MUNICIPAL SERVICES PROJECT LAND ACQUISITION FRAMEWORK
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- Marvin Stafford
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1 BACKGROUND MUNICIPAL SERVICES PROJECT LAND ACQUISITION FRAMEWORK The objective of the above project is to support municipal development in a sustainable manner. To this end, the project will a) support the development of municipal infrastructure to provide quality local services; and b) support the institutional strengthening in Iller Bank (IB) which is a source of financing for municipalities. The investments under the project will include: (a) rehabilitation and construction of water and sewerage networks; (b) rehabilitation and construction of water and wastewater treatment facilities; and (c) construction of landfill. For these investments, it may be necessary for municipalities or municipal utilities to acquire land. IB will be the Borrower of the Bank loan and. as a Financial Intermediary (FI) of the project, it will be responsible for satisfactory implementation of the project. The Bank loan proceeds will be utilized by IB to on-lend to the municipalities or municipal utilities. Specifically; IB will follow that any land acquired for the purposes investments to be supported by the Bank loan will be in compliance with the following framework. The land expropriation process should be completed for the Bank to provide financing for the investments. Projects in which physical relocation has taken place or will be required are not eligible for Bank financing. LEGAL BASIS FOR ACQUIRING THE SITES OF FACILITIES : The legal basis for the acquisition of the land will be as follows: 1. Expropriation Law (Law No approval date: ) and Laws concerning amendments to the Expropriation Law ( which includes Law No approval date: and other laws); 2. Municipal Law (Law No approval date: ) PERSONS AFFECTED BY THE PROJECT : The persons affected by the project are the owners of land which will be used for the above project. Such persons are identified as a result of the implementation and expropriation plans of the project. This framework applies in cases where the owners of the land can be identified. Two options are applicable under the framework: purchase the land through negotiations; and purchase of land through a court process RP310 Subprojects involving tenants or unofficial users of properties will not be eligible for Bank financing PRINCIPLES The principles to be used for the expropriation process are: 1
2 relevant Turkish legislation and World Bank policies will be followed; land acquisition process will be minimized; property and inheritance rights of persons will be respected; public will be fully informed and activities will be transparent; valuation of land and other assets for which compensation is given will be based on full replacement cost; all activities and procedures will be formally documented. RESPONSIBILITY AND FINANCING The land acquisition process for the investments will be carried out by the municipalities or municipal utilities. IB will follow that the process followed is in line with relevant Turkish laws and World Bank policies. IB will also report to the Bank on progress made on land acquisition, on an as needed basis. Municipalities and municipal utilities will finance the expropriation from their own sources of financing. EXPROPRIATION PROCESS Commencement of Expropriation The expropriation procedure starts after the municipality or municipal utility determines that due to the project, there will be a need to acquire land. The feasibility studies carried out for each sub-project will provide information on the need to carry out an expropriation process. Valuation A valuation committee comprising relevant municipal and utility officials appraises the value of the land to be expropriated. As per Article 8 of the Expropriation Law, expert opinion on the value of the land should be sought. This opinion may be provided by local and central agencies, real estate agents, and chambers of commerce. The standard applied in assessing value of land and property assets is that of full replacement cost. Announcement The municipality or the municipal utility notifies the owners of the property to be expropriated through an official registered mail. The notification should mention the intent of the municipality or municipal utility to purchase the land through a negotiated settlement and clearly describe steps in the land acquisition process and provisions for appeal available to the landowner at relevant steps. Transaction The purchase of land can take place through two processes: negotiated settlement; or court settlement. Negotiated Settlement If the owner of the land agrees to a negotiated settlement, then the discussions between the municipalities and municipal utilities should take place to finalize the transaction. The municipality or municipal utilities should make it clear that negotiations will last for no more than 3 months and will provide the landowner a description of the land acquisition steps and the owner s rights to due process and appeals at each step. Failure to reach a negotiated settlement will result in a court settlement 2
3 After there is an agreement on the price, the expropriation should be registered in the land office and the expropriation fee will be paid, as per Article 8 of the Expropriation Law. Court Settlement A court settlement will occur if: a) the negotiated settlement fails; or b) the owner, after receiving notification from the municipality or municipal utility, declines to negotiate. Prior to requesting a court settlement, rights to due process and appeals will be explained fully to the landowner A lawsuit will be filed by the municipality or municipal utility with a relevant court for valuation and registration, pursuant to Article 10 of the Expropriation Law. The basis for calculating the compensation payable for the land and property is full replacement value. RIGHT OF APPEAL The landowner can file an annulment lawsuit within fifteen days of the official announcement of intent to expropriate. After failure or refusal to negotiate, and the conclusion of a court settlement, the owner can appeal the compensation level stated in the judgment. ROLE OF ILLER BANK On a as needed basis, IB will inform the Bank the need to carry out an expropriation process for the proposed investments. A format for the report is attached (Attachment 1). IB will follow that the municipality and municipality utilities carry out the above procedures in a satisfactory manner. Upon transfer of ownership of the land to the municipality and municipal utility, based on documentation, IB will inform the Bank that the expropriation process is over and the municipality or municipal utility have full control of the land. Only after the expropriation process is over, the Bank will consider financing of the investments. 3
4 Attachment 1 Land Acquisition Reporting Format Iller Bank will report to the Bank every 6 months on the status of land acquisition under the project. The Sub-loan agreements between Iller Bank and municipalities will reflect that: municipalities will be responsible for land acquisition as per Municipal Law (Law No. 5272), Expropriation Law (Law No. 2942) and Law concerning amendment to the Expropriation Law (Law No.4650), Iller Bank will follow land acquisition under Expropriation Law (Law No. 2942) and Law concerning amendment to the Expropriation Law (Law No.4650). The reporting format by Iller Bank to the Bank will be: Date of Report Name of Sub-project Investment name Transaction Information Size of land; Assessed price; Negotiated price; Actual price paid; Transfer date Physical Relocation of Property Owners? Any Tenants or Informal Users Affected? Status of Land Acquisition Factual reporting on: - the need for LA, - the status of the LA process such as: under negotiations, concluded (date), awaiting court judgement, under appeal Comments Views by IB if the municipalities are satisfactorily covering implementing the LA framework 4
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