THE REPUBLIC OF ARMENIA YEREVAN MUNICIPALITY

Transcription

1 THE REPUBLIC OF ARMENIA YEREVAN MUNICIPALITY ADB Loan No ARM MFF Sustainable Urban Development Investment Program, Tranche 1 LAND ACQUISITION AND RESETTLEMENT PLAN 3 APRIL Yerevan City Municipality

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3 ABBREVIATIONS ADB AF AP AH AMD DESC DMS EA GoA IA IPSA IMA LAR LARF LARP MFF YM OM PGC PMIC PIU PPTA RA SES SPS SRS SPRSS SCREC ToR USD Asian Development Bank Affected Household Affected Person Affected Household Armenian Dram Detailed Engineering and Construction Supervision Consultant Detailed Measurement Survey Executing Agency Government of Armenia Implementing Agency Initial Poverty and Social Assessment Independent Monitoring Agency Land Acquisition and Resettlement Land Acquisition and Resettlement Framework Land Acquisition and Resettlement Plan Multi Tranche Financial Facility Municipality of Yerevan Operations Manual Project Governing Council Project Management and Institutional Strengthening Consultant Project Implementation Unit Project Preparatory Technical Assistance Republic of Armenia Socioeconomic Survey Safeguard Policy Statement Social and Resettlement Specialist Summary Poverty Reduction and Social Strategy State Committee of Real Estate Cadaster Terms of Reference American Dollar 3

4 GLOSSARY Affected Person/People (AP or APs) - Means all the people affected by the Project through land acquisition, relocation, or loss of incomes and includes any person, household (sometimes referred to as Project affected family), firm, or public or private institution. APs therefore include; i) persons affected directly by the road corridor, right-of-way, tower or pole foundations or construction work area; (ii) persons whose agricultural land or other productive assets such as trees or crops are affected by construction works; (iii) persons whose businesses are affected and who might experience loss of income due to the Project impact; (iv) persons who lose work/employment as a result of Project impact; and (v) people who lose access to community resources/property as a result of the Project. Affected Family, household (AHH)- All members of an affected household residing under one roof and operating as a single economic unit, It may consist of a single main family or an extended family group. This unit is the most important compensation/rehabilitation recipient. Compensation Payment in cash for an asset to be acquired or affected by a Project at replacement cost at current market value. Cut-off Date The date when Census, inventory of affected assets and socioeconomic survey for the entire Project started. The improvements made after the cut of date will not be eligible for compensation. Entitlement - Range of measures comprising cash compensation, income rehabilitation, relocation assistance, income replacement and integrity of the measures involving resettlement, which shall be provided to affected people, depending on nature of their losses and aimed at restoration of their social and economic base. Host population - Community residing near the area where the Project beneficiaries propose to voluntarily resettle as part of the Project. Improvements - Structures constructed (dwelling unit, fence, waiting sheds, animal pens, utilities, community facilities, stores, warehouses, paved surfaces, etc.) and crops/trees/plants planted by the person, household, institution, or organization. Land Acquisition - Range of measures provided in RA legislation aimed at implementation of acquisition process of property, which is subject to eminent domain, and provision of adequate compensation for alienated property. Leasing - Civil-legal institution specified by the Civil Code of the Republic of Armenia. According to the leasing contract signed within the scope of the mentioned institution the renter/lessor is obliged to give an asset to the leaseholder for his/her temporary management and/or usage in return for payment. Leaseholder- is the AP, who has been given the asset for temporary management and/or usage in compliance with RA Legislation Obtaining a legal status A building that is not cadastral unit, according to procedure established by the RA legislation, but is liable to receive a legal status. In order to receive the legal status APs should undergo the procedure prescribed in the RA legislation in collaboration with Yerevan Municipality and RA State Committee of Real Estate Cadaster. Marz - Armenia is divided into 10 provinces (marz). The province chief executive is the governor (marzpet) appointed by the Government. Each province is divided in communities (hamaynk) which are self-governing units and consists of one or more settlements (bnakavayr). Settlements are classified as towns (kaghak) or villages (gyugh). As of 2007, Armenia includes 915 communities (49 urban and 866 rural). Previously having Marz status, Yerevan, now has the status of a community and it has an elected mayor. 1

5 Non-legalizable - Areas classified as "Red Zones" (areas that are officially reserved for specific public use such military areas, hospital areas, school areas or areas that are not fit for settlement (river beds, radioactive terrains or other dangerous or ecological unfit lands) 1. and corresponds to Armenian legislation other conditions. Rehabilitation - Compensatory measures provided under the Policy Framework on involuntary resettlement other than payment of the replacement cost of acquired assets. Relocation - the physical relocation of an AP/AF from her/his pre-project place of residence/business location. Replacement Cost - The value determined to be fair compensation for land based on its productive potential, the replacement cost of houses and structures (current market price of building materials and labour without depreciation or deductions for salvaged building material), and the market value of residential land, crops, trees, and other commodities. Resettlement - All measures taken to mitigate any and all adverse impacts of the Project on AP s property and/or livelihood, including compensation, relocation (where relevant), and rehabilitation of the damaged/removed infrastructure and installations. Significant impact - Means 200 people or more will experience major impacts, which are defined as; (i) being physically relocated or (ii) losing 10 % or more of their productive assets (income generating). Socially vulnerable households - are: (i) Registered in the evaluation system of vulnerability of families (ESVF) and receive a family allowance, (ii) headed by a breadwinning women and not including other adult, working-age person with stable employment providing at least minimum monthly salary except for persons doing compulsory military service or full-time students under twenty-three years of age, (iii) households headed by persons entitled to old age pension and not including other adult, working-age person with stable employment providing at least minimum monthly salary except for persons doing compulsory military service or full-time students under twenty-three years of age. 1 See Land Code of the Republic of Armenia (2 nd of May,2001) article 60 2

6 TABLE OF CONTENTS ABBREVATIONS... 3 GLOSSARY... 1 EXECUTIVE SUMMARY INTRODUCTION Background Project Location Project Description... Error! Bookmark not defined. 1.4 Tranche 1: Shirak Street and Arshakunyats Avenue to Artashat Highway Urban Road Link. Error! Bookmark not defined Location and Description... Error! Bookmark not defined Sub-Project Implementation Timeline... Error! Bookmark not defined. 1.5 Land Acquisition and Resettlement Plan 3 Preparation... Error! Bookmark not defined. 1.6 Scope and Status of Land Acquisition and Resettlement Plan Objectives of Land Acquisition and Resettlement Plan 3... Error! Bookmark not defined. 1.8 Land Acquisition and Resettlement Related Project Implementation Conditions Document Disclosure Project Cut-Off Date IMPACT ASSESSMENT AND CENSUS OF AFFECTED HOUSEHOLDS Background Survey Methodology Impact on Land Land Classification by the Armenian Land Code Land Losses Impact on Buildings and Structures Residential Buildings and Structure Non-Residential Buildings and Structures Movable Structures Fences and Other Improvements Crops Trees Impact on Businesses and Income Impact on Employment Summary of Affected Households and Affected Persons Severely Affected Households Impact on Poor and Vulnerable Groups Gender and Ethnicity of APs SOCIOECONOMIC INFORMATION AND PROFILE Background Survey Methodology Household Composition and Socio-economic Classification Gender Age Education Employment and Income Sources Income and Expenditure Perceptions of Living Conditions Perception of the Project PUBLIC CONSULTATIONS, PARTICIPATION AND DOCUMENTS DISCLOSURE Background Public Consultation Information Disclosure GRIEVANCE REDRESS MECHANISM Background Grievance Procedure Access to Information and Grievance Resolution Services RA LEGAL AND ADB POLICY FRAMEWORK AND ENTITLEMENTS RA Legal and ADB Policy Background RA Laws on Land Acquisition and Resettlement

7 6.1.2 Asian Development Bank Involuntary Resettlement Policy under the Safeguard Policy Statement Comparison of RA Legislation on Land Acquisition and Resettlement and Asian Development Bank Resettlement Policy Land Acquisition and Resettlement Framework Principles and Entitlements Adopted for this Multi Tranche Financial Facility Compensation Eligibility Compensation Entitlements Assessment of Compensation Unit Values Conditions for Expropriation Conditions and Mechanisms for Legalization COMPENSATION, RELOCATION AND INCOME RESTORATION Background Agricultural Impact Relocation Strategy Residential Relocation Affected Businesses Employment loss RESSETLEMENT BUDGET Background Sources and Allocation of Funds Compensation for Acquired Land Valuation Approach Compensation to Legal Land Owners Compensation to Land Leaseholders Rehabilitation Allowance for Illegally used Land Compensation for Buildings, Structures and Improvements Valuation Approach Residential Buildings Non Residential Buildings Fences and Other Improvements Compensation for Crops and Trees Crops Fruit Trees Wood Trees Decorative Trees and Bushes Compensation for Business and Income Losses Business Losses Employment Losses Rehabilitation Allowances Severe Impact Allowances Allowances to Vulnerable Groups Relocation Allowances Registration Costs Budget Summary INSTITUTIONAL ARRANGEMENT Background Core Agencies and Organizations Asian Development Bank The RA Ministry of Economy The Municipality of Yerevan and Project Implementation Unit Consultants Other agencies and Institutions LAND ACQUISITION AND RESETTLEMENT PLAN 3 IMPLEMENTATION PROCESS Background Land Acquisition and Resettlement Plan3 Preparation Actions Land Acquisition and Resettlement Plan 3 Implementation Milestones Land Acquisition and Resettlement Plan 3 Implementation Schedule MONITORING AND EVALUATION Background Internal Monitoring External Monitoring

8 LIST OF TABLES Table E-1 Summary of Affected Households/ Persons by Category of Impact... 8 Table E-2 Project Specific Entitlement Matrix Table E-3 Timeline for Land Acquisition and Resettlement Plan 3 Finalisation and Implementation.. 12 Table 2-1 Land Impacts by Category and Ownership/ Occupation Status Table 2-2 Impact on Residential Buildings and Structures Table 2-3 Impact on Non-Residential Structures Table 2-4 Impact on Movable Structures Table 2-5 Impact on Fences and Walls Table 2-6 Impact on Other Improvements Table 2-7 Impact on Crops Table 2-8 Impact on Fruit Trees and Bushes Table 2-9 Impact on Wood Trees Table 2-10 Impact on Decorative Trees and Bushes Table 2-11 Permanent Impact on Business Table 2-12 Impact on Employment Table 2-13 Summary of Affected Households/ Persons by Category of Impact Table 2-14 Severity of Impact Table 2-15 Impact on Poor and Vulnerable Affected Households Table 2-16 Gender Profile of Affected Persons Table 2-17 Ethnic Profile of Affected Persons Table 3-1 Marital Status of Heads and Members of Affected Households Table 3-2 Age Distribution of Heads and Members of Affected Households Table 3-3 Education of Heads and Members of Affected Households Table 3-4 Employment Status of Heads and Members of Affected Households Table 3-5 Type of Employment Table 3-6 Self-Reported Income Sources Table 3-7 Average Monthly Expenses of Affected Households Table 4-1 Questions and Answers Table 6-1 Comparison of RA Legislation on Land Acquisition and Resettlement and ADB Resettlement Policy Table 6.2 Entitlement Matrix Table 7-1 Severely Affected Table 7-2 Compensation and Assistance for Affected Persons Losing Income Table 7-3 Relocation Impact Table 7-4 Comparison of the Average Price per sq.m. of the Assessed Apartments and the State Cadaster Survey for September Table 7-5 Comparison of the Average Price per sq.m. of the Assessed Residential Houses/Land and the State Cadaster Survey for September Table 7-6 Compensation and Assistance for Residential Relocates Table 7-7 Compensation and Assistance for Businesses Table 8-1 Compensation/ Rehabilitation Allowances for Agricultural and Non-agricultural Land Table 8-2 Land Compensation for Private Land Table 8-3 Compensation for Leases Table 8-4 Rehabilitation Allowance for Illegally Used Land Table 8-5 Compensation for Residential and Non-Residential Structures Table 8-6 Compensation for residential structures Table 8-7 Compensation for renovation Table 8-8 Compensation for Non -residential Buildings Table 8-9 Compensation for Fences Table 8-10 Compensation for Other Improvements Table 8-11 Compensation for Crops Table 8-12 Compensation for Seedlings Table 8-13 Compensation for Not Yet Productive Trees and Bushes Table 8-14 Compensation for Fruit Bearing Trees and Bushes Table 8-15 Compensation for Wood Trees Table 8-16 Compensation for Decorative Trees and Bushes Table 8-17 Compensation for Business Losses Table 8-18 Compensation for Employment Loss

9 Table 8-19 Allowances for Severely Affected Households Table 8-20 Allowances to Socially Vulnerable People Table 8-21 Transportation Costs for Movable Assets Table 8-22 Livelihood expenses for relocated AHs Table 8-23 Transportation Costs for Movable Structures Table 8-24 Fees for Property Registration Table 8-25 Value Added Tax for the Affected Properties Table 8-26 Budget Summary Table 8-27 Budget Summary per Source of Financing Table 10-1 Timeline for Land Acquisition and Resettlement Plan Preparation, Finalisation and Implementation LIST OF APPENDIXES Appendix 1 LARP 3 Project Information Pamphlet Appendix 2 DMS, Census, SES and Valuation Methodology Appendix 3 Questionnaire for Employees Appendix 4 Questionnaire for Small and Middle Businesses Appendix 5 Questionnaire for Big Businesses Appendix 6 Questionnaire for Census and Socioeconomic Survey Appendix 7 Project Information Brochure Disclosed to APs during Public Consultation Appendix 8 Valuation Methodology Brochure Disclosed to APs during Public Consultation Appendix 9 Minutes of Meetings from Public Consultations Appendix 10 Independent Monitoring Agency ToR Appendix 11 Land Description Protocol Appendix 12 Building Description Protocol Appendix 13 Business Description Protocol Appendix 14 List of APs with Relative Losses 6

10 EXECUTIVE SUMMARY I. Project Background 1. The Sustainable Urban Development Investment Program, The Program) is financed by the Asian Development Bank (ADB) under a Multi Tranche Financial Facility (MFF) with the RA Ministry of Economy as the Executing Agency (EA) and Yerevan Municipality (YM), as the Implementing Agency (IA). The main Program s objective of the Project is to complete missing road connections in the western urban ring road link of Yerevan city. 2. The Program entails so far two Tranches: Tranche 1 covering the improvement of Shirak Street and Artashat Highway and the widening of Arshakunyats Avenue and divided into two tenders sub-sections (tender 1 and 2).. i. Tranche 2 covering the improvement of Argavand Highway - Shirak Street West. 3. This Land Acquisition and Resettlement Plan 3 (LARP 3) has been prepared by Yerevan City to assess and plan the compensation of the impacts of civil works in the area covered by tender 1 of Tranche The implementation of Tender 1 requires substantial land acquisition and resettlement (LAR) with more than 200 significantly affected persons (AP), losing more than 10% of their income generated assets or being physically displaced from their houses. This has been classified as Category A Project according to ADB Operations Manual Operational Procedures 2. II. Land Acquisition and Resettlement Plan Objective and Scope 5. The main objective of LARP 3 is to identify impacts and persons affected by tender 1, plan their compensation and assist them to restore their livelihoods. LARP 3 complies with relevant AR laws and regulation, with the LAR Framework (LARF) for the Project and the ADB Safeguard Policy Statement (SPS) The scope of LARP 3 includes: (i) the profile of the APs, (ii) detailed measurement survey (DMS) of all affected assets, (iii) information disclosure and public consultations with APs, (iv) the policy and framework for compensation payments and rehabilitation, (v) complaints and grievance redress mechanism, (vi) relocation and income restoration, (vii) resettlement budget, (viii) the institutional framework, (ix) LARP implementation schedule, and (x) monitoring of LARP implementation. III. Impact Summary 7. The AH/AP Census and impacts survey were carried out in March-August LARP 3 identifies 85 affected land plots. From which 30 are privately owned by 38 AHs, 2 OM section F1/OP, paragraph 8 7

11 11 legalizable land plots used by 16 AHs 44 land plots belong to YM, from which 1 land plot is leased by 1 company and 43 are illegally used by 38 AHs, 9. In total 39 residential main buildings (4,143.8 m2) and one multistory apartment building with 8 apartments ( m2) will be demolished. In addition 118 support structures such as garages, storages, and basements will be affected. 33 non-residential structures will be affected. One gate will be installed to provide new car access to the residential property. In total m2 of improvements will be affected as well as lm and m2 fences /walls m2 of crops, 2, 245 fruit bushes and 1,358 fruit trees as well as 274 wood trees will be affected. In addition to 187 decorative trees, 1,337 decorative bushes and 1,633 decorative flowers will be affected. 11. Seven businesses will be permanently affected, of which 6 are with and 1 without tax declaration. There will be 5 affected employees. 12. The Census identified 90 affected households 3, including owners, renters and users of the lands/buildings, business owners and employees, from which 86 are families and 4 are companies. Information on different categories of affected households (AHs) and affected persons (APs) by impact type, as well as net figures without double counting are provided in the summary of AHs/APs, presented below. In total, the LARP 3 road section will impact land plots of 70 households, 73 AHs loosing residential and nonresidential buildings and structures, businesses of 7, and employment of 5AHs. Out of 90 AH 56 AHs are severely affected losing 10% or more of agricultural income and 53 AHs are to be relocated from their place of residence. 18 AHs are vulnerable. Table E-1 Summary of Affected Households/ Persons by Category of Impact Impact category AHs AHs APs No Per Type of Impact Without Double Counting A. Land Impact by Legal Occupancy Absol ute No Remarks A1. Private owners A2. Community B1. Residential structures (i) Lease (ii) Illegal use AH are included in A1; - 1 AH is included in A2 (i) (iii) In the process of legalization AH are included in A2 (ii) (i) Apartments (occupied by owners and coowners) B. Buildings Impact AH are included in A2(ii) (ii) Apartments (not occupied by co-owners) (iii) Residential houses (occupied by owners and co-owners) (iv) Residential houses (not occupied by coowners) AH are included in A1; - 7 AH are included in A2(ii); - 4 are included in A2 (iii) AH is included in A1 3 The concept of affected household in this document includes both affected families and affected legal entities/companies 8

12 Impact category (v) Residential houses (occupied by dwellers/ residents not paying the rent) AHs AHs APs No Per Type of Impact Without Double Counting Absol ute No Remarks (vi) Residential Support Structures B2. Non residential structures B3. Movable structures B4. Fences AH are included in A2(ii); - 3 AH are included in A2 (iii) - 4 AH is included in A1; - 1 AH is included in A2 (i); - 6 AH is included in A2 (ii) - 2 AH are included in A1; - 5 AH are included in A2 (ii) - 16 AH are included in A1; - 1 AH is included in A2(i); - 19 AH are included in A2(ii); - 3 AH are included in A2 (iii) B5. Installation of a gate C. Tree/ Crop Impact C1. Fruit trees and bushes C2. Wood trees C3. Decorative trees, bushes, flowers C4. Crop D. Business Impact - 30 AH are included in A1; - 1 AH is included in A2 (i); - 21 AH are included in A2 (ii); - 7 AH are included in A2 (iii) - 10 AH are included in A1; - 1 AH is included in A2(i); - 12 AH are included in A2(ii); - 5 AH are included in A2 (iii) - 28 AH are included in A1; - 1 AH is included in A1 (i); - 15 AH are included A2 (ii); - 6 AH are included in A2 (iii) - 10 AH are included in A1; - 5 AH are included in A2(ii); - 5 AH are included in A2 (iii) D1. Permanent with tax declaration AH are included in A2 (ii) D2. Permanent without tax declaration AH is included in A1 E. Employment Impact E. Permanent employment loss F. Vulnerability of AHs F. Vulnerable AHs G. Relocation Impact G1. Business relocation G2. Residential relocation AH are included in A1; - 8 AH are included in A2 (ii); - 1 AH is in A2(iii); - 3 AH are included in B1(i); - 1 AH is included in B1(ii); - 1 AH is included in B5-1 AH is included in A1; - 2 AH are included in A2 (ii); - 4 AHs D1-30 AH are included in A1; - 11 AH are included in A2 (ii); - 4 AH are included in A2 (iii); - 4 AH are included in B1 (i); - 4 AHs are included in B1 (v) Total A socio-economic survey (SES) of affected households was conducted from 14 May 2013 to 5 June of a total 86 affected families were surveyed. 9

13 IV. Compensation Policies and Rehabilitation Measures 14. According to the adopted Land Acquisition and Resettlement Framework (LARF), which is based on Armenian laws and ADB SPS (2009), APs eligible for compensation and/or at least rehabilitation are: (1) all APs losing land either covered by legal title/land rights or without legal status; (2) tenants and sharecroppers whether registered or not; (3) owners of buildings, crops, plants, or other objects attached to the land; (4) APs losing business, income, and salaries. Project specific Entitlement Matrix is provided below. 15. Compensation eligibility is limited by a cut-off date set for this Project on April 13, 2012, which is the date of assets description protocols signing by APs during project preparation technical assistance (PPTA) stage. Type of Loss Table E-2 Project Specific Entitlement Matrix Application Definition of APs Compensation Entitlements 1. Agricultura AH losing agricultural l land Loss land regardless of impact severity Owners Legalizable Owner Leaseholder (community/state) Non-legalizable AHs Compensation at replacement value +15% either in cash at market rates or cadastral values (whichever is higher). When there are no active land markets cash compensation will be based on the value of the yearly product of the land for a sufficient number of years to ensure the affected parties rehabilitation for the loss of their land. Legalizable APs will be legalized and paid the same compensation as above. Leaseholder will be legalized and compensated as full owners at market rates or cadastral values (whichever is higher) or will be given a new lease. If this is not possible they will receive compensation equal to the market or cadastral value of affected land (whichever the highest) + 15% in the following proportions according to the remaining length of the lease:1) < 1 year 5%; 2) < 15 years 14% ; 3) < 25 years 20%;4)>25 years -25%. These APs will receive a rehabilitation allowance equal to 25% of the affected land market or cadastral value (whichever the highest) 2. Non- Agricultural Land loss 3. Residential buildings AH losing their commercial/ residential land Owner Legalizable Owner Leaseholder (community/state) Non-legalizable AHs All AH regardless of legal status. Relocated Renters Compensation at replacement value +15% either in cash at market rates or cadastral values (whichever the highest). Same compensation as above. These AH will be legalized and compensated as full owners at market rates or cadastral values (whichever the highest) or will be given a new lease. If this is not possible they will receive compensation equal to the market or cadastral value of affected land (whichever the highest) + 15% in the following proportions according to the remaining length of the lease: 1) < 1 year 5%; 2) < 15 years 14% ; 3) < 25 years 20%;4)>25 years -25%. These APs will receive a rehabilitation allowance equal to 25% of affected land market or cadastral value whichever the highest.. Cash compensation + 15% for loss of building at full replacement cost ( not less than market value) free of depreciation/transaction costs and salvaged materials. Partial impacts will entail the compensation of the affected portion of the building plus repairs (with agreement of APs). Relocation and severe impact allowance as entitlement 9 and 10 below 4. Nonresidential buildings/a ssets AHs with valid registration Cash compensation + 15% for loss of building at full replacement cost (not less than the market value) free of depreciation/transaction costs and salvaged materials. Partial impacts will entail the compensation of the affected portion of the building plus repairs (with agreement of APs). AHs with non legal Cash compensation for loss of building at full replacement cost (to be not buildings/structures built less than the market value) free of depreciation/transaction costs and on the legal land salvaged materials. AHs with non-legal Rehabilitation allowance equal to replacement cost (free of buildings/structures built depreciation/transaction costs and salvaged materials) minus the on the non- legal land legalization cost, up to a maximum up to 20% of market value. 10

14 Type of Loss 5. Common property Loss 6. Crop Losses 7. Tree Losses Application Definition of APs Compensation Entitlements Community/Public Assets Standing crops affected Trees affected Relocated Renters Community/State All AH regardless of legal status (including owners subject to obtaining legal status and residents having no residency status) All AH regardless of legal status. (including owners subject to obtaining legal status and residents having no residency status) Relocation and severe impact allowance as entitlement 9 and 10 below Reconstruction of lost structure in consultation with community/state authorized agency and restoration of their functions One year crop compensation in cash at market rate by default at gross crop value of expected harvest. Cash compensation at market rate based on type, age and productive value of the trees. 8. Business or Employme nt Losses Business employment loss All AH regardless of legal status (including owners subject to obtaining legal status and residents having no residency status). Owners: (i). (permanent impact) cash indemnity of 1 year net income; (ii) (temporary impact) cash indemnity of net income for months of business stoppage up to 1 year. Assessment to based on tax declaration. In absence of tax declaration the AH will receive a rehabilitation allowance based on the maximum non-taxable salary for the number of months of business stoppage up to 1 year. The maximum non taxable salary is equal to minimum salary. Permanent Worker/Employees: Indemnity equal to: (i) Permanent job loss 6 months of average monthly salary; (ii) Temporary loss average monthly salary for the number of months of job loss up to 6 months. 9. Allowance s for Severe Impacts 10. Relocation allowances 11 Vulnerable People Allowances 12. Temporary impacts 13. Unforeseen LAR impacts, if any AH with >10% agricultural income loss or to be relocated Transport/transition costs All severely affected AHs including informal settlers and relocated renters All relocated AH including relocated renters i) 1 additional crop compensation covering 1 year yield for APs affected by severe agricultural income losses ii) a rehabilitation allowance of 6 months at minimum salary for relocated AHs Provision of funds to cover transport costs and livelihood expenses for 1 month. AHs below poverty line Allowance equivalent to 6 months of minimum salary and employment or headed by Women or priority in Project-related jobs elderly people All AHs Due rent and rehabilitation for temporarily affected assets will be provided. YM will consider the unforeseen resettlement impacts during Project implementation and will compensate/ rehabilitate based on the above provisions. V. Institutional Setup for the Project 16. RA Ministry of Economy (MOE) is the Executing Agency. The Municipality of Yerevan (YM), is the Implementing Agency and has the overall responsibility for implementation of the Project, including LARP preparation and implementation. IA operates through the Project Implementing Unit (PIU), which has a social safeguard and resettlement specialist. 17. A Project Governing Council (PGC) made up of representatives from the YM, concerned ministries and chaired by RA Prime Minister. The main objective of the PGC s activity is to manage the allocated funds received by the RA through respective agreements with ADB and other financial institutions, and to make decisions in compliance with regulations specified in Decree N892-A dated October 26, 2009 and approved by Prime Minister of the RA. According to RA Government N273 Decree 11

15 dated March 7, 2012, PGC is entitled to examine/review the grievances addressed by AP s and to resolve those under its jurisdiction as another link for APs before they apply to the RA judicial bodies. 18. The Detailed Engineering and Supervision Consultant (DESC) has prepared the LARP for the project and will assist PIU during implementation through participation in public consultations and verification of compensation budgets. 19. The Project Management Implementation Consultant (PMIC) will disclose information pamphlets and conduct the consultations with affected households and persons. The PMIC will assist PIU implementing the LARP. 20. ADB periodically supervises the Project, reviews all LARPs and provides clearance to contract awards, and initiation of civil works. VI. Land Acquisition and Resettlement Plan Implementation 21. The IA will begin implementation of LARP 3 immediately after its approval by the ADB and GoA. Based on established regulations it will provide notice to the APs on the commencement of Land Acquisition and Resettlement Plan. The APs will not be required to relocate before 45 days have passed from the delivery of full compensation. 22. The timeline presented in the following table shows the distinct stages of LARP 3 preparation, finalization and implementation. Table E-3 Timeline for Land Acquisition and Resettlement Plan 3 Finalisation and Implementation Task Name Responsibility Start Finish LARP 3 FINALIZATION Aug 1 '12 May 18 '14 Hiring the Supervision Consultant PIU Sep 1 '12 Sep 1 '12 Finalization of road alignment DESC Oct 1 '12 Feb 1 '13 ADB approves LARP 3 ADB Apr 04 '14 Apr 04 '14 RA Government approves LARP 3 GoA May 15 '14 May 15 '14 RA Government approves LAR Budget GoA May 15 '14 May 15 '14 Posting approved LARP 3 document on ADB and YM websites ADB and PIU May 25 '14 May 25 '14 Distribution of the disclosure information pamphlet PIU May 15 '14 May 18 '14 LARP 3 IMPLEMENTATION Apr 1 '13 Oct 3 '14 Allocation of LAR budget to YM RA MoF May 20 '14 May 20 '14 Identification of potential expropriation cases PIU May 1 '13 May 1 '13 Draft contracts sent to APs PIU May 25 '14 Jun 3 '14 Signing contracts PIU Jun 3 '14 Sep 3 '14 Disbursement of compensation PIU Jun 13 '14 Sep 13 '14 Finalization of expropriation, provision of expropriation injunctions PIU Jul 15 '14 Oct 15 '14 Preparation of LARP 3 Compliance Report IMA May 1 '14 Oct 13 '14 ADB approves the LARP 3 Compliance Report ADB Nov 2 '14 Nov 2 '14 Handing over of the site to the Contractor PIU Nov 3 '14 Nov 3 '14 Commencement of civil works Contractor Nov 3 '14 Nov 3 '14 12

16 CONTINUOUS TASKS Monitoring PIU/IMA/ADB - - Grievances redress PIU - - VII. Public Consultation and Information Disclosure 23. A first round of public consultations was held in 2010 and 2012 (PPTA stage). LARP 3 further consultations were held in August 2013 in two stages. The consultations included presentation of the entitlements matrix, redress mechanisms, valuation methodology, measurement survey, project map with actual measurement and AP s names, as well as various specific cases, discussed with APs. In total 112 APs participated in public consultations. 24. Implementation ready LARP will be uploaded on the ADB and YM websites after approval. Project Information Pamphlet will be disclosed to APs as soon as LARP is approved by RA GoA and ADB. VIII. Budget Summary 25. The total implementation cost of LARP 3, including compensation, rehabilitation allowances as well as administrative costs for LARP implementation and contingency amounts to 2,858,339, AMD, which is equivalent to USD 7,003, Budget will be allocated from 3 sources: (i) land compensation and other land acquisition expenses, including taxes, duties, fees, and transaction costs for the land will be paid from the YM budget; (ii) taxes, fees, and transaction costs related to losses other than land, including transaction costs related to allowances, will be covered by the co-financing part of the RA state budget; (iii) compensation for the remaining assets will be paid from the loan. After approval of the LARP by the GoA, YM and the RA Ministry of Finance will ensure timely allocation of funds stipulated in LARP 3 budget from the means envisaged for the Project within Yerevan community and RA State budgets. In case of necessity, article distribution of the budget may be applied. IX. Grievance Redress Mechanism 26. Several parties will be involved in grievance redress mechanism: (i) PIU, (ii) YM, and (iii) PGC. To make the process accessible to APs, PIU established a field office for the weekly meetings with APs during LARP 3 preparation. Latter will operate during the LARP implementation stage. Regardless of the set grievance mechanism and procedures, the APs will have the right to submit their cases to the court of law at any point in time during the grievance process. X. Monitoring and Evaluation 27. The implementation of LARP 3 will be subject to both internal and external monitoring. Internal monitoring will be conducted by the PIU, supported by the PMIC. External monitoring is assigned to Am Partners, an Independent Monitoring Agency hired by PIU and approved by ADB. IMA will monitor LARP implementation and prepare Compliance report, which should be approved by ADB as a condition to commence the contract's construction works. 13

17 1 INTRODUCTION 1.1 Background 28. The Sustainable Urban Development Investment Program, The Program) is financed by the Asian Development Bank (ADB) under a Multi Tranche Financial Facility (MFF) with the RA Ministry of Economy as the Executing Agency (EA) and Yerevan Municipality (YM), as the Implementing Agency (IA). The main Program s objective of the Project is to complete missing road connections in the western urban ring road link of Yerevan city. 29. The Program entails so far two Tranches: ii. Tranche 1 coveris the improvement of Shirak Street and Artashat Highway and the widening of Arshakunyats Avenue and is divided into two tenders (tender 1 and 2). iii. Tranche 2 covering the improvement of Argavand Highway - Shirak Street West. 30. This Land Acquisition and Resettlement Plan 3 (LARP 3) was prepared by Yerevan City to assess/plan the compensation of the impacts of civil works under d by tender 1 of Tranche The implementation of Tender 1 requires substantial land acquisition and resettlement (LAR) with more than 200 significantly affected persons (AP), losing more than 10% of their income generated assets or being physically displaced from their houses. This has been classified as Category A Project according to ADB Operations Manual Operational Procedures Land Acquisition and Resettlement Plan Objectives and scope 32. The main objective of LARP 3 is to identify impacts and persons affected by tender 1 and the first 50 m. of tender 2, plan their compensation and assist them to restore their livelihoods. LARP 3 complies with relevant AR laws and regulation, the RA Government Decree N 273-N, the LAR Framework (LARF) for the Project and the ADB Safeguard Policy Statement (SPS) This LARP 3 includes: (i) the profile of the APs, (ii) detailed measurement survey (DMS) of all affected assets, (iii) information disclosure and public consultations with APs, (iv) the policy and framework for compensation payments and rehabilitation, (v) complaints and grievance redress mechanism, (vi) relocation and income restoration, (vii) resettlement budget, (viii) the institutional framework, (ix) LARP implementation schedule, and (x) monitoring of LARP implementation. 34. LARP 3 is based on the final detailed design of the Project and is ready for implementation. The following steps were taken for the completion of this LARP: i. Completion of census of APs, AHs and inventory of losses; ii. Completion of detailed measurements, description and valuation of affected land, buildings, structures and other assets; iii. Completion of the socioeconomic survey based on a 99 % sample of LARP 3 AHs; iv. Completion of the consultations with APs; v. Preparation of a detailed compensation budget for all types of losses. 1.3 Project Location 35. Yerevan, the RA Capital, spans 260 km2 for 18 km in the north-south direction and 16 km in the east- west. The Project area is in South-West Yerevan (Shengavit and Malatia-Sebastia Districts) about 6 km of the City center and the Argavand and Getapnya communities of Ararat Marz. 4 OM section F1/OP, paragraph 8 14

18 Figure 1-3 Project Location Figure 1 15

19 . 1.4 LARP 3 Content 36. For the achievement of these objectives, LARP 3 provides particulars necessary for compensation, resettlement and rehabilitation by identifying: i. The profile of the APs; ii. The extent of losses and impact of the Tranche 1 new alignment section; iii. Information disclosure, consultation and participation; iv. The policy and framework for compensation payments and rehabilitation; v. Complaints and grievance redress mechanism; vi. Resettlement budget and financing plan including valuation of, and compensation for, lost assets, relocation, and rehabilitation; vii. The institutional framework and implementation schedule of resettlement plan; and viii. Monitoring of LARP implementation. 1.5 LAR Related Project Implementation Conditions 37. In compliance with ADB safeguards requirements and MFF Project each tranche and subproject approval/implementation is based on the following conditions: i. MFF/First Tranche Appraisal: conditional to: a) Preparation/disclosure of a LARF for the whole MFF acceptable to ADB and Government; b) Preparation of an Initial Poverty and Social Assessment (IPSA) and c) Preparation/disclosure of a LARPs acceptable to ADB and Government for each tranche of the Program requiring LAR; ii. Approval of Periodical Financial Request (PFR) for following Tranches and each related sub-projects : conditional to: a) Review/update/disclosure of the LARF, b) Preparation of a Summary Poverty Reduction and Social Strategy (SPRSS); c) Preparation/disclosure of at least a draft LARP fitting the revised LARF and acceptable to ADB and Government for each tranche of the Program with LAR; iii. Contract awards signing: conditional to: a) approval of the subproject LARP (in this case LARP 3) by GoA and ADB, b) disclosure to the public of the implementationready document and information pamphlet; c) Hiring of an Independent Monitoring Agency. iv. Commencement of Civil Works: conditional to: full implementation of the final subproject LARP (in this case LARP 3) to be vouched by a compliance report prepared by the IMA, accepted to ADB. 1.6 Document Disclosure 38. This final updated implementation-ready LARP 3 in Armenian will be disclosed on YM official website after GoA approval. The LARP in English will be posted on the ADB official website immediately after ADB approval. The summary LARP information pamphlet in Armenian will be disclosed to the APs after LARP approval. 1.7 LARP 3 Cut-Off Date 39. The cut-off date for LARP 3 is set as April 13, 2012 when signing of land, buildings and business description protocols for the Draft LARP started. Formats of protocols are presented in Appendix 13,14,15. 16

20 2 IMPACT ASSESSMENT/CENSUS OF AFFECTED HOUSEHOLDS 2.1 Background 40. One of the key principles adopted for the preparation of this LARP is that all compensation payments and livelihood restoration assistance related to the Project must be based on a detailed understanding of the impacts of the Project on affected people. For this LARP 3, the data was updated between March 2013 and August In order to accurately assess the extent of the Project s LAR impacts the following surveys were undertaken: i. Detailed Measurement Survey (DMS) to measure the affected area of the lands, buildings space and the number and types of affected assets. ii. Inventory of Losses - to identify and evaluate the characteristics of the land, buildings and assets to be acquired. iii. Valuation of Replacement Cost of the Affected Assets - to identify the cost of compensation of lost assets, income and other livelihood sources and allowances for development of the LARP budget. iv. Census Survey - to identify the exact number of AHs and their members, including some elementary social characteristics such as gender and ethnicity. v. Socio-Economic Survey (SES): to identify the current socioeconomic condition of affected individuals, households and business owners as well as access to public services, perceptions of compensation and Project impact on their livelihood. 2.2 Survey Methodology 41. DESC engaged a licensed measurement and valuation company, as subcontractor, to measure and re-evaluate independently from all previous survey efforts every asset to be acquired. This was done irrespective of the information that can be derived from the cadastral maps, data obtained during the preparation of Draft LARPs, and the legal status of the assets affected by the Project. 42. The scope of the DMS and assets inventory included the identification, classification, measurement, and valuation of the following assets, or attributes: i. Land (agricultural, residential, industrial and commercial plots), including improvements on those plots ii. Buildings/structures (residential and business structures, including classification by building category and construction type) iii. Legal status of the AP land occupancy iv. Area and type of crops v. Number and type of trees vi. Affected business (impact type and legal status) vii. Employment losses viii. Number, type and area of affected community/ public assets. 17

21 43. The DMS included measurement of existing real estate plots and buildings/structures built on them, determination of their targeted purpose, ownership, forms of use, its quality and quantity, appearances and types. The measurements were taken in accordance with the requirements of the relevant ADB policy documents and Annex 1 of Decree No 283-N (directive on real estate measurement (registration) of October 20, 2011 issued by the Chairman of the State Committee of Real Estate Cadaster (SCREC) adjunct to the GoA. The measurements were also taken using satellite positioning stations, electronic tachymeters and laser range finders. According to ADB policy requirements, the current ground situation measured is based on the actual size of the assets used by AHs at the moment of measurement 5. The APs were informed of the measurement date and time by telephone, a day prior to the field visit. This procedure ensured the measurement process was monitored by the APs (Details are provided in Appendix 2). 2.3 Impact on Land Land Classification by the Armenian Land Code 44. The Land Code of the RA (May 2001) classifies land into the following nine categories: (1) Agricultural, (2) Settlements/residential, (3) Industrial, Mining and Production (4) Power, Transport, Communication, Utility infrastructure facilities (5) Protected land for special purposes, (6) Special significance, (7) Forested, (8) Water and (9) State Reserve lands. Each target significance land, based on its type of usage, is classified by category of its functional significance. 45. The Project is located in an urban setting. Almost all of the affected plots are categorized as settlements/residential land by SCREC. For the sake of clarity and based on the actual usage, the affected land categories are grouped into following categories: orchards/agricultural, residential, commercial, industrial. i. Orchards/agricultural land, which is used to grow some fruit or wood/ decorative trees and bushes. ii. Residential Land, which is used for residential houses, adjacent auxiliary buildings and gardening iii. Non-residential Land, which is used for non-residential purposes, such as garage or storage. iv. Commercial Land, which is used for businesses such as shops and petrol stations. v. Industrial Land, which is used for factories, factory offices and industrial storages and warehouses Land Losses 46. Affected lands are concentrated in Yerevan urban setting in Shengavit district. In total, there are 85 land plots covering a surface area of 26, m². Overall, 70 households will have some land impact. There are 2 land plots with 2 co-owners for each and one land plot with 3 co-owners. Affected land-plots are mostly residential, under orchards or commercial. 5 If the actual measurement corresponds to the parameters (taking into account the permissible deviation range, defined by the SCREC) stated in the property certificate issued by the SCREC, the property layouts were prepared for submission to the SCREC during LARP implementation period. If not so, the property owner was informed about it. If the owner wanted, a new layout was prepared for submission to the SCREC. After a corresponding correction in the ownership certificate was made, a final layout was prepared for submission to the SCREC for the real estate reregistration and prior to signing an asset acquisition contract. 18

22 47. The affected land plots are grouped into the following three types, based on their ownership status: i. Private-titled Land - a total of 30 plots belong to persons having a legal title over the affected land parcels; Most of private lands are residential (26). Two land plots are commercial but are not currently used for the purpose. Two land plots are industrial: one industrial production is closed, on the other plot, a Nairit Factory is located. None of the businesses will be affected, as only part of the land and/or fence will be affected. ii. Legalizable Land - 11 land plots are in the process of legalization and will be compensated as legal owners as soon as legalization process will be finished (Details on the issue are presented in the Chapter 6). All land plots are residential. iii. Community Land this is the land that belongs to YM. The survey found that 43 plots of such land are used directly by informal tenants without any legal title and one is formally leased. Leased land plot is used for the business (metal workshop) that has to be relocated. From 43 illegally used land plots, one land plot is the public area in front of a multilevel residential building where an AP started building a structure for private use. One is a small part of the land next to the non-residential/unused structure, covered with concrete. The 3rd one is the land with garage. For the sake of clarity, this 3 land plots are categorized as nonresidential (public space). Other 17 land plots are used for orchards with fruit and decorative trees, from which 5 land plots are partially affected and affected part amounts from 10 to 50 sq.m. The others are totally affected with a minimum of 173 sq.m and maximum of 898 sq.m (average 372 sq.m for 12 land-plots). Eight land plots are used for commercial purposes: on 6 land plots businesses will be permanently affected (details are provided in the business impact section), and the other 2 will not have any significant impact (only fence will be affected). Out of all 43 plots, 14 are used for residential purposes: AHs uses supplementary community land in addition to their private residential land next to their properties The owner of the community land (Yerevan Municipality) will not be compensated. Moreover, YM will compensate for all the land losses in Yerevan form YM budget as the road constructed will become YM property. Private land owners and the leaseholder will be compensated from YM budget for the land loss. Illegal users will be paid rehabilitation allowance from YM budget (for the details, see chapter 7 and 8). 49. All categories of affected land will be compensated. The land impacts data is summarized in the following table. Land Category Table 2-1 Land Impacts by Category and Ownership/ Occupation Status Community Properties in Private the process of Illegally Used Rented legalization Affected Affected Affected Affected Plots Plots Plots Plots Area Area Area Area Plots Total Affected Area No m2 No m2 No m2 No m2 No m2 Residential 14 1, , , Orchard 17 4, , Commercial 8 1, , Non residential Industrial , , Total 43 8, , , , On this section, there is no any relocated AP that will lose only illegal residential land. All the APs have also private residential lands. 19

23 2.4 Impact on Buildings and Structures Residential Buildings and Structure 50. In total, the Tranche 1 LARP 3 section will affect 188 residential buildings and structures. Out of these, 8 are apartments with 5 support structures, 39 7 houses and 118 supporting structures. Out of these, 109 supporting structures belong to residential main buildings which will be affected, while 9 supporting structures belong to households whose main residential building will not be affected at all. In total, the impact on all residential buildings and structures located on 43 land plots, will affect 61 households. However, two AHs are the owners of the flats and 1 AH is the co-owner of the residential house, but they do not live there and will not lose their actual place of residence. 51. The area of affected buildings amounts to m². The affected buildings are mainly made of stone or concrete. Supporting structures are made of stone, metal, concrete, wood etc. 52. One AP s property will not be affected by the project; however, the existing access to the residential land plot will be closed for motor vehicles. AP will be provided with sufficient compensation to open an access from the other side and to install a new gate. Table 2-2 Impact on Residential Buildings and Structures Name Material No Total Plots m2 No A. Apartments Apartment Stone Basement Stone Storage hole Soil Unfinished structure Stone Toilette Block Subtotal (A) B. Houses Residential house Stone, Stone/Concrete, Stone/ Metal Subtotal (B) C. Supporting Structures C1. Supporting Structures with Affected Main Building Animal stoke Stone Basement Concrete Garage Stone Greenhouse Glass Hencoop Stone Hole/Storage hole Stone Loft Metal Mansard/Split level Stone, Metal Non-working shop/storage Stone Patio/bac patshgamb Metal Pool, swimming pool Stone, Concrete Shed Metal affected residential houses consist of 57 separate structures. Each structure was valuated separately, as the replacement cost was calculated based on the material of the each particular structure. 20

24 Name Material No Total Plots m2 No Storage Metal, Stone Summer kitchen Stone Support Structure Stone, Block, Concrete, Wood Toilette Stone, Wood Subtotal (C1) (C2) Support Structures of HHs without Residential Loss Greenhouse Metal Non-working shop/storage Block Pool, swimming pool Stone Shed Metal Support Structure Stone, Wood Subtotal (C2) Subtotal (C1+C2) Total Non-Residential Buildings and Structures 53. In total, 33 non-residential structures will be affected, from which 28 belong to businesses and 5 are non-residential/ non business structures used by APs for private purposes. Affected 28 main and supporting business structures belong to 8 businesses located at 11 land-plots. These structures amount to an area of sq.m out which 377 sq.m are illegal. One of the businesses has only supporting or unused structures affected, so the business operation is not affected by impact on structures. Five non-business structures are aimed for private use only and located on three land plots opposite of the APs residence. Table 2-3 Impact on Non-Residential Structures No Type of Structure Material No A. Non Business Structures Legal sq.m Illegal sq.m Total sq.m. 1 Shed Metal Support storage structure Block Storage hole Soil Car repair man hole (for private use) Stone Garage Stone Business N 1 Business N 2 Business N 3 Subtotal (A) B. Business Structures Non-operating shop Stone Shed Metal/ Stone Shed Metal Petrol station Stone Stand-alone eating room Stone Shed Metal Workshop Stone Toilette Stone Structure Wood No of Plots

25 No Type of Structure Material No Business N 4 Legal sq.m Illegal sq.m Total sq.m. Structure Stone Shed Metal Workshop Metal Workshop Stone Car repair man-hole Stone Shed Metal Stairs Stone Business N 5 Car repair station Stone Business N 6 Business N 7 Business N 8 (the business operation is not affected by loss of these structures) Garage/Car repair station Stone Stairs Metal/ Concrete Car repair man-hole Stone Grocery Stone Shed Metal Shop Stone Non-operating shop Stone Non-operating bakery Stone Guard post Stone Shed Metal Basin/decorative Stone No of Plots Subtotal (B) Total (A+B) , Movable Structures 54. The Tranche 1 LARP 3 section will affect 9 movable structures located on 6 illegally used land plots. Transportation cost will be paid to the APs to relocate structures. Table 2-4 Impact on Movable Structures Buildin Construction Type of Affected Structures gs Type Affected Surface No m² Kiosk Metal Kiosk Wood Metal House Metal Garage Metal Movable Shed Metal Petrol Dispenser Point 8 Metal 1 - Petrol Tank Metal 1 - Total Վառելիքի լցման աշտարակ և ցուցավահանակ (arm) 22

26 2.4.4 Fences and Other Improvements 55. A total of linear m. of fences and 1, m² stone wall/fences on 42 land plots will be affected by the T1 LARP 3 section. Of this total length, linear m of fences are different type of metal fences, while 1, m² are made of stone tuff (a local type of volcanic stone). Overall, 36 households will be affected by loss of fences. Table 2-5 Impact on Fences and Walls Material Length Total Area m m² Metal A Metal B Tuf/Stone A Tuf/Stone B Tuf/Stone C Tuf/Stone D Tuf/Stone E Tuf/Stone F Tuf/Metal Reinforced Concrete Slabs/ Stone A Reinforced Concrete Slabs/ Stone B Total , The APs have made some other improvements on 46 land plots that are measured and calculated for compensation. There are concrete, asphalt and bricks surfaces made by APs on the affected lands. The most affected are concrete paved areas that amount to 2, m². A total of 2, m² of improvements are affected and will be compensated. Table 2-6 Impact on Other Improvements Type Material Plots Area No m² No Area Asphalt Area Concrete Covered Area Concrete Bricks Area Slab Brick Furnace Brick 1-2 Gate Metal Fireplace Brick 1-1 Tandoor Brick 1-1 Brazier Brick 2-2 Door Metal Total Crops 57. Although the affected area is urban some residents grow vegetables to support their home economy. Usually, vegetables are grown in orchards on the illegally used land plots or in the home gardens next to APs residences. However, the notion of agricultural loss has a different dimension 23

27 here from agricultural loss in rural settings. For these APs, agriculture is not means of living, but rather a supplement to their home economies. The T1 LARP 3 section will affect crops on 15 plots used by 20 AHs. Most frequently grown are strawberries, herbs and potatoes. In consequence, a total of kg of different vegetables will be lost annually. Type of Crop Table 2-7 Impact on Crops Annual Affected Area Productivity Total Loss kg/ m² m² kg Sweet potatoes Strawberry Bean Tomato Greens Potato Garlic Eggplant Pepper Onion Melon Total Trees 58. Under the T1 LARP 3 section, 3603 fruit trees and bushes will be affected. Out of this, 2,245 are fruit bushes and 1,358 are fruit trees. 59. Most of the affected bushes are grapes, dewberries and currants. Most of the affected trees are cherries, apples and plums. In total, 60 households will be affected by fruit trees and bushes loss. The owners will receive full compensation for the affected trees. A summary of information on the affected fruit bushes and trees is presented in the following table. Table 2-8 Impact on Fruit Trees and Bushes Not yet Seedling Productive Total Type of Tree Productive No No No No A. Fruit Bushes Raspberry Fig Grape Currant Rose-hip Hazelnut Dewberry Subtotal(A) ,856 2,245 B. Fruit Trees Cherry Peach Walnut

28 Type of Tree Seedling Not yet Productive Productive Total No No No No Mulberry Apple Apricot Persimmon Sweet Cherry Cornel Dwarf Apple Almond Pomegranate Plum (Shlor) Plum Quince Pear Oleaster Crataegus (Haw) Tangerine Subtotal(B) ,358 Total (A+B) ,777 3, There will be 274 timber/wood trees affected by the T1 LARP 3 section. Of the affected timber wood trees, the most affected are ash tree and ulmus (123 and 92). Of all affected trees, about 40 % are fully grown trees. 27 households will be affected by loss of timber trees. The owners of affected trees will be compensated without deductions for the value of the wood/timber that can be obtained from the affected trees. Type Table 2-9 Impact on Wood Trees Medium Full Seedling Total Growth Growth No No No No Acacia Ailanthus Salix Caprea Poplar Ulmus Maple Ash Tree Willow Oak Tree Cercis Total The T1 LARP 3 section will also impact 188 decorative trees. As shown in the following table, the most impact is on lilac trees. The T1 LARP 3 section area is reach with decorative bushes and garden flowers. Almost every house has gardens full of flowers. 1,337 decorative bushes and 1,633 peace of different types of garden flowers will be affected. The most affected are iris and rose noble. All of the affected decorative trees and bushes belong to 51 households. 25

29 Table 2-10 Impact on Decorative Trees and Bushes Small Medium Total Type Trees Trees Trees Trees No No No No A. Decorative Flowers Flowers 96 sq.m. Lawn 22 sq.m Peony Iris ,177 Chrysantemum Lily Chamomile Canna Sisimbrium Alepes Calla Subtotal (A) ,633 B. Decorative Bushes Rose Oble Climbing Rose Wild Grapes Box Tree Paliurus Spina-Christi Sweetheart Rose Forsythia Jasmin Tea Rose Tecoma Hedera Helix Yucca Bengamin Gooseberry Thuja Occidentalis F. Globosa Genista Symphoraiarpos Humulus Lupulus Lycium Barbarum Amorpha Fruticosa Subtotal (B) ,337 C. Decorative Trees Silver Fir Fir Lilac Thuja Juniperus Virginian Pine Juniper Subtotal (C)

30 Small Medium Total Type Trees Trees Trees Trees No No No No Total 100 1,342 1,716 3, Impact on Businesses and Income 62. Based on the nature and scope of the affected business, only permanent business losses are identified in this LARP. It includes losses to businesses occurred due to demolition of main buildings. The APs will receive a cash indemnity of 1 year net income. 63. There are a total of 7 affected businesses in this Sub Project area. They belong to seven households with 32 affected persons. All seven businesses will be permanently affected. Out of these, 5 will lose building and the business with it, and two will lose only business as they are not owners of affected buildings and are not rent-payers either. There are no businesses, which will be temporary affected. However, if during the construction period, any of business is affected due to temporarily blocked access, the impact will be assessed and APs will receive the compensation for the number of days/months that business was interrupted and in accordance to the set entitlements. Details on impact and income restoration are presented in Chapter 7 Compensation, Relocation and Income Restoration. No Description Table 2-11 Permanent Impact on Business With tax Without tax declaration declaration No No No of Land Plots 1 Car service 1-2 (business No 1 is on 2 land plots, 2 Car service 1 - and business No 2 is on 1 land plot) 3 Grocery Petrol station Car service Café/food service Metal workshop/ դարբնոց 1-2 Total Impact on Employment 64. Due to closure/relocation of businesses resulting from demolition of main business buildings, 5 employees from 5 households will permanently lose their employment. Table 2-12 Impact on Employment Loss Employees Affected No Permanent Employment Loss 5 Total 5 27

31 2.9 Summary of Affected Households and Affected Persons 65. The Census identified 90 households, including owners, renters and users of the lands/buildings, business owners and employees from which 86 are families and 4 companies. Information on different categories of affected households (AHs) and affected persons (APs) by impact type, as well as net figures without double counting are provided in the summary of AFs/APs, presented below. In total, the LARP 3 read section will impact land plots of 70 households, from which 38 AHs are private owners; as well as buildings and structures of 73 AHs from which 62 are residential and 11 nonresidential structures. From 62 AHs loosing residential structures 10 AHs are losing apartments in the multistoried buildings. Two AHs from this 10 are just co-owners and will not lose their place of residence. Residential structures of 52 AHs will be affected, from which 41 AHs are the owners of this houses and live there, 1 AH does not live in the house to be affected, 4 AHs are not the owners of the houses, but live there without paying the rent and 6 AHs will lose only residential support structures and will have not to be relocated from the place of their residence. 66. Employment of 5 AHs and business of 7 AHs will be affected. Out of 90 AH 56 AHs are severely affected losing 10% or more of agricultural income and 53 AHs are to be relocated. 18 AHs are vulnerable. Table 2-13 Summary of Affected Households/ Persons by Category of Impact Impact category AHs AHs APs No Per Type of Impact Without Double Counting A. Land Impact by Legal Occupancy Absol ute No Remarks A1. Private owners A2. Community B1. Residential structures (i) Lease (ii) Illegal use AH are included in A1; - 1 AH is included in A2 (i) (iii) In the process of legalization AH are included in A2 (ii) (i) Apartments (occupied by owners and coowners) B. Buildings Impact AH are included in A2(ii) (ii) Apartments (not occupied by co-owners) (iii) Residential houses (occupied by owners and co-owners) (iv) Residential houses (not occupied by coowners) (v) Residential houses (occupied by dwellers/ residents not paying the rent) AH are included in A1; - 7 AH are included in A2(ii); - 4 are included in A2 (iii) AH is included in A (vi) Residential Support Structures B2. Non residential structures B3. Movable structures B4. Fences AH are included in A2(ii); - 3 AH are included in A2 (iii) - 4 AH is included in A1; - 1 AH is included in A2 (i); - 6 AH is included in A2 (ii) - 2 AH are included in A1; - 5 AH are included in A2 (ii) - 16 AH are included in A1; - 1 AH is included in A2(i); - 19 AH are included in A2(ii); - 3 AH are included in A2 (iii) B5. Installation of a gate C. Tree/ Crop Impact 28

32 Impact category AHs AHs APs No Per Type of Impact Without Double Counting C1. Fruit trees and bushes C2. Wood trees C3. Decorative trees, bushes, flowers C4. Crop D. Business Impact Absol ute No Remarks - 30 AH are included in A1; - 1 AH is included in A2 (i); - 21 AH are included in A2 (ii); - 7 AH are included in A2 (iii) - 10 AH are included in A1; - 1 AH is included in A2(i); - 12 AH are included in A2(ii); - 5 AH are included in A2 (iii) - 28 AH are included in A1; - 1 AH is included in A1 (i); - 15 AH are included A2 (ii); - 6 AH are included in A2 (iii) - 10 AH are included in A1; - 5 AH are included in A2(ii); - 5 AH are included in A2 (iii) D1. Permanent with tax declaration AH are included in A2 (ii) D2. Permanent without tax declaration AH is included in A1 E. Employment Impact E. Permanent employment loss F. Vulnerability of AHs F. Vulnerable AHs G. Relocation Impact G1. Business relocation G2. Residential relocation AH are included in A1; - 8 AH are included in A2 (ii); - 1 AH is in A2(iii); - 3 AH are included in B1(i); - 1 AH is included in B1(ii); - 1 AH is included in B5-1 AH is included in A1; - 2 AH are included in A2 (ii); - 4 AHs D1-30 AH are included in A1; - 11 AH are included in A2 (ii); - 4 AH are included in A2 (iii); - 4 AH are included in B1 (i); - 4 AHs are included in B1 (v) Total Severely Affected Households 67. According to the SUDIP LARF, only households, which lose 10% or more of agriculture income and those who will be relocated from their residential buildings, are considered as severely affected and therefore, entitled to receive allowance for severely affected APs. A total of 56 AHs will be compensated as severally affected as they will lose 10%, or more agricultural income from lost fruit trees and crops from the affected land plots or/and they will face relocation. Each of AHs will receive an additional crop compensation covering 1-year yield for severe agricultural income losses. Details on impact and income restoration are presented in Chapter 7 Compensation, Relocation and Income Restoration. Table 2-14 Severity of Impact Total Degree of Impact AHs APs No No 1 AHs losing more than 10% of agricultural income

33 Total Degree of Impact AHs APs No No 2 To be relocated AHs Impact on Poor and Vulnerable Groups 68. According to the SUDIP LARF Addendum, vulnerability is defined as follows: Persons registered in the family benefit system (FBS) and receive a family allowance. Socially vulnerable persons are households who are headed by a breadwinning woman or by person entitled to the old age pension and not including other adult, working-age person with stable employment providing at least minimum monthly salary except for persons doing compulsory military service or full-time students under twenty-three years of age. Under this LARP, there are 3 AHs registered in the FBS 9. Eleven households are identified as women headed or elderly headed households. They will be compensated as vulnerable households and will receive a rehabilitation allowance amounting to 6 minimum monthly salaries. In total 18 AHs will be compensated as vulnerable. All AHs are women headed households from which 4 are elderly headed and 3 are poor AHs. Table 2-15 Impact on Poor and Vulnerable Affected Households Total Type AHs APs No No Poor AHs 5 13 Woman headed AHs Elderly headed Ahs 6 11 Total Vulnerable AHs (APs) without double counting Gender and Ethnicity of APs 69. The Census data shows that the number of female APs is 210 (54%) of the total number of APs and male 177 (46 %). Table 2-16 Gender Profile of Affected Persons Gender No % of the Total Male % Female % Total % 70. Out of 387 APs, 385 are Armenians (99.5 %) and 2 Russian (0.5 %). Table 2-17 Ethnic Profile of Affected Persons Ethnicity AH Members No % of the Total Armenian % Russian % 9 The Republic of Armenia has a social welfare program that provides benefits for the poor called the Family Benefits System (FBS). In order to receive this benefit, a family needs to apply and meet basic criteria, which are assessed in relation to household size and composition, vulnerability and income. 30

34 AH Members Ethnicity No % of the Total Total % 31

35 3 SOCIOECONOMIC INFORMATION AND PROFILE 3.1 Background 71. This Chapter presents the findings on the major socio-economic features of the affected population and community prepared from available secondary data and data collected through socioeconomic surveys and census undertaken in Project affected area covered by LARP 3. The main objective of the surveys is to understand the existing socio-economic environment and vulnerability of affected people and households in the Project area, to use the data for the preparation of the LARP 3 budget and to identify groups and persons who need additional support. 3.2 Survey Methodology 72. The socio-economic survey (SES) of affected households was conducted between May 14 and June 5, All affected APs, including owners, renters and users of affected lands and buildings, owners of permanently affected medium and small business and APs who will permanently lose employment, were surveyed through questionnaires and by telephone. (For questionnaires, refer to Appendixes 3, 4, 5, 6). Each questionnaire took minutes to complete. The collected data was processed using the SPSS 13 statistical package. There are 86 affected families in the area, of which 84 households are surveyed. This amounts to 98.8 % of the sample Household Composition and Socio-economic Classification 73. The Census identified 86 affected families with a total of 387 members. Among them 99.5% are Armenian and 0.5% are Russian. On average, there are 4.64 persons per affected household. Out of 84 surveyed head of households, 73.8% are married as compared with 41.5% of other household members. There are just 3.6% of head of households and 18% of other members who are single. Percentages of divorced head of households (6%) and other household members (3.3%) are no significant. Table 3-1 Marital Status of Heads and Members of Affected Households Marital Status AH Head AH Members Number % Number % Married Single Widowed Divorced Not applicable /minors Total

36 3.2.2 Gender 74. The SES data show that the number of female APs is 211 (54.1 %) of the total number of APs and male 179 (45.9 %). Armenian laws and the Constitution grant women and men equal rights including equal entitlement to land and property ownership, education, health care, employment, working conditions and pay, both in public and private-sector enterprises and equal individual and family rights. There is no legal distinction in property, land tenure, inheritance and business ownership rights Age 75. The age distribution of the surveyed population for LARP 3, shows the age group was most represented (34%, refer to the below Table). The profile of the youth community is even more pronounced if the two age groups (0-17 and 18-35) are combined. Such comparison shows that 66% of the population is younger than 35 years of age. Only around 6.5% are older than 65 years. The head of household age distribution indicates two statistical modes in the age categories, and Table 3-2 Age Distribution of Heads and Members of Affected Households Age AH Head AH Members Number % Number % % 98 32% % % ,9% 34 11% % 27 9% ,2% 23 8% 66 or more 10 11,9% 20 7% Total % % Education 76. The following table shows that more than 80% of household heads have a minimum of a secondary level of education. A high level of literacy (78.6% having a minimum of secondary education) is recorded among household members too. Around 21.4% of the heads of households and 18.6% of other household members have a university degree. Only a small percentage of the household members (2 %) are illiterate. Table 3-3 Education of Heads and Members of Affected Households Education status AH Head AH Members Number % Number % Illiterate % Elementary % Post-Primary % Secondary (10 Years) % High School (12 Years) % Secondary Professional % University Student (Full Time) % University Student (Distance) % University Degree % Incomplete Higher Education % 33

37 Education status AH Head AH Members Number % Number % Not Applicable % Total % Employment and Income Sources 77. Employment and income data are collected from 84 AHs and information is self-reported. During the SES, the data from one AH were could not be collected as the team could not locate the AP. All other APs participated in the survey and answered the questions. 78. More than two thirds (67.4 %) of the heads of households are employed in comparison to 32.8 % of other household members. However, there are 9.8% of head of households and 15.3% of household members who are unemployed but not looking for work. In addition, 13 out of 16 head of households who are pensioners are also employed in the private sector. The employment data for the affected households is shown in the following Tables. Table 3-4 Employment Status of Heads and Members of Affected Households Employment status AH Head AH members Number % Number % Employed % % Pensioner % % Unemployed and not looking for a job % % Unemployed and looking for a job % % Army servant % Disabled % Student, pupil % Not applicable/less than 6 years old % Total % % Civil servant Type of employment Private sector employee Self-employed, entrepreneur Employer Employed in agriculture /private/ Employed in agriculture /other/ Total Table 3-5 Type of Employment AH Head AH Member Number % Number % % % % % 5 7.6% 4 4.3% % 3 3.2% % 4 4.3% 1 1.5% % % 79. The above table shows that employment in private sector is the dominant among affected persons (43.9% of head of household and 47.9% of other household members). Working as a civil servant is the second higher type of employment among affected household members. There are 19.7% (18.2% and 1.5%) of heads of households who work in agriculture; however, half of them are employed as civil servants or in the private sector and work in agriculture is an additional after-work activity. In addition, two APs who stated work in agriculture as their occupation are pensioners. Only 4 APs stated agriculture as their main occupation. The number of other household members working in agriculture is much smaller (4.3%). Self-employment is not widely spread among the APs. 34

38 3.2.6 Income and Expenditure 80. Income and expenses were self-reported by the interviewed households. The mean monthly household income in the area was 383,142 AMD or around USD 943 at the time of the study. The main income providers in the affected households are the heads of the households (67.4% employed and further 18.5% are pensioners). Table 3-6 Self-Reported Income Sources Mean Income Type of Income AMD/month Salary 166,853 Age pension 31,421 Other type of pension 31,118 Social benefit Remittance from abroad 68,750 Remittance received within Armenia 85,000 Total 383, The average monthly expenditure for households was around 264, AMD (646$) with a largest portion (42.69 %) spent on food and drink. The next major expenses are rent in case of renting a property followed by electricity, gas and other utility charges which contribute to the monthly expenses % and 10.8% respectively. There are no major differences in spending on clothing, education, and healthcare or social obligations. On each of these items, people spend between 2.7% and 5.42% of the monthly income. The APs spend more on public transport (7.71%) than on education or healthcare for example. The monthly expenditure data are summarized in the following table Table 3-7 Average Monthly Expenses of Affected Households Average % of Self-Reported Monthly Expenses Monthly AMD Income Food and drinks 96, Private transport /including petrol/ 16, Public transport 15, Clothes 17, Healthcare (medicines, service) 10, Education (tuition fees, stationary) 14, Mobile phone bills 6, Land line bills 1, Social activities/obligations 7, Electricity, gas, internet and other utilities 21, Property rent /in case of renting 9, Agriculture Other/current expenses 44, Total 264, Perceptions of Living Conditions 82. Most of the affected properties are in a poor condition, not being sufficiently maintained or renovated for extended period of time. Only 6 APs (out of 56 answers) have another residence. There were 68 AHs who gave their perceptions on housing conditions and the surrounding area. The most cited was lack of space in current residence (48.5%), followed by conditions of door, walls and floors 35

39 (30.9%) and humidity of walls and foundations (27.9%). Furthermore, leaking roofs and luck of heating are concerns to 23.5% and 22.1% of AHs. (Table 3-8). When asked about downside of living in their suburb, a bit less than half (48.5%) of the APs stated traffic noise and noise from businesses. Other stated negative characteristic of the suburb were noise from neighbours, waste problem and crime in the area. However, the number of APs giving such statements is not significant (Table 3-9). 3-8 Housing Conditions Housing Conditions (Self-Reported) Frequency % Lack of space Lack of light Lack of heating Leaking roof Humidity Worn out windows, doors, floor APs Perceptions of the Suburb Neighbourhood Conditions (Self-Reported) Frequency % Noise/neighbours Other noise (traffic, business) Waste problem Crime Perception of the Project 83. All interviewed APs already heard about the Project (100%). Between 54.7% and 71.8 % of respondents think that main disadvantages of the project would be traffic interruption, increase in real estate prices and commercialization. It appears that these issues are more important for the APs than concerns about resettlement (20%) Around third of respondents stated loss of community territories, increased risk of traffic accidents and loss social network as project disadvantages (32.9 %, 35.1% and 36% respectively). 84. Over two thirds of respondents (75.8) thinks that in-flow of new inhabitants is a positive effect of the project. This is followed by opportunity for businesses (60%) and opening of new workplaces (50.8%).Easier access to other districts are sited as positive effects in one third of responses. Table 3-10 Affected Households' Perception of the Project Type of impact Yes Perceived Disadvantages of the Project No Number % Number % Resettlement Decrease in income Traffic interruption Worsening in road safety, increased risk of traffic accidents Increase in real estate prices Environmental impact Commercialization Loss of social network Loss of community territories

40 Type of impact Yes No Number % Number % No disadvantages Other disadvantages Total Perceived Project Benefits Opportunities for new workplaces Opportunities for business Increase of real estate prices in the area /region Better appearance of public places Inflow of new inhabitants Easier access to other districts of town No benefit Total

41 4 PUBLIC CONSULTATIONS, PARTICIPATION AND DOCUMENTS DISCLOSURE 4.1 Background 85. According to SPS (2009) and the LARF, the APs must be fully consulted and provided with opportunities to participate in the planning and implementation of LAR. Under the same principles, the APs have to be informed in an appropriate and timely manner of the outcomes of the planning process, as well as the schedules and procedures for the implementation of the LARP. A public information and consultation campaign must be carried out by the IA during all stages of the LAR process. The IA must also organize disclosure of the Resettlement Plan. Furthermore, it must inform the APs about the payment procedures for compensation and relocation. 86. This chapter describes the mechanisms for the public consultation process with the APs, disclosure of the LARP through distribution of informative material to create awareness among the affected persons of their entitlements, compensation payment procedures and the grievance redress mechanism. 4.2 Public Consultation 87. During the preparation of two Draft LARPs in 2010, the IA, with the assistance of the PPTA consultants conducted meetings and extensive public consultations with the affected communities, in addition to the day-to-day informal dissemination of information. After issuing modifications done in the Decree N 990- N on acknowledging Eminent Domain in some areas within administration of Argavand rural community, Ararat Region of the Republic of Armenia and the city of Yerevan made by the RA Government on May 26, 2011, due to which land acquisition dates have been changed, official notification letters were sent to all affected owners and renters included in Eminent Domain list. In December 2012, following the publication of changes to the GoA Decree in the Eminent Domain by which the dates of Land Acquisition were changed, official notification letters were sent to all affected owners and renters included in the Eminent Domain list. 88. In view of the design and road alignment changes made in 2012 and 2013, and the revision of the LARF in July 2012, LARP 3 required new consultations. For these reasons, fresh consultations were held on 07 th of August for 18 APs who had some issues with Cadastre certificates and on 26 th of August, 2013 for all APs. The consultations were organized in Yerevan Municipality venues and in secondary School No. 75 in Shegnavit District. Both consultations were announced in the local newspapers. In addition, all APs were notified by phone calls about the date and place of the consultation. Public consultations were held by the PIU with the assistance of DESC consultants. 89. The main goal of consultations was to inform affected persons about the project, land acquisition and resettlement framework, detailed measurement survey and assessment and evaluation methodology adopted for the project as well as of their rights and entitlements. 90. The number of participants per section as well as dates of LARP 3 consultations is summarized in the following table and the attendance records are presented in Appendix 4.1. The consultations were widely attended as 85 AHs were represented by 112 APs. 38

42 91. The main stages of the resettlement processes were presented in the meetings including the entitlements matrix, redress mechanisms, valuation methodology, measurement survey as well as various specific cases, which were discussed with APs. In addition, a map with marked land plots, buildings and structures with names of APs for each land plot and its assets, were shown to all present APs. The key questions and answers as well as key issues and concerns discussed are presented in the following tables. Questions Table 4-1 Questions and Answers Answers After we sign the contract, what will be our next step?...to lock the gates of the house, take out the property and leave? Also can we take some building materials from our house or no? If there is a shop in the affected area, what will happen? After signing the contract when will we get our compensation? Do you think 30 days are enough for relocation? Is it possible to sign the contract after receiving compensation? Is there any guarantee that we will get our compensation after signing the contract? When will they demolish the houses? In case of entrepreneurship will compensation be levied? I think a month is not sufficient at all for relocation especially for industrial enterprises, don t you think so? Is the Project final? What will happen to the structures which are very close to the road being constructed? How will vibration, noise and dust nuisances be handled? What are the criteria of the land assessment? When can we demolish and take away the structure? I have the right of ownership for my house, but my basement is not privately owned by me. How shall I be compensated? After signing the final contract and receiving compensation you will be given 30 days for relocation. Concerning building materials you can take with you whatever you want, i.e. doors, windows etc, after signing the handing act in the presence of the representative of Project Implementation Unit. It is requested not to cut trees, since the contractor may maintain the trees or replant them in another area. In case of permanent you will receive cash compensation for a year in proportion with the taxes you paid. The structure will be compensated separately. If there is an asset which needs to be relocated, transportation/relocation costs will be covered. If you have registered employees, they will get their salaries for 6 months. Before the final contract you will be given the draft contract. After that you can be sure that in a month or 45 days, the contract will be signed. After signing the contract, within 15 days, the compensation money will be credited to your bank account. One month for relocation will be counted after the money has been credited to your bank account. Construction works in the Nor Shirak Section are scheduled to commence from March to May Affected persons do not pay transaction tax or toll or registration fees, if there are any. Those amounts are either included in compensation and the affected person is obliged to pay from the compensation or the program will make those payments for the affected person. As to the dates, it s worth mentioning that according to the practice of resettlement in Armenia, 15 days maximum are given for relocation. However taking into consideration the complexity of the procedure, the PIU has extended the dates, which start from the day of receiving the money and not the signing day. However the participants were informed about their right to grievances and the way they are recorded. They were told that their grievances will be discussed by PIU and YM. AP-s will be informed of any changes that the discussions might bring about. Yes, the Project is final. There are different approaches to handle vibration, noise and dust nuisances, which will be implemented by the International Contractor and will be monitored by the Monitoring Agency. Currently we are doing surveys on vibration and noise with the purpose of mitigating the negative impacts. The assessment of the lands was based on the approaches which are in compliance with the RA Legislation and Land Acquisition and Resettlement Framework. In case of lands a method of comparison was applied. Note: Structures are not free of deductions for depreciation according to the RA Legislation, whereas according to this Project, they are free of deductions for depreciation. You can demolish the structure and take it away with you only after signing the handing act with a representative of the Project Implementation Unit. Since your basement is under a residential structure, the compensation will be made for 115%. 39

43 4.3 Information Disclosure 92. During the Census and SES, a printed Entitlement Matrix in the Armenian was distributed to all APs. During the public consultations, the PIU distributed the following brochures in the Armenian language, copies of which are presented in Appendix 7,8. i. Valuation Methodology Brochure, which included average rates for the land and structures by type; ii. Updated Project Information Brochure with the Entitlement Matrix in which the Project description, grievance redress mechanism, entitlements and compensations as well as answers to frequently asked questions were presented. 93. During the Project planning, implementation, and monitoring, the following information disclosure actions are planned: i. Establishing a field office in the affected area for prompt and effective grievance resolution and information sharing where the PIU Resettlement specialist will work on determined days; ii. Establishing and publishing a dedicated address aimed at fostering effective communication with the AP; iii. Publishing the PIU address for face-to face meetings with APs and PIU contact telephone numbers; iv. Uploading of the English version of LARP on the ADB resettlement website; v. Distribution of copies of the LARP in Armenian in Shengavit Local Community Authorities offices; vi. Developing a PIU website for disclosure of LARP in Armenian and all LARP related documents, and vii. A final Project Information Pamphlet providing a summary of the impacts, implementation arrangements and of the LARP compensation policy will be sent to all APs immediately after the final approval of the LARP (Appendix 1). 40

44 5 GRIEVANCE REDRESS MECHANISM 5.1 Background 94. LARP 3 includes in its scope the establishment of a responsive, readily accessible and culturally appropriate grievances redress mechanism capable of receiving and facilitating the resolution of affected persons concerns and grievances about the physical, social and economic impacts of the Project with particular attention to the impacts on vulnerable groups. The APs will have the right to file complaints and/or queries on any aspect of LAR. Under the adopted grievance mechanism, APs may appeal any decision, practice or activity connected with the measurement, assessment or valuation of land or other assets, its acquisition and compensation. All possible avenues will be made available to the APs to voice their grievances. The PIU will ensure that grievances and complaints on any aspect of the land acquisition, compensation and resettlement, are timely and effectively addressed. 95. The fundamental objectives of the Grievance Redress Mechanism are: i. To reach mutually agreed solutions satisfactory to both, the Project and the APs, and to resolve any resettlement-related grievance locally, in consultation with the aggrieved party; ii. To facilitate the smooth implementation of the LARPs, particularly to cut down on lengthy litigation processes and prevent delay in Project implementation; iii. To democratize the development process at the local level, while maintaining transparency as well as to establish accountability to the affected people. 96. All APs have been fully informed of their rights and of the procedures for addressing complaints during the public consultations prior to the detailed measurement, assets inventory, census and valuation of assets to be acquired. This was also obtained through careful preparation for the implementation of LARP3, by ensuring full participation and consultations of all APs, and by establishing extensive communication and coordination between the APs, the PIU, and the local authorities in general. 5.2 Grievance Procedure 97. In order to ensure that grievances and complaints are addressed in a timely, transparent and satisfactory manner, and that all possible avenues are available to APs to air their grievances, the following mechanisms have been set up. Several parties and avenues will be involved in this formal grievance redress mechanism, such as YM, PIU, and PGC. Attempts will be made to resolve complaints at the local level. However, complaints and grievances received during the resettlement phase will be addressed through the following steps and actions: Step The PIU Resettlement Specialist (RS) will accept the complaints at first instance. The complaint will be signed by the AP and it will contain the following information: (i) the nature of the complaint, (ii) the location and (iii) the complainant s complete address. If the RS cannot resolve the matter or the APs is not satisfied with the settlement offer, the case will be forwarded to the PIU other specialists for revision and possible resolution. 41

45 99. The PIU will issue a formal response no later than 30 days after the Field RS received the complaint. This response will either be an offer for compensation to the complainant, an invitation to discuss the issue further at a private meeting or an explanation for the dismissal of the complaint. If the complaint cannot be resolved at this level, or the AP is not satisfied with the resolution, the complaint should be lodged to the YM. Step If an AP does not agree with the PIU s compensation offer or reasons for dismissal, he/she should address their grievance to the YM. The AP must lodge the complaint within one month after receiving response from the PIU. The documents in support of the claim must be submitted at this stage. YM must respond to the complaint within 15 days. If no solution has been reached the YM must transfer the case to PGC for their decision. The PGC must discuss the complaint in a session. Its decision must be in compliance with the LARF provisions. Step If the complainant is not satisfied with the decision of the PGC and the person is willing to continue with the process, he/she can register/file their case in a court of law, whose decision will be final Regardless of the set grievance mechanism and procedures, APs will have the right to submit their cases to a court of law at any point in time of the grievance process. All efforts will be made to settle the issues at the PIU level through community consultation. If not possible, attempts will be made to resolve the issues at the YM/PGC to avoid/minimize litigation as much as possible. All complaints and resolutions will be properly documented by the PIU and made available for review, monitoring and evaluation purposes All complaints received and addressed will be documented regardless of the outcome. A template for recording grievance has been developed and is available to the APs when they lodge the complaint. Figure 5-1: Grievance Resolution Process Scheme AP has a complain AP lodges grievance to PIU field or main office PIU responses within 30 days AP does not accept PIU response AP lodges 2 nd grievance in 30 days to YM YM responses within 15 days AP does not accept YM response YM transfers the grievance to PGC PGC respons es AP does not accept PGC response AP applies to the court Court decision 42

46 5.3 Access to Information and Grievance Resolution Services 104. In order to maintain transparency and accountability to affected communities and to make information, assistance and grievance resolution services accessible to the Affected Persons, the PIU considered the following additional avenues: PIU Field Office 105. To become more accessible for APs field office was established by PIU in one of the local schools in Yerevan during LARP preparation stage. APs were informed about the field office operation during Public Consultations. Meetings with APs once a week have been organized starting from LARP preparation. A PIU Website 106. A website was established by the PIU at the end of September Project related documents are available on the web and will be updated regularly. Stakeholders, APs and wider community members, can post questions, opinions, and suggestions, receive answers to their questions and acquire any information about the Project. A Special In order to make Project information accessible to the wider community and APs who prefer electronic communication, the PIU created a specially designated address for the wider public to send their grievances, suggestions/ opinions/ questions etc. (verabnaketsum@yerevan.am) 10. The account will remain active for the duration of the Project, including the Defects Notification Period. Information about the account has been disseminated to the APs during the public consultations, by local authorities, through the Project information leaflet and other available means for the dissemination of information. The account is already operational. Face to Face Meetings 108. If APs cannot use any of the available avenues, an appointment for a face-to-face meeting with the PIU designated officer will be available. To make an appointment for a face-to-face meeting, the following contacts will be available to APs: Mailing Complaints PIU tel.: Contact address: P. Buzand 1/3, 5 th floor, 0010 Yerevan, Armenia The APs, stakeholders and wider public will have the option to post a letter with their complaints, concerns, opinions and suggestions to the following PIU address: Investing Projects Implementation Unit Building up of Yerevan PIU CNCO P. Buzand 1/3, 5 th floor, 0010 Yerevan, Armenia 110. Information on all available avenues will be communicated to the affected persons during the community consultations. If APs at these consultations suggest other, more effective ways of voicing their views and concerns, their proposals will be incorporated into the grievance mechanism and the public informed accordingly.. 10 Verabnaketsum means resettlement in Armenian 43

47 6 RA LEGAL AND ADB POLICY FRAMEWORK AND ENTITLEMENTS 6.1 RA Legal and ADB Policy Background RA Laws on Land Acquisition and Resettlement 111. Armenia s Constitution (1995) guarantees protection of ownership rights. It also provides that for public and state interest the ownership may be terminated in exclusive cases of Eminent Domain based on an established legislation and with prior equivalent compensation. Land acquisition and compensation cases are envisaged in Land Code Articles 102, 104, the RA Civil Code (1998), Articles 218 to 221 of RA Law On the Alienation of the Private Property for Public and State Needs adopted on 27 November Under the existing law of RA On the Alienation of the Private Property for Public and State Needs the RA Government will issue a Decree determining the case of exclusive public and state priority needs based on the request from relevant state agencies. The government decree on the recognition of an item as prevailing and exclusive public interest shall set out: i. Exclusive and prevailing public interest, for which alienation of property shall be executed ii. The party acquiring the alienated property iii. The units constituting the alienated property (addresses, location and/or other information, which makes the property different from other assets) and iv. A final deadline to launch the alienation process Law of RA On the Alienation of the Private Property for Public and State Needs specifies the land acquisition procedures and compensation rights of titled landowners and owners of immovable property in cases of alienation of their property for public purposes. Upon enactment of the government decree on recognition of property as prevailing exclusive public interest, the authorized body shall compile minutes describing the alienated property according to the procedure and deadlines defined by the government; acquiring party, owners and those holding property rights towards the alienated property may participate in the compilation of such minutes if the latter had not been compiled during the preliminary survey of the property. One copy of the minutes describing the alienated property shall be, within no later than three days after its compilation, be duly communicated to the owner and persons holding property rights towards such property, who are entitled to protest it with the authorized body and/or court within ten days after receiving the information The consideration for the land/property being acquired is established by agreement between YM and APs taking into account the market value of and damages, including consequential damages, and may include exchange of land/property. Adequate compensation shall be paid to the owner against alienation of his/her property. Adequate compensation shall be the amount 15 percent over and above the market price for the alienated property Assessment of the real estate or the real estate rights shall be made in accordance with the procedure defined under the Act of the Republic of Armenia on Assessment of Real Estate in Armenia adopted in October 4,

48 6.1.2 Asian Development Bank Involuntary Resettlement Policy under the Safeguard Policy Statement 116. The ADB Policy on Involuntary Resettlement is based on the following principles: i. Involuntary resettlement is to be avoided or at least minimized; ii. Compensation/rehabilitation provisions will ensure the maintenance of the APs pre- Project standards of living; iii. APs should be fully informed and consulted on LAR compensation options; iv. APs socio-cultural institutions should be supported/used as much as possible; v. Compensation will be carried out with equal consideration of women and men; vi. Lack of legal title should not be a bar to compensation and/or rehabilitation; vii. Particular attention should be paid to households headed by women and other vulnerable groups, such as Indigenous Peoples, and appropriate assistance should be provided to help them improve their status; viii. LAR should be conceived and executed as a part of the Project, and the full costs of compensation should be included in Project costs and benefits; and ix. Compensation and resettlement subsidies will be fully provided prior to commencement of construction physical works Comparison of RA Legislation on Land Acquisition and Resettlement and Asian Development Bank Resettlement Policy 117. RA legislation and ADB policies are outlined and compared in the following table. Table 6-1 Comparison of RA Legislation on Land Acquisition and Resettlement and ADB Resettlement Policy RA Legislation Land compensation only for titled landowners All affected houses/buildings are compensated for buildings damages/demolition caused by a Project, with the exception of unregistered commercial structures Crop losses compensation provided only to registered landowners Land valuation based on current market value plus 15% of the assessed value. Information on impacts quantification/costing, entitlements, and amounts of compensation and financial assistance are to be disclosed to the AHs/APs prior to appraisal No provision for income/livelihood rehabilitation measure, allowances for severely affected APs and vulnerable groups, or resettlement expenses ADB SPS Lack of title is not a bar to compensation and/or rehabilitation. Non-titled landowners receive rehabilitation ADB Policy includes compensation for unregistered commercial structures as well Crop losses compensation provided to all APs Land valuation based on current market rate/replacement value The same The ADB policy requires rehabilitation for income/livelihood, for severe losses, and for expenses incurred by the APs during the relocation process 118. In general, there are no basic differences between Armenian legislation and ADB policies regarding land acquisition and resettlement. However, Armenian laws and regulations are not very clear on how the rehabilitation of APs is to be achieved. Another issue is that the ADB recognizes as eligible for compensation, or at least rehabilitation, titled and non-titled owners or registered and unregistered tenants. To reconcile these gaps between Armenian legislation and ADB Policy, YM drafted the LARF for the Program, ensuring compensation at full replacement cost of all items and at least rehabilitation of informal/non-titled settlers and unregistered businesses. The LARF also provides rehabilitation packages for vulnerable or severely affected APs that will be relocated. 45

49 119. Attempts should first be made to acquire private land on the basis of negotiation with individual affected entities. Should the negotiation fail, the power of eminent domain will be sought and the expropriation process will start. In the event of a negotiated sale, the ADB requires that appropriate due-diligence is applied to ensure that APs are offered a fair price, informed, and allowed sufficient bargaining space and their case is monitored by an independent external party. These conditions are fully guaranteed by the use of an independent monitoring agency and by the Armenian Government practice of engaging independent land assessors to determine asset compensation rates Land Acquisition and Resettlement Framework Principles and Entitlements Adopted for this Multi Tranche Financial Facility 120. Based on Armenian laws and ADB s Safeguard Policy Statement (SPS), 2009, the following core involuntary resettlement principles are developed for this MFF: i. Land acquisition, and other involuntary resettlement impacts will be avoided or minimized exploring all viable alternative Project designs; ii. Where unavoidable, a time-bound LARP (such as this one) will be prepared and APs will be assisted in improving or at least regaining their pre-program standard of living; iii. Consultation with APs on compensation, disclosure of resettlement information to APs, and participation of APs in planning/implementing sub-projects, such as providing their views on design alternatives and participating in monitoring activities, will be ensured; iv. Vulnerable and severely affected APs will be provided with special assistance; v. Non-titled APs (e.g. informal dwellers or squatters, APs without registration details) will receive a livelihood allowance in lieu of land compensation and will be fully compensated for losses other than land; vi. Legalizable APs will be legalized and fully compensated for land losses; vii. Provision of income restoration and rehabilitation; viii. The LARP will be disclosed to the APs in the local language; ix. Payment of compensation, resettlement assistance and rehabilitation measures will be fully provided prior to the commencement of any construction activities on a particular package; and x. Appropriate redresses mechanisms to solve APs grievances are established. 6.2 Compensation Eligibility 121. APs entitled for compensation or at least rehabilitation provisions under the Project are: i. All APs losing land either covered by legal title/land rights or without legal status; ii. Tenants and sharecroppers whether registered or not; iii. Owners of buildings, crops, plants, or other objects attached to the land; and iv. APs losing business, income, and salaries Compensation eligibility is limited by the cut-off date which was the beginning of the AP Census and DMS (preparation of the description protocols), namely 13th April APs who settle in the affected areas after the cut-off date will not be eligible for compensation. However, they will be given sufficient advance notice, requested to vacate premises and dismantle affected structures prior 46

50 to Project implementation. Their dismantled structures and materials will not be confiscated and they will not pay any fine or suffer any sanction. 6.3 Compensation Entitlements 123. LAR tasks under the Project will be implemented according to a compensation eligibility and entitlements framework in line with both Armenian laws and regulations and ADB Policy. A summary entitlements matrix is included in the following Table. Type of Loss 1. Agricultur al land Loss Table 6.2 Entitlement Matrix Application Definition of APs Compensation Entitlements AH losing agricultural land regardless of impact severity Owners Legalizable Owner Leaseholder (community/state) Non-legalizable AHs Compensation at replacement value +15% either in cash at market rates or cadastral values (whichever is higher). When there are no active land markets cash compensation will be based on the value of the yearly product of the land for a sufficient number of years to ensure the affected parties rehabilitation for the loss of their land. Legalizable APs will be legalized and paid the same compensation as above. Leaseholder will be legalized and compensated as full owners at market rates or cadastral values (whichever is higher) or will be given a new lease. If this is not possible they will receive compensation equal to the market or cadastral value of affected land (whichever the highest) + 15% in the following proportions according to the remaining length of the lease:1) < 1 year 5%; 2) < 15 years 14% ; 3) < 25 years 20%;4)>25 years -25%. These APs will receive a rehabilitation allowance equal to 25% of the affected land market or cadastral value (whichever the highest) 2. Non- Agricultural Land loss 3. Residentia l buildings 4. Nonresidential buildings/ assets 5. Common property Loss AH losing their commercial/ residential land Community/Public Assets Owner Legalizable Owner Leaseholder (community/state) Non-legalizable AHs All AH regardless of legal status. Relocated Renters AHs with valid registration AHs with non legal buildings/structures built on the legal land AHs with non-legal buildings/structures built on the non- legal land Relocated Renters Community/State Compensation at replacement value +15% either in cash at market rates or cadastral values (whichever the highest). Same compensation as above. These AH will be legalized and compensated as full owners at market rates or cadastral values (whichever the highest) or will be given a new lease. If this is not possible they will receive compensation equal to the market or cadastral value of affected land (whichever the highest) + 15% in the following proportions according to the remaining length of the lease: 1) < 1 year 5%; 2) < 15 years 14% ; 3) < 25 years 20%;4)>25 years -25%. These APs will receive a rehabilitation allowance equal to 25% of affected land market or cadastral value whichever the highest.. Cash compensation + 15% for loss of building at full replacement cost ( not less than market value) free of depreciation/transaction costs and salvaged materials. Partial impacts will entail the compensation of the affected portion of the building plus repairs (with agreement of APs). Relocation and severe impact allowance as entitlement 9 and 10 below Cash compensation + 15% for loss of building at full replacement cost (not less than the market value) free of depreciation/transaction costs and salvaged materials. Partial impacts will entail the compensation of the affected portion of the building plus repairs (with agreement of APs). Cash compensation for loss of building at full replacement cost (to be not less than the market value) free of depreciation/transaction costs and salvaged materials. Rehabilitation allowance equal to replacement cost (free of depreciation/transaction costs and salvaged materials) minus the legalization cost, up to a maximum up to 20% of market value. Relocation and severe impact allowance as entitlement 9 and 10 below Reconstruction of lost structure in consultation with community/state authorized agency and restoration of their functions 47

51 Type of Loss 6. Crop Losses 7. Tree Losses Application Definition of APs Compensation Entitlements Standing crops affected Trees affected All AH regardless of legal status (including owners subject to obtaining legal status and residents having no residency status) All AH regardless of legal status. (including owners subject to obtaining legal status and residents having no residency status) One year crop compensation in cash at market rate by default at gross crop value of expected harvest. Cash compensation at market rate based on type, age and productive value of the trees. 8. Business or Business Employme employment loss nt Losses All AH regardless of legal status (including owners subject to obtaining legal status and residents having no residency status). Owners: (i). (permanent impact) cash indemnity of 1 year net income; (ii) (temporary impact) cash indemnity of net income for months of business stoppage up to 1 year. Assessment to based on tax declaration. In absence of tax declaration the AH will receive a rehabilitation allowance based on the maximum non-taxable salary for the number of months of business stoppage up to 1 year. The maximum non taxable salary is equal to minimum salary. Permanent Worker/Employees: Indemnity equal to: (i) Permanent job loss 6 months of average monthly salary; (ii) Temporary loss average monthly salary for the number of months of job loss up to 6 months. 9. Allowance s for Severe Impacts 10. Relocation allowance s 11 Vulnerable People Allowances 12. Temporar y impacts 13. Unforeseen LAR impacts, if any All severely affected AH with >10% AHs including informal agricultural income loss settlers and relocated or to be relocated renters Transport/transition costs All relocated AH including relocated renters AHs below poverty line or headed by Women or elderly people All AHs i) 1 additional crop compensation covering 1 year yield for APs affected by severe agricultural income losses ii) a rehabilitation allowance of 6 months at minimum salary for relocated AHs Provision of funds to cover transport costs and livelihood expenses for 1 month. Allowance equivalent to 6 months of minimum salary and employment priority in Project-related jobs Due rent and rehabilitation for temporarily affected assets will be provided. YM will consider the unforeseen resettlement impacts during Project implementation and will compensate/ rehabilitate based on the above provisions Entitlement provisions for APs losing land, houses, and income and rehabilitation subsidies include provisions for permanent or temporary land losses, buildings losses, crops and trees losses, a relocation subsidy, and a business losses allowance based on tax declarations and/or lump sums. These entitlements are detailed below: i. Agricultural and non-agricultural land impacts are to be compensated in cash at current market rates or cadastral value (whichever the highest) plus a 15% allowance. When >10% of an AP agricultural income is affected, AP (owners, leaseholders and sharecroppers) will get an additional allowance for severe impacts equal to the market value of a year s gross yield of the land lost. ii. iii. For actually possessed and used lands, which are non-legalizable, APs are to be compensated with one time self-relocation allowances in cash equal to 25% of the market or cadastral value of the affected land (whichever is highest). For actually possessed and used lands, which are legalizable, APs (if any), will be legalized and paid as titled owners. iv. Leaseholders are to be compensated based on the market or cadastral value (whichever is higher) of the affected land + a 15% allowance in proportion to the remaining years of lease as follows: i.) <up to 1 year - 5% of land value; 2) < up to 15 years - 14% of land value; 3) < up to 25 years - 20% of land value; 4) 25 years and more- 25% of land value. 48

52 v. Residential buildings/structures are to be compensated to all APs irrespective of the house registration status in cash at replacement cost (not less than the market value) plus a 15% allowance. Compensation is free of deductions for depreciation, transaction costs and salvageable materials. In case of partial impacts and unwillingness of the owner to relocate, building impacts cover only the affected portion of a building and its full rehabilitation to previous use. Relocated renters will be given all relocation and severe impacts allowances (see below). vi. Non-residential buildings/structures are to be compensated in the following ways: a. AHs with valid registration - Cash compensation + 15% for loss of building at full replacement cost (to be not less than the market value) free of depreciation/transaction costs and salvaged materials; b. AHs with non-legal buildings/structures built on the legal land As above, but without 15% allowance; c. AHs with non-legal buildings/structures built on the non- legal land Rehabilitation allowance equal to replacement cost (free of depreciation/transaction costs and salvaged materials) minus the legalization cost, up to a maximum of 20% of market value. There is no need to legalize these buildings/structures. Relocated renters will be given all relocation and severe impacts allowances (see below). vii. Crops: Cash compensation at current market rates for the gross value of 1 year s harvest by default. Crop compensation is to be paid both to landowners and tenants based on their specific sharecropping agreements. viii. Trees: Cash compensation at market rate based on type, age and productivity of trees. ix. Businesses: Permanent losses (1 year or more) will be compensated in cash equal to 1-year of net income based on tax declaration; temporary losses will be compensated in cash equal to the monthly income based on tax declaration with the number of months of business stoppage. In the absence of a tax declaration these AP will be compensated as above but based on the maximum non-taxable salary, which is 45,000 AMD (minimum salary). x. Permanent business workers and employees: receive indemnity in this amount of their average salary for lost wages for 6 months. Temporary employment losses: Indemnity for lost wages for the period of business interruption up to a maximum of 6 months. xi. Relocation subsidy: APs forced to relocate (including renters) will receive a relocation subsidy sufficient to cover transport costs and living expenses for 1 month amounting to the minimum salary (45,000 AMD). xii. Community structures: are to be fully replaced or rehabilitated so as to satisfy their pre-project functions. xiii. Severe impacts allowances: These are to be given to AH losing >10% of agricultural income (see above) or to AH relocated from residential structures (including renters). xiv. Vulnerable people livelihood: Vulnerable people (APs below poverty line and women or elder headed households) will be given a rehabilitation allowance equal to 6 months at minimum salary and employment priority in Project-related jobs. 6.4 Assessment of Compensation Unit Values 125. Assessment of the real estate or the real estate rights was made in accordance with the procedure defined under the Act on Assessment of Real Estate in Armenia. ADB methodology for assessing unit compensation values of different items is as follows: 49

53 i. Agricultural Land was valued at market rates based on a survey of land sales in the year before the impact survey. ii. Houses/Buildings were valued at replacement rate based on construction type, materials cost, labor, transport/other construction costs. No deduction for depreciation/transaction costs. If an AP does not wish to relocate, partial impacts may be paid only for the affected portion of the building or repairs. iii. Annual Crops were valued at net market rates at the farm gate for the first year crop. In the event that more than one-year compensation is due to the APs the crops after the first year are to be compensated at gross market value. iv. Trees were valued according to different methodologies depending on whether the tree lost was a wood tree or a productive tree. a) Wood trees were valued based on age category (a. seedling; b. medium growth and c. full growth) and wood value and volume; b) Fruit/productive trees were valued based on age (a. seedling; b. adult-not yet fruit bearing; and c. fruit bearing). Stage (a) and (b) trees are compensated based on the value of the investment made; stage (c) trees are compensated at net market value of 1 year income x number of years needed to grow a new fully productive tree The compensation unit rates were assessed by a certified independent evaluator based on clear and transparent methodologies acceptable to the ADB. The assessed compensation rates then were verified and certified by the PIU. 6.5 Conditions for Expropriation 127. Acquisition of land through expropriation proceedings entails lengthy procedures and often may be resisted. Such approach will thus be pursued under the Program only in extreme cases when negotiations between APs and YM fail and no alternative land is available to implement a Tranche. In these cases, however, YM will not occupy the needed plots until: (i) the proper judicial process as defined by the law is initiated; (ii) a court injunction has been obtained and properly communicated to the APs; and (iii) the compensation/rehabilitation amounts are deposited in an escrow account. 6.6 Conditions and Mechanisms for Legalization 128. In principle all occupants of untitled-plots can be legalized as long as they do not occupy areas classified as "Red Zones", the areas officially reserved for a specific public use, such as military areas, hospital areas, school areas or areas that are not ecologically fit for settlement (river beds, radioactive terrains or other dangerous or unfit lands). 11 The Law of the Republic of Armenia has set detailed procedure for legalization of legalizable assets However, the approach adopted for this Project envisaged an easier procedure for legalization of legalizable assets, which is followed by fair and equal compensation as titled assets. In case of non-titled residential buildings, the APs have to initiate the legalization process in accordance with pertinent administrative regulations. The approach of the Yerevan Municipality to the legalization issue is the following: i. In the case of affected illegal residential construction, APs will not go through the legalization procedure but will be given compensation as rightful owners (115% of the replacement cost); 11 See Land Code of the Republic of Armenia (2 nd of May,2001) article 60 50

54 ii. iii. iv. In case of affected non-residential constructions, APs will not need to go through the legalization procedure. The compensation amount will be paid at replacement value less the legalization cost; In case of legalizable affected non-titled land, APs will be legalized and paid as titled owners; In case of non-legalizable affected land, APs will be compensated with one time self-relocation allowances in cash equal to 25% of the market or cadastral value of the affected land (whichever the highest) There were some cases involving the legalization of illegal properties in the area covered by this LARP 3. Legalization of 11 properties is in the process. 51

55 7 COMPENSATION, RELOCATION AND INCOME RESTORATION 7.1 Background 131. In order to explore additional assistance to the affected households necessary for their livelihood restoration, the PIU and the Consultant conducted interviews and consultations with the APs and the relevant local authorities. Also, during the collection of data for the socioeconomic survey, APs were given the opportunity to assess their chances for restoration of livelihood with the compensation they are entitled to receive according to LARF and to suggest additional measures, which, in their opinion, would ensure, as a minimum, the same level of livelihood they had before the Project The following paragraphs outline the main impact and respective measures considered for the livelihood restoration. The Census identified 86 affected households in the area covered by LARP 3. Main impact of LARP 3 section will be on i. 53 AHs to be relocated from their place of residence; ii. 7 businesses and iii. agricultural income of 56 AHs. 7.2 Agricultural Impact 133. There are 56 AHs who lose more than 10% of income from the affected land. In the urban area the land plots are small and even a minor loss can mean more than 10% of loss of agriculture income, and as such, trigger entitlement for severely affected. Average severely affected allowance (potential agricultural income from the affected part for 12 months) is 398, ADM with minimum 8,000 and maximum 2,500,000 AMD. Only 15 land plots with orchards will be affected. Other severely affected land plots are residential plots with some crops and trees. However, all of this 15 land plots with orchards are not the main income source for this AHs. Based on the census survey only 4 AHs members stated agriculture as main occupation but still not the only source of income for the AHs However, APs use these YM land plots for growing fruit/wood/decorative trees and some vegetables planted among the orchards. Due to this fact this impact is categorized as agricultural. However, for the sake of clarity, it needs to be underlined that the notion of agricultural income loss in this frame is substantially different from the meaning of agriculture income loss in rural settings. In rural communities APs live on agriculture and it is the main source of household s income. In the affected urban areas, agricultural income is generated from cultivated vegetables or trees on normally small land pieces as supplementary to home economy or for leisure Nevertheless, in order to help APs to restore their livelihoods, 56 severely affected AHs whose agricultural income loss is more than 10% will receive allowance in addition to the compensation for the trees/crops in accordance with LARF. In addition, YM decided to provide illegal 12 Average income is less then minimum salary defined by GoA (12*45.000AMD). 52

56 land users with additional allowance in the amount of 25% of land market value to assist the restoration of their livelihoods The following tables summarize the impact, entitlements and available additional assistance to the APs by this road section. Table 7-1 Severely Affected Total Degree of Impact AHs APs No No (a) AHs losing more than 10% of agricultural income Total Table 7-2 Compensation and Assistance for Affected Persons Losing Income No of AHs Description of Loss Compensation Details Assistance Provided 56 Agricultural income loss (including for self-consumption) Compensation for all affected trees at replacement cost based on asset affected Compensation for all assets, as well as improvements done on the land Rehabilitation allowance in amount of 25% of land market value in case of illegally used land Allowance as severe affected household for crop and fruit trees losses in amount of 1 year yield 7.3 Relocation Strategy 137. Based on the LARF, all buildings partly or completely affected, will be entirely compensated. However, if a structure is a partly-affected and AH wishes to stay on the remaining plot and renovate the building to avoid relocation that is the APs choice. Relocation strategy adopted for the Project is based on the compensation at replacement cost (market value of building materials, labor, materials transportation cost and other relevant expenses) and self-relocation of AHs. In case of legal structures on the legal land, owners will receive replacement cost plus 15%. In case of illegal structures on the legal land, APs will receive compensation in amount of replacement cost. In case of illegal structures on the illegally used land plots, APs will receive replacement cost minus legalization expenses, but not more, then 20% of the total valuation amount Under this LARP there are 53 residential and 7 business relocation. In total, 58 household (without double counting) will be affected by relocation of residence or/and business. Two AHs will lose both business and residential house. Table 7-3 Relocation Impact AHs Relocation Impact No Businesses relocation (permanently affected) 7 32 APs Residential relocation No Total 58* 288 * Two AHs have both residential and business relocation 139. There are relocations of 16 AHs from 11 residential plots with some non-yet-resolved issues about the affected properties. These APs have Technical Passports for the properties, which mean that they are the only legal claimants to the property. During privatization of the lands/structures in 1990s, a document for the land/structure, with outlined properties and has written owners names, was given to APs. With such a document, they supposed to go through the procedure of privatization to obtain a full legal title for the properties. However, under this LARP, there are 11 affected land plots which the procedure was not finalised. The reasons stated by the APs are the following: (a) the 53

57 owner/inheritance owner died, and household should finish the procedure for the inheritance registration, (b) some of the owners live outside Armenia and do not have passport necessary to send Notary Authorization with which their relatives can start legalization procedure, (c) there are some mistakes in Cadastre data and it creates problems for registration of the property. All 11 cases are passed to PIU and will be solved prior or during LARP3 implementation Until the issues are solved, it is not possible to define exact area of the land per ownership status (legal, illegal) as usually APs use more land that was given to them by the Government. All these cases are accounted for in this LARP with a maximum possible impact and compensation. However, after the legalisation process is finalized, legal and illegally used area of the land will be defined and impact/ compensation updated in the compliance report prepared by independent monitoring agency (IMA) Residential Relocation 141. There are 53 AHs (266 APs) whose residential buildings/apartments will be demolished Consultations with residential relocates revealed that only 4 AHs own another residence. 2 households will be able to construct new buildings on the remaining part of their lands if they wish. Others stated that they would like to purchase an apartment/s if the amount of compensation money would be sufficient for it. This is especially relevant to the extended households where several generations live under the same roof. Analysis of the local real estate market shows, that compensation will be enough to buy another property. Particularly, (1) In case of the apartments, replacement cost was calculated based on the comparative valuation methodology: price was generated based on the comparison of the last sales of the similar apartments. (Details are presented in the attached valuation methodology). The affected multi-storied building is a typical building constructed during Soviet times and there are other similar buildings in the area. Analysis 13 of the real estate market shows, that average price per sq.m. for the apartments in Shengavit administrative district (Yerevan) is AMD (see table 7.4). At the same time, assessed average price for the affected apartments is 267, AMD per sq.m. APs will receive compensation in the amount of the replacement cost plus 15%, which will ensure, that they will be able to buy a new similar, in some cases even better apartment in the same area. Table 7-4 Comparison of the Average Price per sq.m. of the Assessed Apartments and the State Cadaster Survey for September 2013 State Assessed 15% of the Cadaster Replacement Compensation Assessed Survey Cost (Average) Price (average) (average) AMD/sq.m. AMD/sq.m. AMD/sq.m. AMD/sq.m % 255, ,500 40, ,625 (2) In case of residential houses, replacement cost was calculated based on the replacement valuation methodology, where the price was calculated taking into account all materials and labor costs as well as all the taxes paid by the construction company. In addition APs will receive compensation for the land in market value plus 15%. Comparison of the prices of the houses for sale in Shengavit real estate market shows that the average market value of 1 sq.m of residential house with land is 255,000 AMD 15 (Details are provided in the Table 7.5). On average 1 sq.m. of the affected residential buildings with land will be compensated in the amount of AMD per sq.m. Such a 13 State Cadastre implements and publishes analysis of the real estate in RA each month. 14 Real Estate Market of RA in September 2013, page 2 15 Real Estate Market of RA in September 2013, page 4 54

58 big difference is caused by the applied methodology which does not deduct amortization cost of the structures. As a result, APs receiving compensation in the amount of market value plus 15 % for their land loss and replacement cost plus 15% for the structures will be able to purchase new land 16, even bigger and with a house on it or will be able to build a new house on the purchased land. Table7-5 Comparison of the Average Price per sq.m. of the Assessed Residential Houses/Land and the State Cadaster Survey for September 2013 Assessed Assessed Market State Cadaster Replacement Value/ 15% of the Compensation Survey Cost/ Land Assessed Price (average) (average) Structure (average) (average) AMD/sq.m. AMD/sq.m. AMD/sq.m. AMD/sq.m. AMD/sq.m % 255,000* 220,000** 22, , ,300*** * including price of the land. For 250 sq.m. of the buildings 400 sq.m. of the land is considered ** only price of the structure *** includes only price for the land under the structure 143. In addition to the full replacement cost plus 15% YM, will link APs to real-estate agents/agencies for possible purchase of apartments or land/houses. APs will receive a set of appropriate allowances such as relocation allowance, rehabilitation allowance. As soon as LARP implementation starts, APs will be given a list of real estate agencies and removals agencies for households transport. The details are shown in the following table: Table 7-6 Compensation and Assistance for Residential Relocates No of AHs Description of loss Relocati on Compensation details Assistance provided Time for relocation 1. Relocation allowance covering transport costs and livelihood at minimum salary x 1 month. 58 Residential /home Selfrelocation Compensation for all affected assets at replacement cost based on asset affected. For structures replacement cost +15% 2. Rehabilitation allowance for illegally used land in amount of 25% of land market value 3. Allowance as severe affected household in amount of 6 x minimum salary 4. Link to local real-estate agencies for information and possible purchasing of residential apartment 5. Link to relocation agencies for transport of assets 6. Allowance as severe affected household for fruit trees, crops losses in amount of 1 year yield Within 45 days of receiving compensation amount Affected Businesses 144. In total 7 businesses will be affected by the Project. Three car repair stations, one petrol station, one grocery store, one cafe and one metal workshop will be permanently affected. All of the affected businesses need to be relocated due to loss of main business buildings. Four businesses are located on commercial illegally used land and three are on privately owned or rented land All business owners losing their businesses, regardless of legal status, will be assisted to restore the affected business. The approach is pure compensation and self-relocation of AHs. The 16 In this section there is no any AH that uses only illegal land for the house, but 10 land plots with 15 AHs that are now in the process of legalization. Eleven illegally used land plots identified in the impact chapter are attached to the main private land plots. 55

59 owners of the businesses that will suffer a permanent impact will be given a cash indemnity of oneyear net income in addition to compensation for all other affected assets. In addition to the compensation for the affected assets, and all allowances which should help restoration of losses, these APs will be assisted with fast registration of new businesses and linked with relocation and real estate agencies in the area as well as with training centers for business administration and management if required Employment loss 146. Due to the permanent business closure, 5 employees will permanently lose their employment. Four of them work on the petrol station and one in the metal workshop. They will be compensated in the amount of their average salary for 6 months of business stoppage. Table 7-7 Compensation and Assistance for Businesses No of AHs 6 with tax declaration 1 without tax declaration Description of Loss Business loss due to building demolition Business loss due to building demolition Compensation Details Assistance Provided Additional Assistance Permanently Affected Businesses Annual net income Compensation for all compensation affected assets at Business registration replacement cost based on costs asset affected Allowance covering transport costs Compensation for all affected assets at replacement cost based on asset affected Allowance for income loss in amount of 12 x of minimum salary Allowance covering transport costs Rehabilitation allowance for illegally used land in the amount of 25% of land market value 1. Fast track to register new business 2. Link to local relocation agencies for transport of affected assets 3. Link to local realestate agencies for possible purchasing / renting of new business location in the area 4. Link to centers for business administration and management trainings Time of Reloc ation Within 6 weeks of signing of contract 56

60 8 RESSETLEMENT BUDGET 8.1 Background 147. This chapter describes the methodology adopted for the determination of unit rates, cost of LAR and compensation that will be paid to APs for resettlement impacts caused by the T1 LARP 3 section. The compensation entitlements of different categories of APs presented in this chapter have been defined according to the principles adopted in the LARF. The compensation rates were determined by a certified independent evaluator using transparent methodology that was accepted by the ADB, the PIU/YM and GoA (for the details see Appendix 2). The LARP 3 budget is summarized at the end of the chapter. 8.2 Sources and Allocation of Funds 148. LARP 3 preparation and implementation costs, including compensation and administration costs will be financed from the following sources: i. Compensation for the land and other land acquisition expenses, including taxes, duties, fees, and transaction costs as well as rehabilitation allowance for illegal usage of land that belongs to YM will be financed from the funds provided for this project within Yerevan Community budget. ii. Taxes, fees, and transaction costs related to non-land losses, including transaction costs related to allowances will be covered by the co-financing part of the RA state budget. iii. Compensation for the remaining assets as well as allowances will be covered by RA state budget, from the loan provided for this project The PIU should undertake measures to request funds from the relevant financing sources needed for implementation of LARP 3 and timely allocate them to APs transferring to the AP's individual account opened in his/her name in a commercial bank operating in the RA. 8.3 Compensation for Acquired Land Valuation Approach 150. According to the LARF, land owners, leaseholders, land users subject to legalization will receive compensation for the affected land. YM decided to provide Illegal users with livelihood restoration/rehabilitation allowances for the affected land. The compensation details are presented in the following table. Table 8-1 Compensation/ Rehabilitation Allowances for Agricultural and Non-agricultural Land Owner Land user subject to legalization Illegal land user Replacement cost + 15% Replacement cost + 15% (after legalization) 25% of the replacement cost Leaseholders for the remaining years of lease Up to 1 year - (replacement cost +15%) * 0.05 Up to 15 years - (replacement cost +15%) * 0.14 Up to 25 years - (replacement cost +15%) * years - (replacement cost +15%) *

61 151. The basis for the compensation and rehabilitation allowance calculation is the market price of the land. The market value of the land was assessed by using a comparative evaluation method. The comparative method 17 is based on the comparison of reliable, market information on the sale of similar plots (at least three sales examples). Based on this method, the adjusted average sale price of recently sold lands (within the same location and the same/similar application purpose/features) is determined. The price for each land plot is determined separately as many factors influence the differences in land price even for the adjusted land plots. (For detailed valuation methodology, please see the Appendix 2) Compensation to Legal Land Owners 152. The compensation to be paid to legal land owners was calculated at replacement cost plus addition of 15% which is in accordance with the RA Law on Eminent Domain. The total cost for the compensation to legal landowners is 435,671, AMD. Land Category Land Plots Table 8-2 Land Compensation for Private Land Affected Average Total Land Cost Area Unit Price Total Land Compensation (including 15%) No m2 AMD/ m² AMD AMD (A) Legal Properties Residential 26 10, , ,405, ,966, Commercial , ,160, ,384, Industrial 2 2, , ,908, ,844, Subtotal (A) 30 13, ,474, ,195, (B) Properties in the Process of Legalization Residential 11 4, , ,370, ,475, Total (A+B) ,844, ,671, Compensation to Land Leaseholders 153. Leaseholders compensation was calculated based on the market value of the affected land plot, and increased by 15% in the following proportions based on the remaining years of lease: i) < 1 year 5%; 2) < 15 years 14%; 3) < 25 years 20%; 4) > 25 years 25%. The total compensation to be paid to 1 leaseholder is 1,535, AMD. Land Category Land Plot Affected Area Unit Price Table 8-3 Compensation for Leases Market Value of the Land Market Value +15% Leaser Remaini ng Years Applied Coeffici ent Total for Compensation No. m² AMD/ m² AMD AMD No. % AMD Industrial , ,341,810 6,143, ,535, Total ,341,810 6,143, ,535, RA Law on Real Property Assessment, Article 11 58

62 8.3.4 Rehabilitation Allowance for Illegally used Land 154. The rehabilitation allowance for illegally used land will amount to 25 % of the market value of the land. In total 43,298, AMD for 8, m² will be paid to illegal users of Yerevan Municipality community land as a rehabilitation allowance for their livelihood losses. Land Category Table 8-4 Rehabilitation Allowance for Illegally Used Land Land Plots Affected Area Average Unit Price Total Land Cost Total Rehabilitation allowance (25% of the Land Cost) No m2 AMD/ m² AMD AMD Residential 14 1, , ,758, ,189, Orchard 17 4, , ,782, ,445, Commercial 8 1, , ,532, ,633, Non residential , ,096, , Industrial , ,021, ,505, Total 43 8, ,192, ,298, Compensation for Buildings, Structures and Improvements Valuation Approach 155. The compensation for alienated structures was calculated for both, the owners of legal structures and the users of illegal ones. For each group, LARF defines a special approach for the calculation of compensation. The general approach is presented in the following table. Legal and non-legal residential structures Table 8-5 Compensation for Residential and Non-Residential Structures Legal non-residential structures Non-legal nonresidential structures on legal land Non-legal nonresidential structures on non-legal land Replacement cost +15% Replacement cost +15% Replacement cost Replacement cost minus 20% for legalization expenses 156. The replacement costs for buildings and structures was determined by calculating the construction cost of similar new buildings/structures, for the same use and materials, or a substitute that meets modern requirements, based on market prices as of the assessment date. (For detailed valuation methodology, please see the Appendix 2) Residential Buildings 157. In total, 1,352,944, AMD for affected buildings and structures with an area of m² will be paid to owners and non-legal users of buildings and structures as a result of land acquisition. One AP will lose car access to his place of residence. He will be paid AMD to install a new gate from the other side of the land. 59

63 Name Material No Table 8-6 Compensation for residential structures Total Average Unit Price Total Cost Total Compensation m2 AMD/m2 AMD AMD A. Apartments Apartment Stone , ,466, ,486, Basement Stone , ,634, ,823, Storage hole Soil , , , Unfinished structure Stone , ,015, ,808, Toilette Block , , , Subtotal (A) ,562, ,559, Residential house Stone, Stone/Concrete, Stone/Metal B. Houses , ,164, ,048,989, Subtotal (B) , ,164, ,048,989, C. Supporting Structures C1. Supporting Structures with Affected Main Building Animal stoke Stone , ,892, ,626, Basement Concrete , ,584, ,922, Garage Stone , ,753, ,415, Greenhouse Glass , ,498, ,872, Hencoop Stone , ,549, ,231, Hole/Storage hole Stone , ,322, ,520, Loft Metal , ,635, ,030, Mansard/Split level Stone, Metal , ,302, ,147, Non working shop Stone , ,719, ,277, Patio/bac patshgamb Metal , ,682, ,235, Pool, swimming pool Stone, Concrete , ,390, ,599, Shed Metal , ,096, ,760, Storage Metal, Stone , ,100, ,416, Summer kitchen Stone , ,269, ,760, Support Structure Stone, Block, Concrete, Wood , ,674, ,075, Toilette Sone, Wood , ,222, ,555, Subtotal (C1) ,694, ,449, (C2) Support Structures of HHs without Residential Loss Greenhouse Metal , , , Non working shop Block , ,707, ,713, Pool, swimming pool Stone , ,555, ,938, Shed Metal , ,492, ,866, Support Structure Stone, wood , ,148, ,620, Subtotal (C2) ,606, ,947, Subtotal (C1+C2) 118 2, ,301, ,396, Total (A+B+C) 170 6, ,027, ,352,944,

64 Table 8-7 Compensation for renovation Unit Price Total Name No Compensation AMD AMD Gate 1 450, , Total 1 450, , Non Residential Buildings 158. In total, 184,124,854 AMD for 33 affected buildings and structures with an area of 1,027.7 m², will be paid to owners and non-legal users of buildings and structures as a result of land acquisition. No Type of Structure Table 8-8 Compensation for Non -residential Buildings Unit No Price Mater ial Legal sq.m Illegal sq.m Total sq.m. A. Non Business Structures Total Cost Total Compensation AMD/m2 AMD AMD 1 Shed Metal ,400 61,600 49,280 Support Storage 3 Structure Block , , ,324 Storage Hole Soil , , ,400 4 Car Repair Man Hole (For Private Stone , , ,080 5 Garage Stone ,700 3,321,324 3,195,900 Busin ess No 1 Busin ess No 2 Busin ess No 3 Busin ess No 4 Busin ess No 5 Busin ess No 6 Subtotal (A) ,355,456 4,138,984 B. Business Structures Non-Operating Shop Stone ,700 12,089,023 11,263,282 Shed Metal/ Stone ,300 1,568,054 1,254,443 Shed Metal , , ,734 Petrol Station Stone ,100 13,618,230 15,660, Stand-Alone Eating Room Stone ,900 3,569,499 3,202,650 Shed Metal , , ,520 Workshop Stone ,100 1,410,828 1,365,972 Toilette Stone , , ,524 Structure Wood , , ,770 Structure Stone ,400 5,522,888 5,372,654 Shed Metal ,400 1,157, ,725 Workshop Metal ,700 22,787,650 26,205,798 Workshop Stone ,700 5,149,980 5,922,477 Car Repair Man- Hole Stone , , ,376 Shed Metal ,400 89,320 71,456 Stairs Stone , , ,712 Car Repair Station Stone ,800 39,735,680 45,696,032 Garage/Car Repair Station Stairs Car Repair Man- Hole Stone ,400 8,561,280 9,845,472 Metal/ Concr ete , , ,719 Stone , , ,

65 No Busin ess No 7 Busin ess No 8 Type of Structure Mater ial No Legal sq.m Illegal sq.m Total sq.m. Unit Price Total Cost Total Compensation AMD/m2 AMD AMD Grocery Stone ,300 9,200,535 8,628,405 Shed Metal ,400 82,236 65,789 Shop Stone , , , Non-Operating Shop Stone ,600 15,901,120 18,286,288 Non-Operating Bakery Stone ,900 18,339,223 21,090, Guard Post Stone , , , Shed Metal , , ,021 Basin/Decorative Stone , , ,352 Subtotal (B) ,161, ,985, Total (A+B) , ,517, ,124, Fences and Other Improvements 159. All improvements done by APs, regardless of their status, are subject to compensation. Improvements such as areas, covered with concrete bricks, asphalt will be compensated at replacement cost. In total 26,388, AMD will be paid for different types of improvements. Compensation for affected fences amounts to 28,278, AMD. Material Length Area Table 8-9 Compensation for Fences Unit Price Market Value Compensation for Legal (Market Value + 15%) Compensation for Illegal (Market Value Minus Total for Compensation m m² AMD/m AMD AMD AMD AMD Metal A ,300 1,823, , ,305,850 1,525, Metal B , , , , , Tuf/Stone A ,000 3,589,120 3,517, ,512 3,941, Tuf/Stone B , ,380 1,033, ,033, Tuf/Stone C ,000 1,041,600 1,197, ,197, Tuf/Stone D ,400 3,046,582 3,458, ,416 3,489, Tuf/Stone E ,400 2,314,196 2,661, ,661, Tuf/Stone F ,400 8,413,460 9,675, ,675, Tuf/Metal , , , , Reinforced Concrete ,000 3,174,400 3,650, ,650, Slabs/Stone Reinforced A Concrete , , , , Slabs/Stone Total B , ,490,338 25,912, ,366,104 28,278, Table 8-10 Compensation for Other Improvements Type Material Plots Area Unit Price Compensation No m² No AMD AMD Area Asphalt , ,838, Area Concrete Covered 40 2, , ,763, Area Concrete Bricks , ,382, Area Slab , , Brick Furnace Brick 1-2 1,500, ,000,

66 Type Material Plots Area Unit Price Compensation No m² No AMD AMD Gate Metal , , Fireplace Brick , , Tandoor Brick , , Brazier Brick , ,000, Door Metal , , Total 46* ,388, * There are several types of improvements on the same land plot 8.5 Compensation for Crops and Trees Crops 160. Crop compensation will be paid in cash at market rate at the gross crop value of the expected annual harvest. The unit rates were determined based on the yield and prices of major crops for 5 years period. Total crop compensation is 306,134 AMD. Type of Crop Table 8-11 Compensation for Crops Annual Affected Total Productivity Area Loss Price Sum kg/ m² m² kg AMD/m² AMD Sweet Potatoes Strawberry Bean Tomato Greens Potato Garlic Eggplant Pepper Onion Melon Total , Fruit Trees 161. Compensation for fruit trees is different for productive, not yet productive trees and seedlings: i. Fruit bearing trees: compensation at replacement cost for lost income based on the net market value of one year s income multiplied by the number of years needed to grow a fully productive tree. ii. Not-yet-fruit-bearing trees: regardless of their age these trees will be compensated at replacement cost of productive inputs for the number of years needed to grow a tree to the productive age. iii. Seedlings: compensation for the market value of the seedling 162. In total 145 fruit bushes seedlings and 318 fruit trees seedlings will be compensated in the amount of 587,500 AMD. 363 not-yet productive trees will be compensated in amount of 63

67 1,474, AMD. Fruit bearing trees and bushes will be compensated in amount of 101,856, AMD. The particulars of compensation for the affected seedlings and fruit-bearing trees are summarized in the following tables. Table 8-12 Compensation for Seedlings Type Unit Cost Trees Total Compensation AMD/tree No AMD A. Fruit Bushes Fig 2, , Grape , Currant , Hazelnut 2, , Subtotal(A) , B. Fruit Trees Cherry 1, , Peach 1, , Walnut 2, , Mulberry 2, , Apple 1, , Apricot 2, , Sweet cherry 1, , Cornel 2, , Almond 2, , Pomegranate 3, , Plum(shlor) 2, , Plum 1, , Quince 1, , Pear 1, , Cherry-plum 1, , Tangerine 3, , Subtotal(B) , Total (A+B) , Table 8-13 Compensation for Not Yet Productive Trees and Bushes Type of tree Unit Cost Trees Total Compensation AMD/tree No AMD A. Fruit Bushes Raspberry 1, , Fig 7, , Grape 6, , Currant 1, , Hazelnut 14, , Dewberry 1, , Subtotal(A) , B. Fruit Trees Cherry 5, , Wallnut 14, , Mulberry 7, , Apple 8, ,

68 Type of tree Unit Cost Trees Total Compensation AMD/tree No AMD Apricot 10, , Sweet Cherry 3, , Cornel 6, , Dwarf Apple 8, , Plum(shlor) 8, , Plum 6, , Quince 10, , Pear 9, , Oleaster 9, , Subtotal(B) , Total (A+B) ,474, Type of tree Table 8-14 Compensation for Fruit Bearing Trees and Bushes Years to Annual re-grow to Unit cost Affected Unit cost yield productive per tree trees level Total compensation kg AMD/kg No AMD No AMD A. Fruit Bushes Raspberry , ,680, Fig , ,110, Grape , ,103, Currant , ,061, Rose-hip , , Hazelnut , , ,120, Dewberry , ,486, Subtotal(A) , ,571, B. Fruit Trees Cherry , ,323, Peach , ,296, Walnut , , ,841, Mulberry , ,936, Apple , ,611, Apricot , ,930, Persimmon , , Sweet Cherry , ,048, Cornel , , Dwarf Apple , , Almond , , , Pomegranate , ,316, Plum(Shlor) , ,906, Plum , ,312, Quince , ,697, Pear , ,392, Oleaster , , Cherry-Plum , , Subtotal(B) ,285,

69 Type of tree Annual yield Unit cost Years to re-grow to productive level Unit cost per tree Affected trees Total compensation kg AMD/kg No AMD No AMD Total (A+B) , ,856, Wood Trees 163. The compensation for wood trees is different for seedlings, medium growth and fully grown trees: i. Seedlings: compensation at replacement cost of productive inputs. Seedlings are defined as trees with a diameter up to 12 cm. ii. Medium and fully-grown trees: compensation at replacement cost of wood value of the tree to be calculated based on the volume of the wood. Medium growth trees are defined as trees with a cm diameter and fully grown trees as those with a diameter greater than 22 cm Wood trees compensation amounts to 63,420 AMD for seedlings, 276,150 AMD for medium growth trees, as well as 3,484,950 AMD for fully-grown trees with an overall total compensation of 3,824,520 AMD, as indicated in the Table Decorative Trees and Bushes 165. Compensation for decorative trees, bushes as well as flowers was calculated based on the replacement cost. In total 3,220,400 AMD will be compensated (Table 8-15). 66

70 Table 8-15 Compensation for Wood Trees Seedling (up to 12 cm diameter) Medium growth (13-22cm) Full growth (22cm+) Total Type No Unit cost Diameter Subtotal No Unit cost Diameter Subtotal No Unit cost Diameter Subtotal No AMD AMD sm AMD AMD sm AMD AMD sm AMD Acacia 2 2, , , , ,860 Ailanthus 5 2, , ,550 Salix 5 2, , ,550 Caprea , , , , ,850 Poplar , , ,260 Ulmus 5 2, , , , , ,152, ,170,560 Maple , , ,160 Ash Tree Willow , , , , , , , , , , , , , , , , , , , , , , , , ,890 Oak Tree 1 1, , ,890 Cercis 1 2, , ,310 Total , , ,484, ,824,520 67

71 Type Unit price AMD/ tree Table 8-16 Compensation for Decorative Trees and Bushes Small Medium Large Total Trees No Compensation AMD Unit price AMD/ tree Trees No A. Decorative Flowers Compensation AMD Unit price AMD/ tree Trees Compensation Trees Compensation No AMD No AMD Flowers 96 sq.m ,000 Lawn 22 sq.m ,000 Peony , , ,200 Iris , ,200 1, ,400 Chrysantemum , ,200 Lily , , ,000 Chamomile , ,000 Canna Sisimbrium , ,000 Alepes Calla Subtotal (A) , ,200 1, ,600 B. Decorative Bushes Rose Oble , , ,300 Climbing Rose , ,500 3, , ,000 Wild Grapes ,250 1, , ,750 Box Tree ,500 1, ,000 2, , ,500 Paliurus Spina-Christi , ,750 Sweetheart Rose , , ,000 Forsythia , , ,000 Jasmin , , ,000 Tea Rose , ,000 1, , ,000 Tecoma , ,000 1, , ,000 Hedera Helix , , ,000 Yucca 1, ,000 1, ,000 1, , ,000 68

72 Type Unit price AMD/ tree Small Medium Large Total Trees No Compensation AMD Unit price AMD/ tree Trees No Compensation AMD Unit price AMD/ tree Trees Compensation Trees Compensation No AMD No AMD Bengamin , , ,000 Gooseberry , , ,000 Thuja Occidentalis F , , ,000 Globosa Genista , , ,000 Symphoraiarpos , , ,000 Humulus Lupulus , , ,000 Lycium Barbarum , ,000 2, , ,000 Amorpha Fruticosa , , ,000 Subtotal (B) , , ,431,000 1,337 1,867,300 C. Decorative Trees Silver Fir , , ,000 Fir 15, , ,000 Lilac ,000 1, ,000 2, , ,500 Thuja , ,000 9, , ,000 Juniperus Virginian , , ,000 Pine 3, , ,000 Juniper , , ,000 Subtotal (C) , , , ,500 Total ,150-1,342 1,104,550-1,716 1,862,700 3,158 3,220,400 69

73 8.6 Compensation for Business and Income Losses Business Losses 166. All the businesses will be permanently affected. Six of 7 businesses have submitted tax declarations and the assessment was based on the tax declaration of the affected business. The base unit cost for the losses of businesses with tax declarations are calculated based on 1 year s net income. One business did not submit tax declaration and the compensation was calculated based on the minimum salary for 12 months The compensation for businesses amounts to 4,384, AMD, including registration costs. Type of Business Business Table 8-17 Compensation for Business Losses Income months Net monthly income Net annual income Total Registra tion costs Total compensatio n including registration No No AMD AMD AMD AMD AMD Permanently Affected With Tax Declaration Business n.a. 267, ,600 3, ,600.0 Business n.a. 321, ,288 3, ,288.0 Business n.a. 904, ,000 3, ,000.0 Business n.a. 1,525,016 1,525,016-1,525,016.0 Business n.a. 600, ,000 3, ,000.0 Business n.a. 211, , , ,899.6 Permanently Affected Without Tax Declaration Business * n.a n.a 540,000.0 Total ,369, ,384, * For Permanently affected businesses without tax declaration compensation is provided based on minimum salary Employment Losses 168. There are 5 permanently affected business employees in the affected area. They will receive a rehabilitation allowance equivalent to a monthly average salary for 6 months. Total compensation for employment loss is 2,761, Table 8-18 Compensation for Employment Loss Loss Number of Average Months Employees Unit Cost* Total/ AMD Permanent Employment Loss Affected , ,761, Total ,761, *Note: The average monthly salaries were calculated for each individual. Here the average is presented. 70

74 8.7 Rehabilitation Allowances Severe Impact Allowances 169. Under LARP 3, additional crop compensation covering 1-year s yield will be paid to severely affected households. A total of 56 AHs are severely affected losing more than 10% of the agricultural income and 53 are severely affected loosing place of residence. All AHs will be compensated accordingly. The total compensation for all severely impacted AHs amounts to 37,005, AMD. The details are presented in following table. Table 8-19 Allowances for Severely Affected Households Category No of AHs Unit Cost Total Severely AHs losing more than 10% of agricultural income ,283,996* 22,695, Severely Affected Hs to be relocated ,000 14,310,000 Total ,005, * The allowance was calculated individually for each AH. The unit costs in this table represent the average amounts. AMD Allowances to Vulnerable Groups 170. Additional allowances are allocated for vulnerable groups, particularly for AHs headed by women, elderly as well as poor AHs. Such allowance amounts to the equivalent of 6 months minimum salary 45,000 AMD). The total allowance to be paid to vulnerable 18 AHs amounts to 4,860,000 AMD. Table 8-20 Allowances to Socially Vulnerable People Allowance Type No Amount a. Poor AHs (are also woman-headed AHs mentioned in (b) b. Woman-headed AHHs c. Elderly-headed AHHs (are also woman-headed AH mentioned in (b) Total Total ,000 4,860, Relocation Allowances 171. The relocation allowances were calculated taking into account the costs that will be incurred for the transportation of movable assets. Transportation costs were determined according to the average cost for such services offered by several freight shipping organizations accepted in the market. It was calculated in such a manner so as the AP can move his/her property within a 20 km. radius. The allowance was calculated for all APs that need to relocate their assets. In total 4,300,500 AMD will be paid for the relocation of the assets of AHs. 845,250 AMD will be paid for relocation of movable structures. Table 8-21 Transportation Costs for Movable Assets Type of allowance Trips required Unit rate Total No AMD AMD Transportation costs, big gabarites , ,300, Total 122-4,300,

75 Table 8-22 Livelihood expenses for relocated AHs Type No of AHs Unit Rate Total Livelihood restoration allowance 53 45,000 2,385,000 Total 53-2,385,000 Type of affected structures Table 8-23 Transportation Costs for Movable Structures Construction type Buildings Affected Surface Unit cost Trip Total for compensati on No m² AMD No AMD Kiosk Metal , Kiosk Wood , Metal house Metal , Garage Metal , Movable Shed Metal , Petrol Dispenser Point Metal , Petrol Tank Metal , Total , Registration Costs 172. Under the LARF there will be no deductions from the compensation paid to APs. During the singing of acquisition contracts and the re-registration of properties, certain mandatory fees and taxes are payable according to RA legislation. All fees are lump sums of different amounts based on the category of land (residential or agricultural) and structures (residential, or non-residential). The particulars of the payable registration fees and duties are presented in the valuation methodology. The following fees and taxes are payable under the a Armenian laws: i. Fee for the state registration of rights to the real estate unit, changes in rights and delegation 18 ; ii. Fee for the provision of a common certificate of a real estate unit 19 ; iii. State duties for the registration of real estate 20 and of real estate alienation contracts 21 ; iv. Notary service fee for the ratification of real estate division contracts and of real estate alienation contracts 22 ; v. VAT 23 for the acquisition of industrial and commercial properties, including lands and buildings. The deals less than 58,350,000 AMD are not taxed. Taxation of the deals exceeding 58,350,000 AMD shall be 20% of the part exceeding 58,350,000 AMD. 18 State Registration of Rights To The Property Act. 19 Ibid 20 State Duties Act. 21 Ibid. 22 Study Of Services Of Notary Offices 23 Buy/sell transactions by a physical person who is not a sole entrepreneur, in some cases are considered goods supply and are taxed by Value Added Tax (VAT) equal to 20% of the goods/property value. Particularly, it refers to the acquisition of the property (production, other trade and public importance property, including buildings and structures, property and lands of industrial, earth interior and other production importance,) belonging to a person and subject of the entrepreneurial activity. Article 6, RA Law on VAT. 72

76 Land/ building category per Cadastre Certificate Residential Cadast re fees Cadast re commo n certific ate Table 8-24 Fees for Property Registration State registr ation fee for remai ning part Address registrat ion fee for the remainin g part State sales contract registrat ion for affected part Sales notary fee Cadastr e fees for the remaini ng part SubTotal (Registrat ion Cost per 1 Property) N Total Registrat ion 25,000 10,000 1,000 15,000 20,000 17,000 25, , ,000 25,000 10, ,000 17,000-72, ,304,000 Public 25,000 10,000 1,000 15,000 40,000 17,000 25, , ,000 Development (Commercial) 25,000 10, ,000 17,000-92, ,000 Residential/ 25,000 10,000 1,000 15,000 20,000 17,000 25, , ,000 problematic cases 25,000 10, ,000 17,000-72, ,000 Total ,387, In total 4,387,000 AMD will be paid for registration of the properties. 23,630,852 AMD VAT will be paid for affected properties. Table 8-25 Value Added Tax for the Affected Properties Compensation Property Type per Cadaster VAT (AMD) Amount Public Development (Commercial) 33,769,795 6,753,959 Industrial 33,828,555 6,765,711 Public Development (Commercial) 50,378,891 10,075,778 Public Development (Commercial) 177,019 35,404 Total - 23,630, Budget Summary 174. The total implementation cost of LARP 3 for the Project amounts to 2,858,339, AMD which is equivalent to USD 7,003, as shown in the following table. The Yerevan Municipality will ensure that the compensation funds for land acquisition and resettlement are approved by all sources and allocated in time for implementation of this LARP The LARP 3 budget also includes miscellaneous expenses for administrative costs that will be incurred during the implementation of LARP 3. This expense has been estimated and included in the budget as a single lump sum. Item Table 8-26 Budget Summary Source of Finance I. Compensation Budget, Including Allowances Total/AMD Total/USD Compensation for private land (Including 15% surcharge) YM 435,671, ,067, Compensation for Leases YM 1,535, , Rehabilitation allowance for illegally used land YM 43,298, , Compensation for residential buildings ADB Loan 1,352,944, ,315, Compensation for not residential buildings ADB Loan 184,124, , Compensation for renovation cost ADB Loan 450, , Compensation for fences ADB Loan 28,278, , Compensation for improvements ADB Loan 26,388, , Compensation for crops ADB Loan 306,

77 Item Source of Finance Total/AMD Total/USD Compensation for fruit trees and bushes seedlings ADB Loan 587, , Compensation for not yet productive trees and bushes ADB Loan 1,474, , Compensation for fruit bearing trees ADB Loan 101,856, , Compensation for wood trees ADB Loan 3,824, , Compensation for decorative trees and bushes ADB Loan 3,220, , Compensation for business losses ADB Loan 4,384, , Compensation for employment loss ADB Loan 2,761, , Allowances to severely affected households ADB Loan 37,005, , Allowances to socially vulnerable people ADB Loan 4,860, , Transportation costs for movable assets ADB Loan 4,300, , Livelihood expenses for relocated AHs ADB Loan 2,385, , Transportation costs for movable structures ADB Loan 845, , Fees for registration services GoA 4,387, , VAT GoA 23,630, , Sub-Total I 2,268,523, ,558, Direct administration costs [5% of Sub-Total) II. Administrative Costs ADB Loan (83.33%) 94,518, , GoA (16.67%) 18,908, , Sub Total II 2,381,949, ,836, Contingency 20% ADB Loan 370,903, , YM 96,101, , GoA 9,385, , Total LAR Budget 2,858,339, ,003, Exchange rate on Feb 1,2014, Central Bank of the Republic of Armenia: (USD) 1USD= AMD 176. Table below presents the budget summary per source of financing. Table 8-27 Budget Summary per Source of Financing Source of Finance AMD USD Yerevan Municipality 576,606, ,412, ADB loan 2,225,421, ,452, State Budget 56,311, , Total 2,858,339, ,003,

78 9 INSTITUTIONAL ARRANGEMENT 9.1 Background 177. Planning and implementation of the LAR activities involve distinct processes and dynamics of different actors. This chapter will present the details on all the parties and their roles during the LAR activities. 9.2 Core Agencies and Organizations Asian Development Bank 178. The Asian Development Bank (ADB) will be the funding agency of the Project. In addition to funding, ADB will periodically review the Project and LARP implementation as well as provide clearance to contract awards and signing/initiation of civil works on the Project The RA Ministry of Economy 179. The RA Ministry of Economy is the executing agency (EA) for the project. It implements general functions for the Program including cross-agency coordination The Municipality of Yerevan and Project Implementation Unit 180. The Municipality of Yerevan (YM) has the overall responsibility for the Project. This includes preparation, implementation and financing of all LAR tasks and cross-agency coordination. YM exercises its functions with respect to the Project through the Project Implementation Unit. The PIU Resettlement Specialists (RS) is responsible directly to the PIU head for the general management of the planning and implementation of all LAR tasks The RS will be responsible for: (i) cooperation with cadastral services; (ii) assisting the consultants in mapping, surveying and title verification activities; (iii) issuing the LARP to ADB for review, (iv) disclosing the LARP; (v) planning and management of LARP implementation and the distribution of compensation; (vi) assisting in case of complaints; (vii) ensuring proper internal monitoring. The SRS will also provide all needed documentation to ensure the prompt allocation of LAR budgets to the APs and will maintain the coordination of all LAR related activities. In addition, the PIU RS will serve as a liaison between the resettlement specialists of PMIC and the DESC, YM, PGC, EA, the State Cadastre, ADB and will develop and maintain direct relationships with government authorities with respect to LAR tasks. Depending on the scope and complexity of works during the LARP 3 implementation, the PIU will engage more specialists when required A Project Governing Council (PGC) is made up of representatives from the YM, concerned ministries and chaired by PA Prime Minister. It has been established to oversee the Project and in accordance with regulations approved by RA Prime Minister's Decree No 892-A as of October 26, 2009 to make decisions based on its vested right, including resolving high profile AP grievances or serving as a final decision making body for AP grievances, short of their being referred to the Courts. 75

79 Figure 9-1 Land Acquisition and Resettlement Organogram and Actions ADB Ministry of Finance Ministry of Economics Executing agency PGC PMIC Assisting agency Court Municipality of Yerevan/ PIU Implementing agency Resettlement Specialist State Committee of Real Estate Cadastre IMA DESC (Consultants) Assessor DMS and Asset valuation Functional role Approval Finances Complaints & grievances APs Consultants 183. Different consultants have been involved in the preparation and implementation of LARP 3: i. PPTA Consultants: This included international and local LAR capacity and needed survey teams who carried out all the field-surveys and assisted the EA to prepare the Draft LARPs as part of the sub-project feasibility study during ii. Detailed Engineering and Construction Supervision Consultant (DESC) - includes international and local LAR capacity and survey teams which carried out activities necessary for updating/finalizing of this LARP. DESC will assist in the overall supervision of the Tranches with respect to LAR activities. iii. The Project Management and Institutional Strengthening Consultant (PMIC) The PMIC tasks include revision and verification of the implementation-ready LARP, its compliance with the SPS (2009) and the LARF approved by the GoA/ADB. The PMIC will review and confirm final compensation budgets for the projects. PMIC will disclose information pamphlets and conduct the consultations with affected households and persons. The PMIC will provide relevant trainings to the YM, establish a website for the PIU and set up an internal monitoring system for the LARP. The PMIC will also assist the PIU in implementation of the LARP3 tasks. iv. Independent Monitoring Agency (IMA): This consultant has already been selected and will conduct the external monitoring and evaluation of the implementation of this LARP. In the absence of a supervision consultant, the IMA is required to continue external monitoring and evaluation for all tranches. v. Independent Detailed Measurement and Asset Valuators: This is an accredited private firm hired by DESC for measurement and assets inventory as well as evaluation of the affected assets during the preparation of this LARP 3. 76

80 9.3 Other agencies and Institutions 184. Several other Government agencies play instrumental roles in the LAR processes. These are: i. The RA Ministry of Finance: The budget funds for the implementation of the LARPs (apart from the budget for land compensation and land acquisition related taxes, duties, fees and transaction costs) will be provided to YM by the RA Ministry of Finance after the official approval of the final LARP by RA Government; ii. State Committee of Real Estate Cadastre of the GoA: is responsible for providing information about the status of real estate ownership, and is in charge of the state registration of ownership; iii. Local Courts: In case of expropriation issues, YM will have to rely on the Yerevan City Court which, based on due legal process, will have to review the expropriation cases, carry out a hearing and decide whether the land can be expropriated and if so, what would be fair price. 77

81 10 LAND ACQUISITION AND RESETTLEMENT PLAN 3 IMPLEMENTATION PROCESS 10.1 Background 185. This Chapter describes the steps taken to prepare this LARP 3 and the future activities required to ensure its successful implementation. A timeline and implementation schedule is presented at the end of the chapter Land Acquisition and Resettlement Plan3 Preparation Actions 186. The IA will begin the implementation of LARP3 immediately after its approval by the ADB. During LARP implementation additional LARP implementation specialists can be hired depending on the workload. It has already initiated some actions as groundwork and certain preparatory tasks regarding the implementation of the LARP have been successfully completed. The following are the particulars of the main preparatory tasks completed to date: i. Establishment of the Project Implementation Unit (PIU); ii. Publication of preliminary notification expressing intent to acquire land under eminent domain; iii. Establishment of the official cut-off date as of 13 th April, 2012; iv. Revision and updates of impacts, AP numbers and costs data based on the latest LARF provisions; v. Final public consultations; vi. Disclosure of assets description protocols to all APs; vii. Identification of potential expropriation cases; viii. Legalization of legalizable APs; ix. Appointing of Independent Monitoring Agency (IMA); x. Endorsement of this LARP 3 by the PIU and its submission to the ADB for approval in the form of this document Land Acquisition and Resettlement Plan 3 Implementation Milestones 187. IA will provide adequate advance notice to the APs and pay their due compensation based on the eligibility criteria defined in this LARP 3 for resettlement including relocation and income restoration/assistance prior to the start of construction work The following process of compensation disbursement to the APs in accordance to Project LARF and Armenian Laws and Regulations is described below: 78

82 i. Sending of draft contracts: As soon as LARP is approved by ADB and RA Government, IA will send the draft contracts to legal APs, including renters. IA should sign a final contract with AP within 3 months after dissemination of the draft contract. ii. Signing of the contracts and agreements: PIU will sign contracts for disbursement of compensation for legal properties and agreements for disbursement of allowances. iii. Expropriation procedure: If in the event of compensation dispute the final contract was not signed with AP within 3 months after dissemination of the draft contract, the amount of compensation will be pledged in the names of the APs on the court deposit account. AP has a right to take the amount from deposit account within 7 days. In this case, contract will be considered as signed. Otherwise, IA will initiate expropriation procedure and will transfer the case to the court. In such cases, no construction works on the particular plot will start until court decision is obtained and enters into force. iv. Payment of compensation/ allowances: The compensation amount will be paid within 15 days after the acquired property is registered in SCREC and the 15% will be paid after the AP hands over the property according to a handing act. The compensation/allowances will be transferred to the AP s bank account. v. Vacation of site: The APs will have 45 days to relocate from the date of delivery of full compensation/allowances. Within this time they should manage to dismantle and remove all salvageable material for rebuilding of houses and re-establishment of businesses. IA reserves the right to demolish such structures if the AP has not done this by the agreed deadline vi. Absent APs: If owner is not in RA, then the deal can be carried out by official representative of the AP based on a power of attorney. If no representative is appointed, then the property will be legally expropriated through a Court process and the compensation will be transferred to the court deposit account. The Court will pay this compensation to any person who establishes his/her legal entitlement to receive it Grievances or objections (if any) will be redressed as per the grievance redress procedure adopted in this LARP (details are provided in the Chapter 5). All activities related to LAR will be completed prior to commencement of civil works Land Acquisition and Resettlement Plan 3 Implementation Schedule 190. The timeline presented in the following table shows the distinct stages of LARP 3 preparation, finalization and implementation. Table 10-1 Timeline for LARP Preparation, Finalisation and Implementation Task Name Responsibility Start Finish LARP PREPARATION TASKS (PPTA stage) Social and DMS surveys for two Draft LARPs PPTA Consultant Feb 1 '10 Apr 1 '10 Public consultation PPTA Consultant Feb 1 '10 Apr 1 '10 Initial land valuation PPTA Consultant Feb 1 '10 Apr 1 '10 Preparation of two Draft LARPs PPTA Consultant Mar 1 '10 Apr 1 '10 ADB and Government approve two Draft LARPs ADB and GoA Apr 1 '10 Apr 1 '10 Disclosure PPTA Consultant LARU/PIU/ADB May 1 '10 May 1 '10 Project appraisal ADB May 1 '10 May 1 '10 79

83 Task Name Responsibility Start Finish Loan approval ADB Jun 1 '10 Jun 1 '10 GoA decree N 990 to recognize the project as the Project of public exclusive interest GoA decree N 1844 to recognize the project as the Project of public exclusive interest GoA May 26 '11 May 26 '11 GoA Dec 22 '11 Dec 22 '11 LARP 3 FINALIZATION Aug 1 '12 May 18 '14 Hiring the Supervision Consultant PIU Sep 1 '12 Sep 1 '12 Finalization of road alignment DESC Oct 1 '12 Feb 1 '13 New DMS, Census and Valuation based on the final alignment and amended LARF of July 2012 DESC Aug 1 '12 Aug 1 '12 Establishment of a complaints and grievances mechanism PIU Dec 1 '12 Dec 1 '12 Consultations, presenting valuation methodology and average rates for the affected properties PIU/DESC Aug 7 '13 Aug 26 '13 Collection of required information from different ministries PIU Jan 1 '13 Oct 30 '13 Notification to the APs on impacts and compensation entitlements PIU Aug 1 '13 Oct 1 '13 LARP 3 preparation and documentation DESC Sep 15 '13 Oct 30 '13 Submission of Draft LARP 3 to ADB for comments PIU Nov 10 '13 Nov 10 '13 GoA Decree N 1256 to recognize project affected properties as public exclusive interest GoA Nov 14 '13 Nov 14 '13 ADB review and comments ADB Oct 11 '13 Jan 13 '14 Finalizing LARP 3 according to ADB comments DESC Jan 13 '14 Feb 6 '14 Submission of finalized LARP 3 to ADB for approval PIU Feb 7 '14 Feb 7 '14 ADB approves LARP 3 ADB Apr 04 '14 Apr 04 '14 RA Government approves LARP 3 GoA May 15 '14 May 15 '14 RA Government approves LAR Budget GoA May 15 '14 May 15 '14 Posting approved LARP 3 document on ADB and YM websites ADB and PIU May 25 '14 May 25 '14 Preparation of the disclosure information pamphlet DESC/PIU Apr 28 '14 May 15 '14 Distribution of the disclosure information pamphlet PIU May 15 '14 May 18 '14 LARP 3 IMPLEMENTATION Apr 1 '13 Oct 3 '14 Allocation of LAR budget to YM RA MoF May 20 '14 May 20 '14 Identification of potential expropriation cases PIU May 1 '13 May 1 '13 Draft contracts sent to APs PIU May 25 '14 Jun 3 '14 Signing contracts PIU Jun 3 '14 Sep 3 '14 Disbursement of compensation PIU Jun 13 '14 Sep 13 '14 Finalization of expropriation, provision of expropriation injunctions PIU Jul 15 '14 ct 15 '14 Preparation of LARP 3 Compliance Report IMA May 1 '14 Oct 13 '14 ADB reviews the LARP 3 Compliance Report ADB Nov 13 '14 Nov 2 '14 ADB approves the LARP 3 Compliance Report ADB Nov 2 '14 Nov 2 '14 Handing over of the site to the Contractor PIU Nov 3 '14 Nov 3 '14 Commencement of civil works Contractor Nov 3 '14 Nov 3 '14 CONTINUOUS TASKS Monitoring PIU/IMA/ADB - - Grievances redress PIU

84 81

85 11 MONITORING AND EVALUATION 11.1 Background 191. The implementation of LARP 3 will be subjected to both internal and external monitoring. Internal monitoring will be conducted by the PIU supported by the PMIC. External monitoring is assigned to AM Partners, an independent monitoring agency (IMA) hired by YM and approved by the ADB Internal Monitoring 192. Internal monitoring will be carried out routinely by PIU both directly and through the services of the PMIC. The results will be communicated to ADB through the quarterly Project implementation reports. Indicators for the internal monitoring will be those related to processes, immediate outputs and results which allow for the assessment of the progress and results of LARP implementation, and the adjustment of the work program, if necessary. Specific monitoring benchmarks will be: i. The information campaign and consultation with APs; ii. Status of land acquisition and payments on land compensation; iii. Compensation for affected structures and other assets; iv. Relocation of APs; v. Payments for loss of income; vi. Selection and distribution of replacement land areas; and vii. Income restoration activities The above information will be collected by PIU which is responsible for monitoring the day-today resettlement activities of the Project through the following instruments: i. Review of census information for all APs; ii. iii. iv. Consultation and informal interviews with APs; In-depth case studies; Sample survey of APs; v. Key informant interviews; and vi. Community consultation meetings External Monitoring 194. External monitoring will be carried out by the Consulting Company, an Independent Monitoring Agency (IMA) selected by YM. This is an organization established in 2006 and led by five main consultants whose experience ranges from industry, to agriculture, nature protection and ecology, state statistics and other External Monitoring entails two types of activity: a) short term-monitoring and evaluation of LARP implementation and compensation delivery and b) a long-term evaluation of the rehabilitation effects of the LARP program. 82

86 Short term Monitoring and Evaluation of Land Acquisition and Resettlement Plan Implementation 196. This task will be carried out in parallel with the implementation of each LARP activity and will entail extensive field visits and communication with AP and EA. This task will result in a final Compliance Report indicating whether the compensation program has been carried out based on the provisions of the LARF and ADB policy, and with the satisfaction of the APs. The Compliance report will be communicated to PMU/YM and ADB. Approval of Compliance report by ADB will be a condition to start civil works. The Compliance Report will include the following: i. A verification of AH and AP numbers; ii. A verification that the impacts measurements in the protocols fit actual impacts; iii. A verification that the unit compensation rates used in the protocols fit LARP provisions; iv. A verification that compensation was delivered to all AHs and in the amounts defined in the LARP; v. An assessment of the way the compensation process was conducted/timed in relation to LARP provisions and effectiveness parameters; vi. A review of grievance cases including an assessment of whether grievance resolution was carried out in accordance with LARP provisions and with AP satisfaction; vii. An assessment of AP s satisfaction based on a survey based on a 25% sample of the AH; viii. An assessment of the conducting and completion of expropriation cases; ix. An assessment of the conducting of public consultation and IA-AP communication; x. An assessment of the delivery of allowances to severely affected, vulnerable and resettled APs; and xi. A final assessment of the appropriateness or not of LARP implementation. If LARP implementation is not satisfactory the final assessment will detail the necessary corrective measures Long-term Evaluation of the Rehabilitation Effects of the Land Acquisition and Resettlement Plan 197. This task will be carried out 1 year after the end of LARP implementation to find out if the LARP rehabilitation objectives have been attained or not. The SES data included in this LARP will provide the benchmarks to compare pre and post project conditions. The study will detail: i. Socio-economic conditions of the APs in the post-resettlement period; ii. Communications and reactions from APs on entitlements, compensation, options, alternative developments and relocation timetables etc.; iii. Changes in housing and income levels; iv. Valuation of property; v. Grievance procedures; vi. Disbursement of compensation; vii. Level of satisfaction of APs in the post resettlement period; viii. Level of restoration of the economic and social base of the affected people; ix. Changes in living standards and livelihoods of the APs; x. The long-term effectiveness, impact and sustainability of entitlements, and xi. Need for further mitigation measures and lessons learned. 83

87 Sustainable Urban Development Investment Program: Trance 1 Shirak Street/Artashat Highway and widening of Arshakunyats Avenue Subproject 2: Shirak Street and Artashat Highway: New Shirak Street Section Land Acquisition and Resettlement Plan Project Information Pamphlet 84

88 The Government of Armenia (GoA) is finalizing the preparation of the Shirak Street and Artashat Highway: New Shirak Street Section Subproject 2 (the Subproject) to be financed by the Asian Development Bank (ADB) under Tranche 1 of the Sustainable Urban Development Investment Program. Yerevan Municipality (YM) is the Implementing Agency (IA) through the Project Implementation Unit (PIU).The Subproject consists in the construction/improvement of a set of new roads, particularly, Shirak Street and Artashat Highway including the widening of Arshakunyats Avenue. The 3.7 km alignment includes the widening of Arshakunyats Avenue (the construction is already started in road sections without Land Acquisition and Resettlement or LAR), a new connection requiring a new alignment from Artashat Highway to Shirak Street and the widening of the Artashat Highway to Noragavit 1st Street. The Subproject requires substantial LAR. As required in these cases by the ADB Project Preparation Procedures, YM has prepared a LAR Framework (LARF) for the Program and a LAR Plan (LARP) for the Subproject fitting the requirements of the ADB Safeguards Policy Statement of 2009 (SPS 2009.) and of relevant laws and regulations of GOA. The LARF defines the compensation policy and LAR implementation mechanisms and fills the gaps between the pertinent laws/regulations of the Republic of Armenia (RA) and the SPS 2009 requirements. The LARP provides instead a detailed LAR action plan for the Project identifying all impacts/affected parties, assessing compensation rates/costs and defining implementation procedures, schedules and mechanisms. Both LARF and LARP have been agreed by GOA and as required by SPS 2009 they are to be disclosed to the public in Armenian and English on the MYM and ADB websites. This pamphlet summarizes the basic points of both the LARF and the LARP for the Subproject and is distributed for information to each project-affected Household/entity. LARF and LARP are available at the Shengavit Local Authorities office as well as on YM, PIU and ADB websites. IMPACTS SUMMARY Census Survey of the affected people and Detailed Measurement Survey of all affected assets based on the detailed design were carried out from March to August New Shirak Section affected 85 plots, of which: 30 are privately owned by 38 AHs, 44 land plots belong to YM (1 plot is leased to 1 company and 43 are illegally used by 41 AHs,) 11 land plots are legalizable and in the process of legalization/registration In total 38 residential main buildings (4,143.8 m2) and one multistory apartment building with 8 apartments (423 m2) will be demolished. In addition, 118 support structures (garages, storages, and basements) and 33 non-residential structures will be affected. One gate will be installed to provide new car access to a residential property. In total 2, m2 of improvements will be affected as well as lm and 1, m2 fences /walls. Also affected will be 349 m2 of crops, 2, 245 fruit productive bushes, 1,358 fruit trees, 274 wood trees, 187 decorative trees, 1,337 decorative bushes and 1,633 decorative flowers. The businesses impacted permanently are 7, of which 6 are with and 1 without tax declaration. There will be 5 affected employees. The Census identified 90 affected parties including households and companies (owners, renters and users of the lands/buildings, business owners and employees). Overall the individuals affected are 391 members. The households to be relocated are 62 and the vulnerable households are 18. The total LARP implementation cost, including compensations, allowances, as well as administrative costs and contingency is 2,858,339, AMD which is equivalent to 7,003, US Dollars. 85

89 COMPENSATION ELIGIBILITY AND ENTITLEMENTS All affected persons, that as a result of the Project are losing land and/or any assets linked to the land (structures, trees, crops or other improvements) and/or income sources related to the land lost are eligible for compensation and/or rehabilitation. Lack of legal rights to the assets lost or social or economic status, do not bar an AP from his/her entitlements to compensation and/or rehabilitation. Any person, who settles in the affected areas or builds/expands houses/structures or makes any other improvements on the affected plot, after the cut-off date, will not be eligible for compensation. They will, however, be given sufficient advance notice, and requested to vacate premises and dismantle affected structures prior to project implementation. The cut-off date for this Subproject is April 13, The Matrix below summarizes loss types and relative compensation/allowances entitlements. Table 1: Entitlement Matrix Type of Loss Application Definition of Aps Compensation Entitlements Compensation at replacement value +15% either in cash at market rates or cadastral values (whichever the highest). When there are no active land markets Owners cash compensation will be based on the value of the yearly product of the land for a sufficient number of years to ensure the affected parties rehabilitation for the loss of their land. 1. Agricultural land Loss AH losing agricultural land regardless of impact severity Legalizable Owner Leaseholder(community/state) Legalizable APs will be legalized and paid the same compensation as above. Leaseholder will be legalized and compensated as full owners at market rates or cadastral values (whichever the highest) or will be given a new lease. If this is not possible they will receive compensation equal to the market or cadastral value of affected land (whichever the highest) + 15% in the following proportions according to the length of the lease:1) < 1 year 5%; 2) < 15 years 14% ; 3) < 25 years 20%;4)>25 years -25%. Non-legalizable Ahs These APs will receive a rehabilitation allowance equal to 25% of the affected land market or cadastral value (whichever the highest) Owner Compensation at replacement value +15% either in cash at market rates or cadastral value (whichever the highest) 2. Non-Agricultural Land loss AH losing their commercial/ residential land Legalizable Owner Leaseholder (community/state) Same compensation as above. These AH will be legalized and compensated as full owners at market rates or cadastral values (whichever the highest) or will be given a new lease. If this is not possible they will receive compensation equal to the market or cadastral value of affected land (whichever the highest) + 15% in the following proportions according to the length of the lease: 1) < 1 year 5%; 2) < 15 years 14% ; 3) < 25 years 20%;4)>25 years -25%. Non-legalizable AHs These APs will receive a rehabilitation allowance equal to 25% of affected land market or cadastral value whichever the highest. 3. Residential buildings All AH regardless of legal status Cash compensation + 15% for loss of building at full replacement cost (to be not less than the market value) free of depreciation/transaction costs and salvaged materials. Partial impacts will entail the compensation of the affected portion of the building plus repairs (with agreement of APs). 4. Non- residential buildings/assets 5. Common property Loss 6. Crop Losses Community/Public Assets Standing crops affected 7. Tree Losses Trees affected 8. Business or Employment Losses Business employment loss Relocated Renters AHs with valid registration AHs with non legal buildings/structures built on the legal land AHs with non-legal buildings/structures built on the non- legal land Relocated Renters Community/State All AH regardless of legal status (including owners subject to obtaining legal status and residents having no residency status) All AH regardless of legal status. (including owners subject to obtaining legal status and residents having no residency status) All AH regardless of legal status (including owners subject to obtaining legal status and residents having no residency status). Relocation and severe impact allowance as entitlement 9 and 10 below Cash compensation + 15% for loss of building at full replacement cost (to be not less than the market value) free of depreciation/transaction costs and salvaged materials. Partial impacts will entail the compensation of the affected portion of the building plus repairs (with agreement of APs). Cash compensation for loss of building at full replacement cost (to be not less than the market value) free of depreciation/transaction costs and salvaged materials. Rehabilitation allowance equal to replacement cost (free of depreciation/transaction costs and salvaged materials) minus the legalization cost, which is maximum up to 20% of market value. Relocation and severe impact allowance as entitlement 9 and 10 below Reconstruction of lost structure in consultation with community/state authorized agency and restoration of their functions One year crop compensation in cash at market rate by default at gross crop value of expected harvest. Cash compensation at market rate based on type, age and productive value of the trees. Owner: (i). (permanent impact) cash indemnity of 1 year net income; (ii) (temporary impact) cash indemnity of net income for months of business stoppage up to 1 year. Assessment to based on tax declaration. In absence of tax declaration the AH will receive a rehabilitation allowance based on the maximum non-taxable salary for the number of months of business stoppage up to 1 year. The maximum non taxable salary is equal to minimum salary. 86

90 Type of Loss Application Definition of Aps Compensation Entitlements Permanent Worker/Employees: Indemnity equal to: (i) Permanent job loss 6 months of average monthly salary; (ii) Temporary loss average monthly salary for the number of months of job loss up to 6 months. 9. Allowances for Severe Impacts 10. Relocation allowances 11 Vulnerable People Allowances 12. Temporary impacts 13. Unforeseen LAR impacts, if any AH with >10% agricultural income loss or to be relocated Transport/transition costs All severely affected AHs including informal settlers and relocated renters All relocated AH including relocated renters AHs below poverty line or headed by Women or elderly people All Ahs COMPLAINTS AND GRIEVANCE REDRESS The following grievance redress mechanism is established for the Project. i) 1 additional crop compensation covering 1 year yield for APs affected by severe agricultural income losses ii) a rehabilitation allowance of 6 months at minimum salary for relocated AHs. Provision of funds to cover transport costs and livelihood expenses for 1 month. Allowance equivalent to 6 months of minimum salary and employment priority in project-related jobs Due rent and rehabilitation for temporarily affected assets will be provided. MOY will consider the unforeseen resettlement impacts during project implementation and will compensate/rehabilitate based on the above provisions. Step 1. The PIU Resettlement Specialist will accept the complaints at first instance. Field office is established to be more accessible by APs. Meetings with APs once a week have been organized starting from LARP preparation (Address: Nerqin Shengavit, N 75 School, Thursday from to 17.00). If the RS cannot resolve the matter or the APs is not satisfied with the settlement offer, the formal written complain on the name of the Project Director should be submitted to the PIU office (address is provided in the Contacts section) or via established for the collecting of complains: verabnaketsum@yerevan.am. The PIU will issue a formal response no later than in 30 days. Step 2 If an AP is not satisfied with the solution or PIU cannot solve the issue, then the AP must lodge the complaint to YM on the name of the Mayor within one month after receiving response from the PIU. YM will respond to the complaint within 15 days after the submission of the complaint by AP. (Address: Argishti Street 1) Step 3 If an AP is not satisfied with the solution or PIU cannot solve the issue, then the AP must lodge the complaint to Progec Governing Council on the name of RA Prime Minister. (Address: Republic Square, Government House N1). Finally, If the complainant is not satisfied with the decision of the PGC and is willing to continue with the process, he/she can register/file their case in a court of law, whose decision will be final. Regardless of the set grievance mechanism and procedures, APs have the right to submit their cases to a court of law at any point in time of the grievance process. FREQUENTLY ASKED QUESTIONS Can civil works start before compensations are paid? Contractors will not commence civil works in any section of the Project with LAR impacts until (a) the LARP is fully implemented; (b) agreed compensation is provided and rehabilitation assistance is in place, and (c) the affected areas are free of all obstructions. If I do not have a bank account, should I pay to open a new one to receive compensation? You can receive compensation on your private bank account. If you do not have a bank account, PIU will open the one for you free of charge. If the owner is not in Armenia, how can he/she receive compensation? If the owner is not in Armenia, he/she can send a power of attorney to a relative or close friend to sign the land acquisition contract and receive compensation. Please, consult with notaries or PIU lawyers with respect to the format of the power of attorney and procedure to adopt. If no representative is appointed, the property will be legally expropriated through a Court procedure and the compensation will be transferred to the Court deposit account. The Court may subsequently pay this compensation to any person who establishes their legal entitlement to receive it. If the owner is deceased, how will the compensation be provided? If the owner has any heirs, the compensation will be paid to them after registration of all legal inheritance documents. In the absence of heirs, the property will be expropriated and the compensation will be 87

91 transferred on the Court or Notary deposit account. Please, consult with local notaries or PIU lawyers about the process of registration. How will the compensation be paid? The steps envisaged are as follows. PIU will send the draft contracts to legal APs, including renters as soon as GoA and ADB endorsed the LARP. PIU will sign the final contracts within 3 months after it. The compensation amount will be paid within 15 days after the acquired property is registered in State Cadastre and the 15% will be paid after the AP hands over the property according to a handing act. The compensation/allowances will be transferred to the AP s bank account. What will happen if the owner refuses to sign the contract? In this case the expropriation procedure through the court will be initiated. YM will not occupy the needed plot until: the proper judicial process as defined by the law is initiated; a court decision has been obtained and properly communicated to the AHs/APs; the compensation/rehabilitation amounts are deposited in a court deposit account. CONTACTS If you still have questions or need consultation, please, do not hesitate to contact PIU representatives. Investing Projects Implementation Unit Building up of Yerevan CNOC Project Implementation Unit # 1/3 Byuzand, 5 th floor, Street 0010, Yerevan, Armenia Table of Contents 1 MAPPING AND DMS METHODOLOGY Factual Measurement Measurement Procedure Measurement of plots Measurement of structures Quantitative and qualitative registration of property Measurement Results REAL ESTATE, CROPS AND TREES SURVEY Real Estate Survey Crops and Trees Fruit Trees and Shrub Types Decorative Trees, Timber Trees and Shrubs Crops ASSESSMENT AND CALCULATION OF COMPENSATIONS Process Regulating Documents Scope of Assessment LAND VALUATION METHODOLOGY General Approach Assessment of the Land Substitution Cost Assessment Procedure Methodology for Determination of Allowances for Illegaly Used Land

92 5 BUILDING/STRUCTURE VALUATION METHODOLOGY General Approach Determination of Replacement Cost of Buildings/Structures TREE AND CROPS COMPENSTATION METHODOLOGY Assessment of Seedling and Mature Non Fruit Bearing Trees Seedling Assessment Process Non fruit-bearing tree assessment process Fruit Tree Assessment Methodology Timber Tree Assessment Methodology Crop/harvest Assessment Methodology TRANSPORTATION COSTS TRANSACTION COSTS CENSUS AND SOCIO-ECONOMIC SURVEY Census Socio-Economic Survey Qualitative Survey Methodology Quantitative Survey Methodology PREPARATION OF PROTOCOLS

93 12 MAPPING AND DMS METHODOLOGY 12.1 Factual Measurement 198. The measurement was conducted based on with the requirements of the Asian Development Bank (ADB) Policy and Annex 1 (directive on real estate measurement (registration) hereinafter: Directive) of Decree No 283-N,dated October 20, 2011, by the State Committee of Real Estate Cadastre adjunct to the RoA Government (SCREC) In accordance with ADB policy requirements, the ground situation assessment was based on the actual size of assets used by the AH at the time of measurement. If the measurements corresponded to the parameters (accounting for the permissible deviation range detailed in SCREC property certificate, the property plans were prepared for submission to SCREC If the obtained measurement did not correspond to the above parameters, the owner was informed. If the owner so wished, a new layout was prepared for submission to SCREC. After a correction in the ownership certificate was made, a final layout was submitted to SCREC in order to reregister the real estate prior to the signing of an asset acquisition contract Measurement Procedure 201. Measurements were made in the presence of APs. The APs were informed of the measurement date/time by phone, a day prior to the field visit. This procedure ensured the measurement process was monitored by the APs Measurement of plots 202. The following steps were followed to measure a plot (if the area was fenced, the fence-line was taken as the reference for measurement. If there was no fence, the plot borders were established by the APs using the land plot.): xii. The plot's borders were outlined. xiii. All segments of the plot including turning points, plot coordinates and border line break points were marked, numbered and recorded. xiv. Names, surnames and (titles, if known) of the property owners were recorded. If the area was fenced, the fence-line was taken as the reference for measurement. If there was no fence, the plot borders were established by the APs using the land plot Measurement of structures 203. Structures were measured in the following steps: xv. The structures were measured both from outside and from inside the structure. An outline of the externally measured structure was drawn according to its position on the plot. Areas located within the structures were then measured. Internal measurements were taken from the structure floor at a height of 1,20-1,30 meters xvi. The length, width and internal height of each area were measured as well for the thickness of bearing walls and partitions. Doors and windows locations were marked. xvii. Apartments and non-residential areas in multi-unit residential buildings as well as public and industrial facilities were measured only internally. Enclosures and improvements on the plot were also measured Quantitative and qualitative registration of property 204. Plots and structures were described qualitatively and quantitatively: xviii. The quantitative data included length, width, height, surface area and volumes. xix. The qualitative data included operational purpose (land categories) of the plot and the actual usage of the plot. The actual use of structures, construction date, exterior design, completion degree, construction material types (walls, floor slab, roof), etc were recorded Measurement Results 205. Draft layouts based on the obtained measurements were prepared, where the total property, affected parts and legal status of the property (ownership, rental) were distinguished by conventional symbols. For properties with ownership certificates, layouts of measured plots and structures were also 90

94 prepared in addition to the draft layout, according to the layout templates and mandatory layout requirements approved in Decree No 284-N, dated October 20, 2011, by SCREC. 2. REAL ESTATE, CROPS AND TREES SURVEY a. Real Estate Survey 3. Survey forms reflecting the main characteristics of the plots and structures were completed on the basis of a simple visual examination by the evaluator and a completed survey among the APs. The following descriptions were included: xx. General description of the property existence of infrastructures, including access to potable water, electricity, sewage, telephone lines, natural gas, etc. access to basic services, including distance from the subway, healthcare institutions and trade halls, the existence of a road, as well as an assessment of the environment. xxi. Description of the plot xxii. targeted, operational and actual purpose type of entitlement such as owned, rented or illegally used width, length and geometric structure transport availability and railway access location, position, stone content etc. existence of improvements and a description of the improvement Description of structures and improvements name, targeted, operational and actual purpose of the structure availability of infrastructure materials used for the foundation, floor slabs, external walls existence of doors and windows presence of furniture and household goods to be transported etc. 4. At this stage, the movable or immovable status of the property was determined. Properties that were impossible to separate from the land without damaging the property or the plot were qualified as immovable. The rest of the properties were considered moveable. 5. At this stage, photographs of plots as well as external and internal structures were taken. All topography forms were completed and signed by the APs (or legally authorized representatives) and the evaluator. 2.2 Crops and Trees 6. A qualified/experienced agronomist marked the existing trees/crops on the affected parts of the land. All crops, shrubs, fruit bearing trees, decorative trees and trees used for timber were registered. i. Fruit Trees and Shrub Types 7. The age of fruit trees was determined by an experienced agronomist based on his expert opinion and classified into the following groups: xxiii. xxiv. xxv. seedlings non fruit bearing trees fruit bearing trees Decorative Trees, Timber Trees and Shrubs 8. The agronomist measured the thickness of timber tree trunks and the height of decorative trees, ornate shrubs and trees and fruit bushes Crops 3 Since the detailed measurement surveys were undertaken from December 2012 to March 2013, the identification of one-year-old crops became problematic. In some cases, the agronomist was able to identify the type of crop planted a year ago based on remaining roots. In such cases, the sowing surface 91

95 area of the crops was measured. In other cases, where previous crop identification was not determinable with certainty, the information presented for that plot in the Draft LARP was used. 4 ASSESSMENT AND CALCULATION OF COMPENSATIONS 9. Compensable property evaluation activities were carried out prior to measurement, topography, crops and tree registration and photography activities. 4.1 Process Regulating Documents 10. The methodology for compensation calculations and unit price calculations was developed in accordance with the following documents: xxvi. Safeguard Policy Statement, Asian Development Bank, 2009 xxvii. The RA Government Decision No N (dated ) on Approving the Land Acquisition and Resettlement Framework of the Sustainable Urban Development Investment Program and Calculation Order of Separate Compensation Types (LARF) xxviii. The RA Law ՀՕ-189-N on Real Estate Assessment Activities adopted on xxix. The RA National Standard on Real Estate Assessment in the Republic of Armenia xxx. The RA Urban Development Minister s Decree N 09-N (dated ) on Approving the Construction of Buildings, Structures in the RA Territory and the Collection of the Increased Indicators of the Construction Work Type Cost. 4.2 Scope of Assessment 11. Within the program the following were assessed: xxxi. All affected legitimate private and community lands which individuals use on lease or in an arbitrary manner. Non-used community lands were only assessed in the Argavand and Getapnya communities. Buildings, structures and enclosures located on the alienated and total parts of the affected plot xxxii. Improvements located on the alienated and total parts of the affected plot xxxiii. Crops, fruit, decorative and ornate trees and shrub types located on the alienated and total parts of the affected plot. LAND VALUATION METHODOLOGY 4.3 General Approach 12. Under the LARF, land owners, leaseholders, land users subject to legalization and illegal users will receive compensation for the affected land. A special compensation calculation approach was defined for each group. It is presented below in a generalized form: Chart 1 Compensation for agricultural and non-agricultural land 92

96 4.4 Assessment of the Land Substitution Cost 13. Land valuation was carried out at replacement cost based on market rates. Market rates were assessed through the comparative method as defined by government regulations. Based on this method a plot value is determined by taking into account the adjusted average sale price of at least three recently sold comparable plots with a similar location and use/features. If acceptable comparators in the same location of the valued plot were not available, one or more comparator plots were drawn from a different location. 14. In order to reflect small differences between the characteristics / quality of the evaluated land and comparator lands, the average market sales of the comparator lands were adjusted according to several comparison parameters and corresponding coefficients. 4.5 Assessment Procedure 15. The comparative method was applied based on the following parameters: xxxiv. similar real estate markets were analyzed xxxv. at least three comparison units were defined xxxvi. necessary comparison elements were distinguished xxxvii. the cost of comparison units was adjusted according to comparison elements and several adjusted cost indicators averaged for the compared real estate xxxviii. obtained market cost was compared with the cadastral cost xxxix. the plot price was defined. 16. Valuation was carried out in seven steps: Step.1 To analyze similar real estate markets and choose reliable information for the analysis, the Evaluator used public sources (professional journals, websites, external advertisements), a personal database 24 and information obtained from the Center of Information technologies SNCO at the SCREC. Based on the obtained information, the Evaluator used the most compatible/relevant information (by its comparison elements). Step 2 In principle, the source of comparator values was records of executed sales from the Centre for Information Technologies SNCO at the SCREC. If for a specific plot, records did not include usable comparators, then records from the Cadastre lists of market prices or land sale offers in news papers and websites were used to form comparators. Each valued plot was matched with at least (3) three comparator plots. Step 3 Once comparator plots were identified, several additional parameters for comparing the relative quality/features of valued plots and comparator plots were also considered. The parameters and the coefficients for price adjustments are listed below: Sales condition and market state These are the market price changes which occurred between the market sales of comparator lands and the evaluation period. The evaluator also considered whether the property was purchased through a mortgage. Since the review of market real estate sales was based on the most recent and adjusted information and there were no instances of mortgage arrangements, a coefficient of 1,0 was applied. Targeted and operational purpose these elements describe the usage for which a given plot has been approved, i.e. for residential construction, public construction, agricultural purposes, etc. The evaluator didn't make any corrections since, according to ADB policy, the assessment is based on the actual usage of the plot. Actual usage This shows how the given plot is actually used, irrespective of its cadastral, targeted and operational purpose. The Evaluator didn't make a correction in cases where the actual purpose of the assessed plot was that of an orchard, for example, but the plot was officially categorized as residential construction, since s/he considered the plots free of any improvement, as well as from trees and crops 25. Qualifying the actual purpose of the plot as an orchard, the Evaluator intends to indicate that there are trees on the given plot. Location and position Assessed and comparator plots were shown by districts. Their 24 In his/her office, the Evaluator kept a database, where both the prices of the property subject to sale and the sales data (that became known to the Evaluator, as a result of implemented transactions with the Evaluator s participation) are entered. 25 The assessment of trees and crops is carried out separately and is added to the compensation cost. This provides a possibility to avoid double calculation of trees and puts the APs in socially fair and equal conditions. If, during the evaluation, the plot had been compared with the plots with actual orchards, the price of the latter would have also included the cost of the trees as land improvement 93

97 distance from a main road was also shown. In this case, 20 % step decrease or increase coefficients were applied. Access to transport his coefficient described the distance of assessed and comparator plots from main transport junctions. Access to transport was found to be the same for assessed and comparator plots and no coefficient was applied. Total surface area The size of the total surface area of the affected plots didn't impact the plot price, since it was similar to the surface areas of comparable plots. Façade This shows how many meters of facade the given plot has on the main road. Since the facade surface areas corresponded to standards formed in the market, a corrective coefficient wasn't applied. Availability of infrastructures the distance from the assessed plot to main infrastructures (roads, irrigation pipeline, drinking water pipeline, electricity line, gas pipe, sewage). If the infrastructures were close to the plot or available on the plot, it was noted that the infrastructures are available for the given plot or the plots equipped with the given infrastructure. If the plot was located in a district where the given infrastructure is missing and its availability is an urban problem, it was noted that the plot doesn t have the given infrastructure. The first comparator plot had a more favorable location in terms of availability of infrastructures and the Evaluator applied a 15% correction Slope The coordinated market observations show that plots with or without a slope have different prices. For that reason, the Evaluator also considered this comparison element. As the assessed and comparator plots are flat, corrections for slope" were not made. Property entitlements Plot prices differed depending on whether the entitlement was ownership, lease or illegal usage. The Evaluator didn't apply an adjustment coefficient as according to Decision 273-N (LARF), the plots were assessed as private, then, depending on the type of entitlement, the compensation amount was determined. Improvements This shows what improvements a given plot has other than main structures and trees, for instance, a metal, wooden or stone enclosure, areas covered by concrete or asphalt, etc. The Evaluator did not make a correction related to this element since the cost of these improvements is calculated separately and is added to the compensation cost. Step 4. The market price unit of the plots was adjusted according to the listed comparison elements. The adjustment logic is presented in the table below: Table1 Calculation of cost of 1 square meter of the total plot C o m p a r i s o n e l e m e n t s Assessed real estate Similar real estate 1 Similar real estate 2 Similar real estate 3 Price for 1 square meter (AMD) 30,064 13,333 12,933 Bargaining (Sales condition) Sale Sale Sale Adjustment coefficient Adjustment by AMD Time (Market state) Adjustment coefficient Adjustment by AMD Targeted purpose Populated area. Populated area. Populated area. Populated area. Adjustment coefficient Adjustment by AMD Operational purpose Other lands Resid. struct. Resid. struct. Resid. struct. Adjustment coefficient Adjustment by AMD Actual purpose Orchard Resid. struct. Resid. struct. Resid. struct. Adjustment coefficient Adjustment by AMD Location Good Excellent Satisfactory Satisfactory Adjustment coefficient Adjustment by AMD -6,013 2,667 2,587 Position Excellent Excellent Good Good Adjustment coefficient Adjustment by AMD 0 2,667 2,587 Access to transport. Good Good Good Good Adjustment coefficient

98 Assessed real estate Similar real estate 1 Similar real estate 2 Similar real estate 3 Comparison elements Adjustment by AMD Physical characteristics: including Total surface area (square meter) Adjustment coefficient Adjustment by AMD Facade (meter) Adjustment coefficient Adjustment by AMD Availability of infrastructures Satisfactory Good Satisfactory Satisfactory Adjustment coefficient Adjustment by AMD -4, Slope Flat Flat Flat Flat Adjustment coefficient Adjustment by AMD Property entitlements Illegal Private. Private. Private. Adjustment coefficient Adjustment by AMD Improvements None None None None Adjustment coefficient Adjustment by AMD General adjustment (AMD) -10,522 5,333 5,173 Price for 1 adjusted square meter (AMD) 19,542 18,666 18,106 Weight coefficient A unit price for the assessed real estate 18,770 Step 5 The final decision on the value of the assessed property was determined through the sales comparison method by analyzing adjusted prices of comparator real estate sales. The Evaluator averaged the adjusted prices of three similar plots after establishing that all the three comparator plots are similar to the assessed plot and that the sources for obtaining data are credible. Step 6 The market price obtained through this method was compared with the cadastral price. In cases when the market price obtained by the comparative method was higher than the cadastral price of the plot, prices obtained through the comparative method were taken as a basis. Step 7 Then, the market price of the plot was calculated by the following formula: where: P MC = P SA x S MC P MC is the market price of the plot, P SA - is the surface area of the plot, S MC -is the adjusted market price for 1 square meter of similar plots. 4.6 Methodology for Determination of Allowances for Illegaly Used Land 17. Under the adopted LARF, the YM is committed to provision of rehabilitation allowances to all APs for the parts of illegally used land of the Yerevan Community, affected by the Project. The purpose of this allowance is to assist APs restore their livelihood. 95

99 18. A list of affected illegal land users was prepared during the field works /measurement and survey/. In terms of illegal land usage, it was accepted under LARP 3 that such APs are persons who, during the measurement surveys presented themselves as the current users of the land over which they do not have a legal title, and that fact is confirmed by their neighbors. The list of such APs was updated continuously and finalized after several visits. The maps and lists created based on the measurements were examined by the local community authorities for verification and clarification of the information and identification of real land users. 19. The verification was based on certified forms issued to APs for the collection of signatures of neighboring users and witnesses living in the neighborhood. Each AP was required to collect five witness signatures which certify that s/he is the user of an affected part of land plot. The correctness of the signed forms was confirmed by the local community representatives. 20. The compensation eligibility of land-users without legal title was determined based on the following principles: xl. Land for which there is no evidence of actual usage, i.e. there are no existing structures (including fence) and/or trees (fruit bearing, decorative, wood), crops or other agricultural or any signs of works, improvements will be excluded from the lists of compensable APs. xli. Land on which usage is evident - that is the land on which there were either existing structures (including fences) and/or trees (fruit bearing, timber and decorative trees), crops or other agricultural produce, or any signs of works will be compensated to APs. xlii. Only an existing structure (e.g. a shop), located on a piece of land is used - in this case, the part of the surface area occupied by such structure, and the area necessary for its maintenance (taken as equivalent to the external surface area of the existing commercial/business structure) will be compensated. For example, if external area of a building is 100m2, then its illegal user will be entitled to compensation for 200m2 of land. xliii. Land with some fruit bearing, timber or decorative trees for which the use of the remaining land by inhabitants is not evident (doubtful) -. in such cases, the existence of fruit bearing, decorative or timber trees was taken as valid proof that the plot is actually used. The local agricultural standard (Agricultural University) envisages different areas for different types of trees. Under this standard, walnuts need the largest area of 72m 2. In order to avoid complicated calculations and disputes for every type of a tree grown on an illegally used land plot, the YM decided to compensate 100m 2 of land for each tree. To define the portion of the plot to be compensated, 100m 2 of land per tree was set as a standard. For example, if the whole land plot area is 600 m 2 and there are 3 existing fruit bearing trees, then each tree will entitle the illegal land user to compensation for 100m 2 of land, that is 100 m2 x 3 = 300 m2. Therefore out of 600m 2 of a land plot, an illegal AP will be paid compensation for 300m 2 of land. xliv. A land plot is smaller than 100m 2 and it has one or more trees on it - the exact area was compensated regardless of number of trees on the plot. For example, if the area of the land plot is 90 m 2 and there are 2 fruit bearing trees on the plot, only 90 m2 will be eligible for compensation. xlv. An existing residential buildings is erected and used on a land plot external surface area of the building should be multiplied by 2 to calculate the area of the land compensation. For example, if the area of a residential building is 100 m 2, then the land compensated will be 200 m 2. The affected part of the land will be considered for compensation of an area up to 1000 m 2. xlvi. An industrial building is erected and used on a land plot - external surface area of the building should be multiplied by 3 to calculate the area of the land for compensation. For example, if the area of an industrial building is 100 m 2, then the land compensated will be 300 m 2. The affected part of the land will be considered for compensation of an area up to 1000 m 2. BUILDING/STRUCTURE VALUATION METHODOLOGY 4.7 General Approach 21. The compensation for alienated buildings and structures was calculated for both the owners of legal structures and users of illegal structures. For each group, Decree 273-N (LARF) defines a special approach for compensation calculation. It is presented in the chart below in generalized formed. 96

100 Chart 2 Compensation for residential and non-residential structures 4.8 Determination of Replacement Cost of Buildings/Structures 22. The valuation of building/structures was carried out at replacement cost +15% based on the methodology/parameters recommended by the Information and Calculation Center for Pricing (CJSC) at the RA Ministry of Urban Development. Replacement cost is here understood as the total cost to reconstruct a building/structure comparable in area, materials and features to the building/structure to be replaced, free of deductions for transaction costs and amortization. The calculation of the replacement cost was based on the following factors: xlvii. current market value of materials xlviii. current cost of transportation of materials xlix. current labor costs, and l. cost of specific structural/esthetic features of the affected building. 23. Calculations were made in compliance with official measurement indicators and adjustment coefficients established for the whole RA territory and civil works valuation parameters defined under the official Aggregative Indicators for Civil Works (AICW). 24. The replacement costs of buildings and structures were determined on the basis of li. data presented in relevant specialized normative bulletins (INCC) and other reliable sources lii. data on costs mentioned in construction contracts for similar structures in market conditions. 25. For the assessment of real estate, the replacement costs of structures were calculated as the sum of direct and indirect expenses and business (constructor s) profit. The required expenses, for constructing 1 square meter of real estate with similar use and purpose, were defined by the following formula: S E = D E + I E + BP where: S E required expenses for construction of 1 square meter of real estate with similar use and purpose D E sum of direct expenses, I E - sum of indirect expenses, and BP - business (constructor s) profit. 26. Direct expenses included the following expenses directly associated with construction: liii. expenses for purchasing materials, products, engineering networks and systems, and constructors' salaries liv. expenses for operation of construction vehicles and machinery lv. expenses related to temporarily constructed structures, safety measures, other expenses considered the norm in the transport and local market lvi. expenses related to financing the construction, and lvii. contractor s overhead expenses and profit. 27. Indirect expenses were defined based on market tariffs for works and services. The following expenses arising from the construction of structures were considered indirect expenses and were not included in the cost of construction: lviii. design, estimate preparation, technical and other control expenses lix. payments for consulting, legal, accounting and audit services lx. expenses related to advertising, marketing and object sale lxi. entrepreneur s administrative and other expenses. 97