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RP421 ECSEE A L3 Credit, Serbia and Montenegro Montenegro Energy Public Disclosure Authorized Land ,cquisition Policy Framework Background The overall APL objective is the development of a functioning regional electricity market in South East Europe d its integration into the internal electricity market of the European Union, through the mplementation of priority investments supporting electricity market and power, ystem operations in electricity generation, transmission and distribution, and technical ass stance for institutional/systems development and project preparation and implementati. n." The Montenegro Energy Project will contribute to meeting the ECSEE objective through investments in electricity transmission and Public Disclosure Authorized distribution, replacing a trash .ack on a critical hydro plant and, depending on the availability of funds, purchasi ig spare turbine wheels and upgrading energy-related telecommunications within Mntenegro and with its neighbors. Two project investments will equire land acquisition: Entry/Exit connections to the transmission network at the A ndrijevica Substation (110/35 kV) and Mojkovac Substation (220/110/35 kV). .other component has been proposed that would improve transmission lines serving cor sumers in the distribution system in the communities of Zeta and Tuzi, located south c f Podgorica, which are rapidly becoming suburbs of the city. This component wouldq Iso require land acquisition, but the remaining components will not. Public Disclosure Authorized The alignments for the entry/ xit connection and distribution transmission lines have been determined and entered i-ntothe land use plans in the respective areas, but precise land acquisition requirements ill not be known until the final technical designs are completed. EPCG has prepar $d and disclosed this Land Acquisition Policy Framework to cover all land acquisition iI the project in compliance with the World Bank's Operational Policy 4.12, Invo untary Resettlement (OP 4.12). Legal Basis for Land Acquh ition As a public utility, EPCG is cmpowered to acquire private land for specific purposes that are determined to be in the p iblic interest. The rights and obligations of EPCG relating to the use and protection of icilities for public interest are spelled out in the Article 1, Public Disclosure Authorized Clause 3, in the Electricity ] aw, published in the Official Gazette of the Republic of Montenegro No. 39/03. The Ilgal basis for private ownership of land and the acquisition and expropriation of private 1 nd by the State or its agencies is defined in the Constitution of the Republic of Monten gro (Article 45 of the Constitution of the Republic of Montenegro - Official Gazette of the Republic of Montenegro No. 48/92) and elaborated in the Expropriation Law, No. 55/2000, which was modified subsequently to comply with a decision of the Supreme Court of the Republic of Montenegro, No. 14/2001, published in February, 2002. The Supreme Court decision clarified the constitutional basis for expropriation, limits of expropriation and the objective of compensation: The Constitution, therefore, guarantees the property right and only exceptionally allows the possibility of depriving or limiting the property right in case when that is imposed by the public interest and established by the Law or based on the Law. The owner of the property on which the property right is abolished or limited, must receive a compensation that cannot be lower than its market value. Therefore, the Constitution, along with determining the reasons for abolishment or limitation of property rights, defines also the lowest limitfor the determination of a compensationfor the abolishedor limitedproperty right as an equivalent. The upper limit of the compensation is not defined in the Constitution. The intention is, therefore, that the previous owner is notput into a lessfavorable position - throughapplication of measuresof coercion- as compared with the position he used to have before the application of such measures. Therefore, the abolishment of someone's property right or its limitation is intricately connected with the determination and payment of the belonging compensation or equivalent, the value of which cannot be lower than the market price of a real estate that is being expropriated or a real estate over which the property right is being limited. In accordance with that, as estimated by the Constitutional Court, the determination and payment of compensation must precede the transfer ofproperty right or, at least, be simultaneous with it. The most salient elements of the Expropriation Law are as follows: * Expropriation can only be undertaken for public interest, which must be documented in the proposal for an expropriation decision * The Government agency responsible for property and legal affairs confirms public interest, based on a proposal by the investor * The agency that authorizes public interest can permit the investor to conduct preliminary studies on the lands to be expropriated after consultation with the owner(s) * The investor submits an expropriation proposal to the local organ in charge of property and legal rights in the municipality in which the land is located; the proposal is based on a preliminary design and includes documentation confirming the investment in spatial plans and establishing public interest; identification of the location and ownership of affected plots, with cadastre extract; estimated cost of expropriation, based on standard evaluation principles; proof that the estimated cost is deposited in an expropriation account * Plot owners are consulted before the expropriation decision is adopted * Compensation is based on the market value of the land and assets (or market rental value, if expropriation is temporary), transition expenses and damages * Compensation can be in cash or in kind-including substituting land or structures and replacing or moving structures 2 * After public interest h Is been established, the investor can negotiate the amounts and condition of purch se with owners without resorting to expropriation; negotiations are recorc -d in minutes * After the expropriatiol decision is adopted, owners are notified in writing of the decision, their right to equest expropriation of a whole plot, proposed compensation methods and amounts and the timetable for processing; and are invited to negotiate * If negotiations are not uccessful, the local property and legal affairs office forwards documentati( n to the local court to determine compensation; the owner can also appeal to the ourt for a decision on compensation and the amount of land to be expropriate( Land Acquisition Requirem ents and Project Affected Persons Project investments will entai minimal land acquisition, although the exact amount is yet to be determined. The two en ry/exit connection lines between the Andrijevica and Mojkovac Substations and th main transmission lines, respectively, will follow the alignment of existing entry cc nnection lines. The terrain is typical mountain foothill terrain with forests and pastur s; little of the land is used actively. Depending on the final technical design, the new lines will either run parallel to existing lines or a double line will replace the existing 1 e. In either case, land will be acquired either for the tower footprints on the new li e or the expansion of relocation of tower footprints, if the existing line is replaced with l vo. The size of a tower footprint varies from 20m2 to 130m2. The Andrijevica conr -ction line is approximately 1.6 km and the Mojkovac connection line is approximat ly 2.5 km. A new transformer bay will be constructed on each substation, as well. The kndrijevica sub-station site is adequate for the new bay; the Mojkovac site will acquire ad litional land from the defunct state mining enterprise located next to the site. If the line replacement option is selected for the two sets of lines, additional land requirements will be miniscul , but construction may interrupt service. The double line option will require more land lo be acquired (less than 0.5 ha in total), but construction can proceed without affecting xisting service. EPCG purchases the land for footprints and compensates owners for temporary use of land used for construction, as well as damages to property values al d assets resulting from use restrictions in the right-of-way under the transmission lines. ks the additional transmission lines follow existing alignments, the investment is ot expected to affect property values significantly and no structures are likely to be affe, ted. Consequently, the cost of land acquisition is expected to be reasonable and relativel: easy to negotiate. Three categories of people will be affected by the investment in iionnector lines: landowners who own land that EPCG will purchase either to place new t, wer footprints or to expand existing footprints; landowners whose land will be used temp rarily during construction; and landowners who own land under the right-of-way of nem transmission lines that must be cleared for safety purposes. 3 The proposed component to improve transmission lines that serve the Tuzi and Zeta distribution areas south of Podgorica will also require land to be acquired for tower footprints and other above-ground facilities. One of the three lines being considered will follow the existing alignment, but may require towers to be relocated. The other transmission lines will follow new alignments, one of which is already included in the Podgorica urban plan.