ARM: Water Supply and Sanitation Sector Project Phase II
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1 Social Due Diligence Report December 2014 ARM: Water Supply and Sanitation Sector Project Phase II Prepared by Project Management Unit, Armenian Water and Sewerage Company for the Asian Development Bank. This social due diligence report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
2 This is a revised version of the due diligence report that was originally posted on the AWSC website in June 2014, with additional information to comply with ADB s requirements for negotiated land acquisition. LAND ACQUISITION AND RESETTLEMENT REVISED DUE DILIGENCE REPORT SUBPROJECT 3, LORI ARMENIA: WATER SUPPLY AND SANITATION SECTOR PROJECT. Phase II Project Number: L2860-ICB-1-04 Prepared by the Project Management Unit, Armenian Water and Sewerage Company December 2014
3 ABBREVIATIONS ADB AH AP AWSC CJSC DDR DRR GoA HGSHN JV LA LAR LARF LARP PC PS SCWE SPS WSS Asian Development Bank Affected Household Affected Person Armenia Water and Sewerage Company Close Joint Stock Company Due Diligence Report Daily Regulating Reservoir Government of Armenia Haygyugshinnakhagic LTD Joint Ventured Local Authorities Land acquisition and Resettlement Land Acquisition and Resettlement Framework Land Acquisition and Resettlement Plan Public Consultation Pumping Station State Committee for Water Economy Safeguard Policy Statement Water Supply and Sanitation 2
4 TABLE OF CONTENT ABBREVIATIONS 2 TABLE OF CONTENT 3 I. INTRODUCTION 4 A. Project Background 4 B. Scope of the Project 4 C. Design Features of the Subproject 3 5 D. Objective and Scope of the Report 8 II. LAR REQUIREMENTS FOR THE PROJECT 8 III. MINIMIZING OF LAND ACQUISITION AND RESETTLEMENT IMPACTS 8 IV. SCOPE OF LAND ACQUISITION AND RESETTLEMENT IMPACTS 9 A. Impact on Land 9 B. Impact on Business 10 C. Impact on water supply and land access 10 V. COMPENSATION AND LIVELIHOOD RESTORATION 11 VI. CONCLUSIONS 14 Appendixes: Appendix 1: A post-factum signed protocol for land acquisition under a negotiated settlement Appendix 2: An English summary of Appendix 1 Appendix 3: Signed sale and purchase contract Appendix 4: Some photos of the negotiation and agreement signing 3
5 I. INTRODUCTION A. Project Background 1. On the back of the successful implementation of the Water Supply and Sanitation Sector Project, Phase I, the Government of Armenia (GoA) through the State Committee for Water Economy (SCWE) has requested Asian Development Bank (ADB) to support the funding of a new project under Additional Financing. ADB agreed to provide GoA with a loan of 37 mln AMD to rehabilitate and extend of the water supply and sanitation (WSS) systems across 10 subprojects and improvements in operational efficiency and financial management of Armenia Water and Sewerage Company (AWSC), a government-owned commercial company that is managed and operated through a management contract by an international water utility company. B. Scope of the Project 2. The Project is aimed at (a) rehabilitating and upgrade water supply infrastructure, (b) improving the performance of water services, and (c) improving the management and operational efficiency of the water utility company. 3. As a result, Project will ensure further public health and environmental improvements by providing potable and reliable water supply to beneficiary households. It will also support poverty reduction by (i) reducing the incidence of waterborne diseases and costs of medical care; (ii) improving the time poverty of women due to labor intensive housework such as water collection, which may allow them to participate more in social and economic activities; (iii) providing safer and more reliable water supply; and (iv) improving the quality of life of households in all the project towns and villages by improving their access to safe and sustainable drinking water. 4. The Project will establish safe, reliable piped water supply for 112 communities: 18 towns and 94 villages within 10 Marzes (Aragatsotn, Ararat, Amavir, Geharqunik, Tavush, Lori, Kotayq, Shirak, Syunik, and Vayotz-Dzor). The Project will be implemented through subprojects. Subproject 3 is divided into 3 packages. Ten communities (8 villages and 2 towns) from Lori marz are the beneficiaries of the Subproject 3. Details are presented in Table 1. 4
6 Table 1: List of Subproject Communities per Type Name Stepanavan Metc Parni Metcavan Sarchapet Lernahovit Alaverdi Arevatcag Odzun Tegut Shnog Type of Community Package 1 urban rural Package 2 rural rural rural Package 3 urban rural rural rural rural C. Design Features of the Subproject 3 5. Detailed design (DD) has been developed by AWSC consultant JV of HGSN and JINJ LTDs. The network in beneficiary communities is mostly built in 1960s-70s. Water reservior in Alaverdi was constructed in About 80% of the system is in emergency condition. Some waterlines and water metering units were built in in the frameworks of the projects financed by ADB. 6. The following elements are designed for Subproject 3: i) reconstruction and construction of polyethylene pipes, ii) replacement of the entry lines for the private houses, iii) installation of water metering units, iv) reconstruction and construction of DRRs, v) construction of water supply and water metering chambers. Additionally, a pump station (PS) will be constructed in the Teghut rural community. Details are presented below in the table (Table 2). In total near 58,000 community members will benefit from the replacement of the entry lines and installation of water metering units. 5
7 Table 2: Works to be implemented under the Subproject 3 Package 1 Package 2 Package 3 Works to be implemented Unit Stepanavan town Mets Parni Subtotal Metsavan Sarchapet Lernahovit Subtotal Alaverdi town Arevatsag Odzun Teghut Shnogh Subtotal Total Reconstruction of internal water supply network with polyethylene pipes km Reconstruction of DRRs N Construction of PS N Installation of private houses connections Installation of private houses water metering nodes Repair of inlet lines of apartment buildings Valve nodes of the inlet lines of apartment buildings Construction of water supply and water metering chambers Construction of the segment of pressure pipeline from the PS to the DRR with de250 polyethylene pipes, their washing and disinfecting km ,089 23,639 set ,022 2,672 km set set lm Construction of buried valve node set Construction of de63 connections for apartment buildings lm
8 Package 1 Package 2 Package 3 Works to be implemented Unit Stepanavan town Mets Parni Subtotal Metsavan Sarchapet Lernahovit Subtotal Alaverdi town Arevatsag Odzun Teghut Shnogh Subtotal Total Reconstruction/construction of intake reservoir Reconstruction/construction of Hovdara water main with de polyethylene pipes,their washing and disinfecting Construction of chlorination station on Hovdara water main Construction of pressure reducing chambers on Hovdara water main piece lm set Project Beneficiaries Num 16,740 2,310 19,050 7,300 2,816 1,665 11,781 16, , ,365 27,058 57,889 7
9 D. Objective and Scope of the Report 7. The objective of this due diligence report (DDR) is to review the Subproject 3 land acquisition and resettlement (LAR) impacts based on the DD and propose mitigation measures, if necessary in accordance with ADB Safeguard Policy Statement (2009). II. LAR REQUIREMENTS FOR THE PROJECT 8. In terms of safeguard categories, the Project is defined as B category for involuntary resettlement impact (limited impacts). The preliminary design and later on the DD shows that the rehabilitation and construction will be conducted mostly on property owned by the AWSC, on municipal/community land, or within the rights-of-way assigned to municipal/community infrastructure. 9. Land Acquisition and Resettlement Framework (LARF) for AWSS Project (Phase II) has been prepared by the AWSC and was endorsed first by the SCWS under the RA Ministry of Territorial Administration and then by the Government of Armenia in March The document details mechanisms, procedures and compensation entitlements to be applied in the planning and implementation of Land Acquisition and Resettlement (LAR) activities. A sample Land Acquisition and Resettlement Plan (LARP) for AWSS Project (Phase II) was developed in December The document addressed project LAR impacts based on the preliminary design and respective budget for its implementation. The sample resettlement plan was also endorsed by SCWE and uploaded on ADB s website together with the Project LARF on 19 December III. MINIMIZING OF LAND ACQUISITION AND RESETTLEMENT IMPACTS 10. One of the main preconditions of the DD was the avoidance of the LAR impacts as the LARF states that subprojects involving acquisition of private properties and/or that cause significant LAR impacts are ineligible for project financing and thus must be dropped from the project. 11. Therefore, prior to each section DD, the cadastral maps for each community were examined to understand if there are any overlaps between the private or used lands and the existing water pipes. Verification of the cadastral maps was done also in the field based on the survey and measurement where applicable. After the exercise, impact on the legally/illegally used lands/structures was avoided in the DD. 12. Main principles followed during the detailed design: i. Pipes were located on sites that were already used for the same purpose and/or were owned by the community authorities; ii. New lines were selected on the community streets, which helped to avoid the LAR as well as usage of the used lands by community members in the future. Also it will ensure easier maintenance of the infrastructure as well as prohibit illegal use of water from the pipes network. iii. Where the private usage of the land was identified a new design solution was given to avoid the impact (see Figure 1 as an example). 8
10 iv. All the designs were presented, reviewed, agreed and confirmed by Local Authorities (LAs). LAs also confirmed minor replacements of the water pipes. The design was also reviewed and confirmed by the owners of the public utilities such as Armentell CJSC, ArmRusGazProm CJSC, Electric Networks of Armenia CJSC. v. In case of the reinstallation of the water pipes on the community lands, it is envisaged in the design, that the pavement of the road/land will be replaced with the same type of the pavement. Figure 1. Alaverdi Urban Community Note: Blue lines: old pipes; red lines: new pipes 13. Project design was implemented in the close cooperation with beneficiary communities. i. Public awareness about the project and the design was ensured by the Public Consultations (PC) with Local Authorities (LA) representatives and the members of beneficiary communities during detailed design stage. ii. All the designs were presented, discussed and agreed with LAs. In a result of an agreement all the designs were sealed by LAs. IV. SCOPE OF LAND ACQUISITION AND RESETTLEMENT IMPACTS 14. Subproject 3 will not cause significant permanent and any temporary impacts, as the operation and maintenance activities will be mostly conducted on property owned by the AWSC, on municipal land, or within the rights-of-way assigned to municipal infrastructure. However, in spite of all the efforts to escape impact on private lands or lands used by private persons or businesses, the Subproject 3 could not avoid impact on a part of a private land plot. A. Impact on Land 15. The acquisition of a part of one agricultural land plot was required for the pump station to be constructed in Teghut community. The total area of the affected arable land plot is 6000sq.m from which sq.m. will be acquired. The land plot is irrigated and used by the APs for cultivating some fruit trees. In total 16 fruit trees on the affected part of the land will be affected from which 5 9
11 are seedlings, 4 adult-not fruit bearing and 7 productive trees. Details are provided in the tables below (Table 3 and Table 4). 16. The land plot is owned by one AH. Only 3.2 % of the land will be affected. The AH will be able to plant trees on the remaining part of the land. Type of land Land plots (No) Total (sq.m) Table 3: Impact on Land Affected (sq.m) % of impact Irrigation AHs (No) Community Arable 1 6, Irrigated 1 Teghut Tree Seedling Table 4: Impact on Fruit Trees Adult-not fruit bearing Fruit bearing tree Total Blood orange Plum Cherry Pear Total Land plot (No) AH (No) All impacts were addressed and mitigated in accordance with the LARF provisions (details are presented in the chapter V Compensation and Livelihood Restoration), after a successful negotiation for the price of the land parcel for a negotiated settlement. B. Impact on Business 18. Construction of the water transmission pipeline will not cause any impact on the businesses. The roads and shoulders are wide enough so customers should not be impeded and there will be no loss of income. Additionally, constructors will provide temporary access during construction works. C. Impact on water supply and land access 19. No impacts on the water supply to households and businesses is expected in the project areas during the reconstruction of the water supply pipes and reservoir. The following measures are foreseen to eliminate such impacts, despite these disturbances being rather short in duration: i. Informing all residents and traders about the nature and duration of work well in advance so that they can make necessary preparations; ii. Increasing the workforce and using appropriate equipment to complete the work in a minimum timeframe on these stretches; and iii. Ensuring that the connection to the new system is well coordinated before disconnecting households and business from the old system. 20. During implementation of construction works, temporary restriction of access or difficult passability situation may occur. The following provisions will be included in the construction Contractors contract for the purpose mitigation or neutralization of the impact due to the abovementioned issues. 10
12 i. Before the commencement of civil works, the construction Contractor will ensure the alternative solution for the access of community members to their land or place of residence; ii. In case of unavailability of alternative solution for the access, the Contractor will have to arrange/plan his works so that they do not affect local residents. Contractor also should inform all residents and traders about the nature and duration of works well in advance so that they can make necessary preparations; iii. To maintain customer access to the acting businesses, Contractor will provide wooden walkways and appropriate vehicle access across trenches at intervals. iv. In certain unforeseen cases when the land user loses his crop due to the restriction of access to the land the contractor has to report to the supervision consultant and stop the civil work activities in the affected areas until the crops/trees are compensated as indicated in the LARF provisions. v. AWS CJSC will monitor Construction impact in terms of relevance to the described procedures and approaches. V. COMPENSATION AND LIVELIHOOD RESTORATION 21. The identified land parcel measuring m 2 was acquired through a successful negotiated settlement with the owner, Mr. Kamo Hobosyan. As such, the requirements of the SPS Safeguard Requirements 2 were not applicable and a resettlement plan was not prepared. This due diligence report details the negotiated settlement process. 22. It was planned to build a drinking water pumping station in the administrative area of Teghut community of the RA Lori marz. Relevant investigations and surveys were conducted to select the most suitable location from technical viewpoint. Based on such surveys the agricultural land of Kamo Hobosyan residing in the aforementioned community was selected as the most advantageous. After a series of consultations on the issue, the owner agreed to sell the land parcel for the project purpose. The head of the AWSC Assets Management Department entered into a negotiation with the land owner. AWSC explained to the owner that there is a LARF for the project for compensation of land, including trees, at replacement cost. For the land the owner is entitled to the current market value plus 15% additional as a solatium. AWSC also informed the owner that they will cover all registration costs and will assist him in re-measurement of the land plot and preparation of the documents necessary for registration of the deal. 23. As a result of the negotiation an agreement was reached with the land owner to purchase the land plot of m 2 with 250,000 AMD (two hundred fifty thousand). However, LAR tasks under the project were implemented according to the compensation eligibility and the entitlements matrix defined in the project LARF in line with both Armenian laws and regulations and ADB SPS. Hence, given the applicable LARF provisions within the above mentioned ADB financed project, the final estimated cost of the land was 394,106 AMD. Based on the negotiation, a Sale and Purchase (S&P) Contract was signed with notary verification on 10th of February 2014 between AWSC and the land owner. A post-factum signed protocol for land acquisition under a negotiated settlement is in Appendix 1; an English summary is in Appendix 2. The signed S&P Contract is in Appendix 3. Some photos of the negotiation and agreement signing are in Appendix 4. The entitlements relevant for the subproject 3 are presented in Table 5 below. 11
13 Table 5: Project Specific Entitlement Matrix Type of loss Agricultural land Seedling Entitlement Compensation is calculated at replacement value (market price) plus addition of 15 % Compensation for the market value of the seedling. Fruit trees Adult-not fruit bearing Productive 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; 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; Fence The compensation is calculated at replacement value plus addition of 15 % 24. Compensation was already paid prior to construction works in the first quarter of The compensation rates were determined by a certified independent evaluator using transparent methodology in accordance with the project LARF. All costs, including compensation and administration/registration costs was financed from the ASWC budget. 25. In total 394,106 AMD was paid to the landowners: 22,045.5 AMD for sq. m of affected land; 106,260 AMD for the fence affected; 265,800 AMD was paid for 16 fruit trees. Details are provided in the Table 6-10 below. Type of land Table 6: Compensation for the land Affected land plot Unit Price Market Value Compensation including 15% No Sq.m AMD/m AMD AMD Arable ,170 22,045.5 Name Table 7: Compensation for the fence L.m. Unit Price (AMD/M) Replacement Cost (AMD) Compensation including 15% (AMD) Metal Fence 28 3,300 92, ,260 Type Affecte d No Table 8: Compensation for productive fruit trees No of years to regrow new tree Productivity (kg/year) Price per kg (AMD) Compensatio n per 1 tree Total compensation Plum , ,560 Cherry ,800 99,200 Total ,760 Type Affected trees (No) Table 9: Compensation for adult- not fruit bearing trees Years (No) Price for seedling (AMD) 1st year investment (AMD) Investment for the other years (AMD) Compens ation per tree Total compens ation Pear 4 5 1,500 1,710 1,450 9,010 36,040 12
14 Type Table 10: Compensation for seedlings Affected trees (No) Price per seedling Total compensation Blood orange 5 3,000 15,000 Table 11: Summary of Compensation Paid Type of Compensation Compensation Amount AMD Compensation for the land 22,045.5 Compensation for the fence 106,260 Compensation for productive fruit trees 214,760 Compensation for adult- not fruit bearing trees 36,040 Compensation for seedlings 15,000 Total 394, The Affected household received compensation for the affected assets. Affected agricultural land is supplementary income source for the family. As it was demonstrated in the Table 3 only 3.2% of the land is affected, so AH will be able to plant the affected trees on the remaining 96.8% part of the land. Table summarises census and socio-economic information on the affected household. Table12: Census of AH and Socio-economic Profile No APs Gender Education AH Vulnerable Age Employment Status No Male Female Status No AH No Higher Civil Servant Secondary Employee in private sector Pupil Secondary Pensioner Total
15 VI. CONCLUSIONS 27. A final screening and due diligence for involuntary resettlement impacts for Subproject 3 was implemented to ensure that the Subproject did not cause any significant LAR impacts. Both permanent and temporary impacts were considered and analysed during this process. 28. The Subproject 3 included upgrading and rehabilitation of existing physical facilities. The detailed design confirmed that rehabilitation and construction will be done on property owned by the AWSC, on municipal land, within the rights-of-way assigned to municipal infrastructure and on 1 private land plot. i. The activities did not require significant permanent or temporary land acquisition irrespective of the ownership status and current usage of the land. Only one land plot (191sq.m) belonging to one AH was affected. The acquisition did not affect livelihood of the AH. The AH was compensated in accordance with LARF provisions in amount of 394,106 AMD. ii. iii. There were no impact on businesses or other income-generated activities. No one lost access to any facilities, services, or natural resources. 29. During the construction phase AWSC will monitor the construction works in terms of any temporary/permanent impact, such as limitation of access to businesses or other livelihood resources etc. Any impact identified during construction works to be compensated based on the LARF provisions. 14
16 Appendix 1: A post-factum signed protocol for land acquisition under a negotiated settlement
17
18 Appendix 2: An English summary of Appendix 1 Protocol 6 November, 2014 Within the frame of the ADB financed Water and Sanitation Sector Project-Additional Financing it was planned to build drinking water pumping station in the administrative area of Teghut community of the RA Lori marz. Relevant investigations and surveys have been conducted to select the most suitable location from technical viewpoint. Based on such surveys the agricultural land of Kamo Hobosyan residing in the aforementioned community was selected as the most advantageous. Sergey Adamyan, the head of the AWSC Assets Management Department entered into negotiations with the land owner Kamo Hobosyan. As a result of negotiations an agreement was reached with land owner to purchase the land plot of 191,7sqm. with 250,000 AMD (two hundred fifty thousand). Given the applicable LARF (Land Acquisition and Resettlement Framework) within the above mentioned ADB finance project the final estimated cost of the land constituted 394,106 AMD. Based on conducted negations Purchase and Sale Contract was signed with land owner with notary verification. This Protocol is signed by the following persons: Kamo Hobosyan Frunzeh Norekyan Sergey Adamyan Hrachik Harutyunyan Land owner Mayor of Teghut community Head of AWSC Assets Management Department Head of AWSC Assets Management Division
19 Appendix 3: Signed sale and purchase contract
20
21 Appendix 4: Some photos of the negotiation and agreement signing
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