline monitoring and are
discussed below.  Results are
illustrated in Figure G3 in Annex G.

During impact
monitoring on both ebb and flood tides, turbidity and
SS levels at all stations are generally comparable with those levels recorded
during the baseline monitoring.  It
is more likely that the waters upstream of the works site are influenced by
other factors, such as natural fluctuations of turbidity and SS observed in the
Pearl River Estuary.

It is also
important to note that the construction works were not carried out continuously
over the weeks during the impact monitoring period.  On some occasions, there were no marine
works undertaken on site during the monitoring period.

3.2.1
Follow-up
Action following Non-Compliance

In accordance
with the required procedures specified in the EM&A Manual to be taken following the trigger of an Action
Level, discussions between the Environmental Team (ET) and the Independent
Environmental Checker (IEC) resulted in an amendment made to the Action Level
for the monitoring of Turbidity for the Project, such that the Action Level of
Turbidity be amended to follow the same principle as that currently applied to
DO and SS.  This amendment was
introduced on 1 March 2008, following the submission of the revised Final Baseline Monitoring Report for
water quality to the EPD on 20 February 2008 and later under the EIAO register
on 29 February 2008.  As such, the
compliance of depth-averaged Turbidity from that date onwards has been checked
against the revised Action Levels.

3.3
Implementation Status
on Environmental Protection Requirements

The
implementation status of environmental mitigation measures and requirements as
stated in the EIA Report, Environmental Permits and EM&A Manual during the
reporting period is summarized in Annex
E.

4
Environmental Monitoring

4.1.1
Air
and Noise

Air and Noise
monitoring was not required for the project.

4.1.2
Water
Quality

In accordance to
the EM&A Manual, during dredging activities, water quality monitoring
commenced on 17 December 2007.  QA/QC reports for Suspended Solids
testing are presented in Annex F.  Monitoring data and graphical
presentations of the results are included in Annex G.

Results of the monitoring demonstrated that all
measured dissolved oxygen levels of all Impact Stations were compliant with the
Action and Limit (AL) Levels specified in the EM&A Manual with the exception of 19th March 2008.  Concentrations of Suspended Solids (SS) were
generally below AL Levels, however, exceedances were
noted for 11, 23 and 29 January, and 10, 12, 13 and 24 February.  Turbidity levels were, however, above
Action Levels on a daily basis on January and February with exception of 16 and
24 January, and 11 February.  A
review of the above exceedances concluded that these were
not attributable to Project works and were likely due to natural variation (see
Section 3.2 for further details).

Biweekly monitoring of water samples was conducted for POPs analysis.
At the time of this report, results were available for 23 January, 6
February, 20 February and 10 March.
All POPs parameters (ie
total PCBs, total DDTs and total PAHs)
were below detection limits.
Monitoring results and QA/QC reports for POPs
testing are presented in Annex H.

The remaining
results of March’s monitoring will be presented in the next Quarterly Monitoring Report once they
become available.

4.1.3
Waste
Management

The Contractor’s
revised Waste Management Plan (Revision 4) (WMP) was submitted to EPD on 20th
September 2007.

4.1.4
Cultural
Heritage

In accordance with the EM&A Manual, a marine archaeological Watching Brief of two
sub-surface anomalies was implemented from 21st to 28th
February 2008 during the dredging of the surrounding seabed located within the
route of the twin pipelines from the PAFF tank farm at Tuen
Mun Area 38 to Sha Chau.

The watching
process consisted of monitoring the dredging of sediments to the recorded
sub-surface depths of the anomalies, followed by a diver inspection of the
uncovered seabed within the trench.

Material found in
the location of the two anomalies consisted of urban waste, trash and recently
quarried granite and feldspar rocks.
No archaeological sites or relics were found and it is considered by the
licensed Marine Archaeologist that the anomalies have no cultural heritage
significance.  No additional
mitigation measures were thus required to be implemented by the PAFF project in
regard to the anomalies SS1 and SS2.

The details and
findings of this watching process will be presented in the Watching Brief Report and submitted separately to EPD and AMO for
review.

4.1.5
Landscape
and Visual

According to the
EIA report and EM&A Manual, mitigation measures and site inspection are
required during the landscaping/planting works.  The berm/landscaping
bund was dominated by vegetation which was grown during the project suspension
period.  The transplanted trees were
in good and healthy conditions.

The weekly site
inspections included audits on landscape and visual issues to ensure that the
site was in orderly acceptable manner.

4.1.6
Land
Contamination, Hazard to Life and Fuel Spill Risk

According to the
EIA report and EM&A Manual, mitigation measures and design phase audit are
required to minimise the risk of fuel spill and hazards. The Contractor will
submit the updated design audit plan according to the EP requirements.

Pursuant to Condition 3.5 of the EP, the Contractor
submitted two design drawings entitled Fencing and Security Wall Layout Plan
(PAFF/LC/02/DWG/C/0176 Revision A) and Fencing and Security Wall Section
(PAFF/LC/02/DWG/C/0177 Revision A) to the ET for certification on 30th
July 2007.  The ET reviewed the
drawings and offered comment on the design of the security walls and bund walls,
taking into account of Condition 3.5a of the EP, to the Contractor on 31st
August 2007.  Response to comment (RTC)
from the Contractor was received by the ET on 19th September 2007.  A review of the RTC is now in progress.

Weekly site
inspection covered the waste management aspects which included measures to
prevent land contamination by chemical wastes.

4.1.7
Ecology

Dolphin Visual Monitoring

In accordance to
EM&A Manual, dolphin monitoring has been undertaken during dredging
activities since 17 December 2007.

During the
reporting period, 23 dolphin sightings were recorded.  Appropriate action was taken in
accordance with the EM&A Manual.  The sighting locations and field records
are presented in Annex I.

4.1.8
EM&A
Manual

The EM&A
Manual for the Project has been updated by the ET to include the detailed
arrangements of setting up a Community Liaison Group, carrying out design
audit, and monitoring of Persistent Organic Pollutants during construction of
the Project.  The updated EM&A
Manual was revised accordingly to the comments received from the EPD on 6th
December 2007 and was submitted to the EPD on 10th December 2007.  Comments were received from the EPD on
22 January 2008.  The ET will update
the EM&A Manual accordingly.

4.1.9
Baseline
Water Quality Monitoring

Baseline water quality monitoring was conducted
between 24 October and 30 October 2007 at six designated monitoring stations
(three impact stations and three control stations) established for the Project
in accordance with the EM&A Manual.  The Final Baseline Monitoring Report was submitted to the EPD on 21 November and comments were received from
the EPD on 6th December.  A revised Final Baseline Monitoring Report was submitted to the EPD on 20th
February 2008 with no further comments received and later placed under the EIAO
register.

5
Future
Key Issues and Conclusion

5.1
Key Issues for the Next
Reporting Period

It should be noted that dredging activities have been
suspended from 1st April onwards and are tentatively scheduled to
resume in September 2008.  No
dredging operation will hence be undertaken in the next reporting period.  As such, a key issue to be considered in
the next report period will be:

·
Dust
release and suppression.

5.2
Impact Prediction for
the Next Reporting Period

Provided that
environmental mitigation measures including good on-site practises are properly
implemented, it is not expected that unacceptable adverse impact will arise.

5.3
Works and Monitoring Schedule
for the Next Reporting Period

Work programme
for the next reporting period includes jetty platform works (non-piling), site
works (construction works for tank farm, operational and fire services
buildings, drainages, bund wall, security wall etc) and dredging operation.  Weekly site inspections will be
undertaken.

5.4
Conclusion

The EM&A
works were conducted throughout the construction period and the relevant
monitoring was conducted in accordance with the EP’s requirements.  Mitigation measures were used to
minimise the environmental impacts, where appropriate.  Some environmental deficiencies were
observed during the site inspections and the Contractor implemented corrective
action to mitigate the issues.
Overall, the site was in an orderly manner.