Resettlement Plan

Masalli–Astara Motorway (Project 3) Girdani-Kolatan Section (Section B)

July 2011

AZE: Road Network Development Program

Prepared by AzerRoadService Open Joint-Stock Company, Ministry of Transport, Republic of Azerbaijan for the Asian Development Bank.

The resettlement plan 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.

CURRENCY EQUIVALENTS (as of 1 August 2010)

Currency Unit – Azerbaijan Manat (AZN) AZN1.00 = $1.25 $1.00 = AZN0.80

ABBREVIATIONS

ADB – Asian Development Bank ARS – AzerRoadService Open Joint-Stock Company AZN – Azeri Manat DMS – detailed measurement survey DP – displaced person EA – executing agency EMC – external monitoring consultant GIS – geographic information system GPS – global positioning system HH – household LAD – Land Acquisition Department LAR – land acquisition and resettlement LARF – land acquisition and resettlement framework LARP – land acquisition and resettlement plan MFF – multi-tranche financing facility MOF – Ministry of Finance NGO – non-government organization PIU – project implementation unit PPTA – project preparatory technical assistance ROW – right of way SCMSP – State Committee for Management of State Property SPS – safeguard policy statement

NOTES

(i) The fiscal year (FY) of the Government and its agencies ends on 31 December. (ii) In this report, “$” refers to US dollars.

CONTENTS

GLOSSARY 1 MAPS 2 EXECUTIVE SUMMARY 3 CHAPTER 1: INTRODUCTION 4 1.1 Project Description 4 1.2 Conditionality 5 1.3 Land Acquisition and Resettlement for the Project 6 CHAPTER 2: SOCIOECONOMIC BACKGROUND OF THE PROJECT AREA 7 2.1 Composition and Traits of Displaced Households 7 2.2 Ethnic Composition of Displaced Households 8 2.3 Education of Heads of Displaced Households 8 2.4 Income Source of Displaced Households 8 2.5 Age Group of DPs 9 2.6 Livestock of Displaced Households 10 CHAPTER 3: IMPACT ASSESSMENT 11 3.1 Impact Assessment Process and Methodology 11 3.2 Census of Displaced Households and Persons 11 3.3 Impacts Assessment and Detailed Measurement Survey 12 3.4 Features of Affected Land 13 3.5 Land Impacts 14 3.6 Impacts on Buildings and Structures 14 3.7 Impacts on Crops and Trees 15 3.8 Impacts on Businesses 16 3.9 Determination of Compensation Values 16 3.10 Land Values 17 3.11 Compensation for Buildings and Structures 18 3.12 Relocation Assistance 18 CHAPTER 4: OBJECTIVES, POLICY FRAMEWORK, AND ENTITLEMENTS 19 4.1 Legal and Policy Background 19 4.2 Compensation Eligibility and Entitlements for the Project 23 4.3 Provision of Land for Land Compensation 26 4.4 Gender Impact and Mitigation Measures 26 CHAPTER 5: STAKEHOLDER CONSULTATION AND DISCLOSURE 28 5.1 Public Participation and Documents Disclosure 28 5.2 Outcomes of Stakeholder Consultations 29 CHAPTER 6: GRIEVANCE REDRESS MECHANISM 32 CHAPTER 7: INSTITUTIONAL ARRANGEMENTS 33 7.1 Central LAR Commission 33 7.2 AzeriRoadService Open Joint-Stock Company (ARS) 33 7.3 Local Governments 33 7.4 External Monitoring Consultant (EMC) 34 7.3 Capacity Building Assessment and Initiatives 34

CHAPTER 8: RESETTLEMENT BUDGET AND FINANCING 36 8.1 Compensation for Privately-owned Land 36 8.2 Compensation for Structures 36 8.3 Rehabilitation Allowance 36 8.4 External Monitoring / Third Party Validation Cost 38 8.5 Summary Resettlement Plan Budget 38 CHAPTER 9: IMPLEMENTATION PLAN AND SCHEDULE 39 9.1 LARP Preparation and Implementation Process 39 9.2 Implementation Schedule 40 CHAPTER 10: MONITORING AND EVALUATION 41 10.1 Internal Monitoring 41 10.2 External Monitoring / Third Party Validation 42

Appendix 1 – Pamphlet for Local Disclosure Appendix 2 – Summary Consultation Matrix

GLOSSARY

Compensation Money or payment-in-kind to which the displaced persons are entitled in order to replace the lost assets, resource or income. Displaced person Any person affected by project-related changes in use of land, water, natural resources or income losses. A displaced household includes all persons residing under one roof and operating as a single economic unit. Eminent domain Regulatory measure by the Government to obtain land. Entitlement Range of measures comprising compensation, income restoration, transfer assistance, income substitution, and relocation which are due to displaced persons, depending on the nature of their losses, to restore their economic and social base. Expropriation Government's action in taking or modifying property rights in the exercise of sovereignty. Host population Community residing in or near the area to which displaced persons are to be relocated. Income restoration Re-establishing income sources and livelihoods of displaced persons. Involuntary resettlement Development project results in unavoidable resettlement losses that displaced persons have no option but to rebuild their lives, incomes and asset bases elsewhere. Relocation Rebuilding housing, assets, including productive land, and public infrastructure in another location. Rehabilitation Re-establishing incomes, livelihoods, living, and social systems. Replacement rates Cost of replacing lost assets and incomes, including cost of transactions and without deduction for depreciation. Resettlement effect Loss of physical and nonphysical assets, including homes, communities, productive land, income-earning assets and sources, subsistence, resources, cultural sites, social structures, networks and ties, cultural identity, and mutual help mechanisms. Land Acquisition and A time-bound action plan with budget setting out resettlement Resettlement plan strategy, objectives, entitlement, actions, responsibilities, monitoring and evaluation. Social preparation Process of consultation with affected people undertaken before key resettlement decisions are made, to build their capacity to deal with resettlement. Vulnerable households Households that might suffer disproportionately from resettlement effects. For this subproject, households with income below the poverty line (earning less than 71.5AZN per month) are considered vulnerable.

2

Figure 1: Transport Network Map of Azerbaijan with Project Area

Source: Asian Development Bank. Technical Assistance Report for Preparing the Southern Road

Corridor Improvement Project (Alyat-Astana Road). Manila, Philippines. November 2005.

3

EXECUTIVE SUMMARY

(i) This Land Acquisition and Resettlement Plan (LARP) was prepared in accordance with the Asian Development Bank (ADB)’s Safeguard Policy Statement (SPS) 2009 and the laws and regulations on land acquisition and resettlement (LAR) in Azerbaijan. It outlines impacts, compensation policy, compensation/rehabilitation provisions, cost estimates, and the implementation schedule to compensate the impacts caused by Section B: Girdani to Kolatan of the Masalli–Astara Motorway. It is envisaged that this subproject will be implemented under Tranche 3 of the Road Network Development Program to be financed through the multitranche financing facility (MFF) from ADB. The subproject involves a flowing alignment that impacts on 66 structures and commercial enterprises. The subproject has been topographically and geologically surveyed. This LARP is based on the final detailed design of the subproject.

(ii) The Azer Road Service Open Joint-Stock Company (ARS), the Implementing Agency, has overall responsibility for the Project, including the preparation, implementation and financing of all LAR tasks and interagency coordination. ARS will exercise its functions through the Project Implementation Unit (PIU), which handles day-to-day project activities. Land acquisition and resettlement (LAR) tasks will be managed by the Land Acquisition Division (LAD) in ARS, which will organize and internally monitor RP preparation and implementation (including surveys, asset valuation, and community consultation) and LAR-related interagency coordination.

(iii) The subproject will displace 742 households (1,418 lots) with land acquisition of 161.408 ha (of which 95.161 ha is private land) and 66 private structures. Among the displaced persons (DPs) experiencing major impacts, 22 households will be physically displaced, 106 households will lose more than 10% of their productive land and another 11 households will lose their business temporarily. The total cost of RP is estimated at about $ 3.83 million. The details of resettlement impacts and cost are presented in Tables E-1 and E-2.

Table E-1 Summary Resettlement Impacts Item Unit/Number Total Land to be acquired 161.408 ha Private Land to be acquired 95.161 ha Number of Private structures affected 66 Households losing residential structure 22 Households losing business establishment 11 Households losing more than 10% of productive land 106 Number of Households affected 742 Number of displaced persons 2,668

Table E-2 Summary Resettlement Budget Item Cost (AZN) Cost ($) Compensation for Land 1,419,865 1,774,831 Compensation for Structures 1,147,814 1,434,768 Relocation Subsidy 33,000 41,250 Compensation for Business Loss 6,300 7,875 Severe Impact Allowance 27,923 34,904 External Monitoring 32,000 40,000 Base Cost 2,666,902 3,333,628 Contingency (15% of base cost) 400,035 500,044 Total 3,066,938 3,833,672

4

CHAPTER 1: INTRODUCTION

1.1 Project Description

1. Azerbaijan, an independent country of 8.3 million people, lies astride ancient north-south trading routes between the Russian Federation and the Middle East. In the east-west direction the major trade corridor extends through Georgia, connecting the Black Sea and the Caspian Sea, as well as the Russian Federation with Turkey and Europe. The three major physiographic features in Azerbaijan are: the Caspian Sea to the east; the Greater Caucasus mountain range to the north; and the extensive flatlands at the center.

2. The Government has requested ADB to finance the Road Network Development Program (the Program) through a MFF in the amount of up to $500 million. The first project (Loan No. 2354/2355) to be financed under the MFF is the Masalli to Astara section of the North-South Highway.

3. The subproject described in this LARP is Section B: Girdani to Kolatan starting from approximately in the vicinity of Girdani canal and ending at the village of Kolatan, just north of the Pensar River. The subproject will have 2 interchanges, B1 at an intersection with the M3 roadway north of the Lenkaran River and serving both Lenkaran and the road to the mountain village of Lerik, and B2 at a second intersection with the M3 south of the Lenkaran River. The subproject has been topographically and geologically surveyed. Construction works will start once the compensation/rehabilitation program under this LARP is fully implemented and the resettlement completion report and external resettlement monitoring reports have been reviewed and approved by ADB and the Government.

4. Two design options were considered in the preliminary design stage of the project carried out under the ADB Project Preparation Technical Assistance (PPTA) no. 4684-AZE. In the first option the existing alignment of the M3 would be used and in open areas where resettlement would not be an issue, the existing pavement would be rehabilitated. Then two new lanes would be added to upgrade the road to a Category I motorway with four lanes, a raised median, and adequate shoulders. In those areas where the existing M3 road passes through settlements, residents have built houses and other structures immediately adjacent to the edges of the pavement. Thus, adding two lanes to the existing M3 road would involve destruction of housing and substantial costs for resettlement. In the second option, the option described in this LARP, a new 4-lane Category I motorway will be constructed on a new alignment, away from the existing M3 road. These options have been studied extensively and a final alignment under the second option was developed with the objective of minimizing social and environmental impacts.

5. The 4-lane motorway has been designed for Category I-B road, as per the following specification: (i) width of the road embankment at 27.5 m; (ii) carriageway width in each direction at 7.5 m (2 x 3.75 m); (iii) embankment slope ratio of 1:2 minimum; (iv) width of shoulders at 3.75 m (2.5 m of the shoulders and 2 x 1 m widths of the 5 m median strip paved as same specifications as the carriageways); (v) remaining 1.25 m width of shoulder paved with bituminous crushed stone (2 x 1.25 m).

6. The 60 m right-of-way (ROW) requirement has been determined based on the standard motorway cross-section. Strategically located agricultural underpasses will connect the frontage roads on either side of the motorway creating a new system of agricultural access and circulation in the ROW. There are also two interchanges provided in the subproject.

5

Each interchange will require additional ROW for on and off ramps. This additional ROW is included in the impact assessment.

7. This LARP is prepared in accordance with the Safeguard Policy Statement-2009 (SPS) of Asian Development Bank (ADB) and Azerbaijan’s laws and regulations on land acquisition and resettlement (LAR). It outlines impacts, compensation policy, compensation and rehabilitation provisions, cost estimates, and an implementation schedule to compensate for the impacts caused by constructing Section B (from Girdani to Kolatan) of the Masalli–Astara Motorway (the Project). This subproject was previously planned to be implemented under Project 1 of the Road Network Development Program. However, because of delay in LARP finalization and approval, this is now being proposed to be part of a new tranche (Project 3).

8. For the Government of Azerbaijan (the Government) and ADB, the objective of resettlement planning is to ensure that persons unavoidably losing land or property as a result of the Project attain equal or better livelihoods than without the Project. All policies, proposals, and compensation measures contained in this RP are designed to meet this objective. ARS, the Implementing Agency of the Project, has established a Land Acquisition Division (LAD), which will be directly responsible for resettlement planning, supervision, and compensation management.

9. This LARP is based on the final detailed design of the subproject and is prepared based on: (i) relevant project reports: particularly the final motorway alignment and ROW boundaries determined during detailed design; (ii) field visits along the proposed alignment during the implementation of project preparatory technical assistance; (iii) field survey of the centerline and ROW boundaries; (iv) detailed household census interviews with displaced persons (DPs) and households; (v) consultations with local governments, affected villages, and DPs; (vi) socioeconomic surveys of displaced households carried out in 2007 and 2010; and (vii) research of all available legal land title and cadastral documents for affected lands.

10. This LARP covers the full aspects of land acquisition, resettlement, and income rehabilitation due to the construction of a 22.85 km of dual lane motorway with 2 interchanges and the local road flyovers, river bridges, and culverts. The LARP is based on the centerline alignment and ROW boundary for the motorway established during the preliminary design stage, along with a minor realignment of a cross road at km 27+600, a river diversion at km 38.000 and another cross road at km 43+600 introduced during the detailed design stage. It also includes the findings of the census survey of 36 additional plots affected due to the minor side road realignment.

1.2 Conditionality

11. Based on ADB policy and practice, the approval of the civil works contracts and the implementation of civil works for this subproject will be subjected to the following LAR-related requirements. The approval of civil works contract awards is conditional to the preparation of a LARP consistent with the Land Acquisition and Resettlement Framework (LARF), reflecting final design and impacts, which is acceptable to ADB. Provision of notice to proceed to contractors is conditional on full implementation of the LARP and satisfactory review of completion and external monitoring reports. Such a condition is included in the civil works contracts.

6

1.3 Land Acquisition and Resettlement for the Project

12. Measures to minimize the land and property acquisition impact of the project have been implemented throughout the planning and design stages of the Project. These measures included (i) undertaking an initial route selection study to examine various alignment options and selecting the one with the least impact, (ii) developing a road cross section design with features to mitigate impacts and enhance access to agricultural lands, (iii) selecting an interchange design with minimum ROW requirements, (iv) fine tuning of the motorway alignment in places of impact during the preliminary design stage using aerial photos and topographical survey plans to determine exact alignments with minimum impacts on structures and property, (iv) provision of limited access fencing to ensure the exclusion of free roaming animals from the motorway for safety; and (v) constructing bridges or underpasses at locations where existing access routes cross the motorway alignment.

7

CHAPTER 2: SOCIOECONOMIC BACKGROUND OF THE PROJECT AREA

13. Detailed information on the socioeconomic characteristics of the affected population was gathered through investigations of statistical samples and a full socioeconomic census survey for the subproject. The survey was conducted by the State Statistical Committee as part of the PPTA during July 2007 and it was subsequently updated in July 2010 by ARS to include additional land acquisition areas identified during the detailed design. The survey covered the owners/users of all lots in the ROW of the subproject and included questions about household composition, ethnicity, education, livelihood activities, and income. A total of 742 displaced households (HH) containing 2,668 members (average HH size of 3.6 persons) were covered by the survey.

2.1 Composition and Traits of Displaced Households

14. The average household composition is 3.6 members with a minimum of 1 and a maximum of 10 persons (Table 1). The ratio of men to women is 49 to 51 and the unmarried household members are 8% of the total, the married 81%, and the widows/widowers 7% (Table 2).

Table 1: Size Distribution of Displaced Households Number of Persons in the Household Households % 1 59 8 2 131 18 3 110 15 4 196 26 5 113 15 6 73 10 7 23 3 8 4 <1 9 3 <1 10 1 <1 Absentee/Not responded 29 4 Total 742 100

Table 2: Gender Distribution and Marital Status of Head of Displaced Households Item Section B Household Member Gender Status Number % Men 1,317 49 Women 1,351 51 Total 2,668 100 Household Head Marital Status Single 59 8 Married 601 81 Widower/widow 53 7 Not Available 29 4 Total 742 100

8

2.2 Ethnic Composition of Displaced Households

15. The ethnic composition of the displaced households is shown in Table 3. The Azeri people account for the majority of the displaced population (69.1%). The others are Tallish (31%). The difference between these two groups is essentially their language, with the Azeri people speaking Azeri and the Tallish people speaking Tallish. All things considered, the characteristics of the people residing in the subproject area indicate that none of the ethnic groups in the project area is known to maintain distinct cultural and social identities separate from the mainstream Azerbaijan’s society that would classify them as indigenous peoples. The Azeri people are the majority in the country and the Tallish people, though a minority, fully participate in the socio-cultural mainstream in Azerbaijan.

Table 3: Ethnic Composition and Language Spoken by the Displaced Households Item Section B Household Ethnicity Number % Azeri People 1,844 69 Tallish People 824 31 Total 2,668 100 Language Spoken in the Household Azeri 1,963 74 Tallish 705 26 Total 2,668 100

2.3 Education of Heads of Displaced Households

16. The majority of the heads of the displaced households (77%) have a high school level of education as shown in Table 4.

Table 4: Education Status of Heads of Displaced Households Item Number Total Secondary school 77 10 High school 558 75 Vocational (technical college) 37 5 University 29 4 Post graduate 3 0 Others 9 1 Not Available 29 4 Total 742 100

2.4 Income Source of Displaced Households

17. The majority of the displaced households derive their income from non-land based activities, including business, trade, and office work (Table 5). The households (HHs) whose livelihood is agricultural make up 15% (106 HHs). The average monthly income of displaced households is about AZN164. Households earning less than 71.5 AZN per month are considered to be below poverty line, but none of the displaced households fall below the poverty line. The lands to be affected by the subproject were cultivated under the Soviet system of

9

collective farming. After the independence of Azerbaijan in 1991, the collective farms were disbanded and lands distributed to individuals, most of whom have discontinued cultivating the land, but use the land communally for grazing of personal livestock.

Table 5: Primary Income Source of Heads of Displaced Households Major Income Source of Head Total % Government employee 41 6 State enterprise employee 2 0 Private company employee 5 1 Employer 4 1 Self employed 78 11 Farming 102 14 Farming-Livestock 4 1 Casual laborer 107 14 Family worker 214 29 Unemployed 10 1 Household work 12 2 Retired, sick, old 88 12 Others 46 6 NA 29 4 Total 742 100 Average monthly income (AZN) 121 Average monthly income from secondary sources, if any (AZN) 42 Average Total monthly income (AZN) 164

2.5 Age Group of DPs

18. Table 6 provides the age breakdown of DPs. Majority of DPs (66%) are within the age group of 39 and younger, while another 28% fall in within the bracket of 40 to 60 years. There are 6% of DPs who are 60 years old and above.

Table 6: Age of Displaced Persons and Heads of Household Age of household member Number of DPs % 0 – 16 513 19 17 – 29 781 29 30 – 39 454 17 40 – 49 507 19 50 – 59 240 9 60 and more 173 6 Total 2,668 100

10

2.6 Livestock of Displaced Households

19. Livestock can be seen grazing openly throughout the Project area where there are no fences to indicate land ownership or restrict livestock to certain parcels or lots. The information on livestock of the displaced households is shown in Table 7.

Table 7: Livestock of Displaced Households Type of Livestock Total % Cow 260 7.4 Bull 20 0.6 Horse 17 0.5 Donkey 52 1.5 Sheep 756 21.5 Goat 67 1.9 Chicken 1,804 51.3 Goose 488 13.9 Duck 54 1.5 Total 3,518 100.0

20. Access to Basic Amenities and Services: All households in the area are connected to the main electricity network and have piped drinking water. The maximum distance to small markets is 5 kilometers. Major markets are located in Lenkaran and the average distance to these markets is 10 km. All the villages along the project road have junior or primary school and average distance to secondary schools is 5 kilometers. For higher studies like college or vocational institute the students travel up to an average distance of 30 kilometers. Small clinics are available in each village and major health facilities and hospitals are located in Lenkaran at an average distance of 10 km from each household. Access of displaced households to these amenities and services will not be affected by the proposed project. For many households, the new project road provides an alternative route to markets and community facilities without disrupting their current access.

11

CHAPTER 3: IMPACT ASSESSMENT

3.1 Impact Assessment Process and Methodology

21. The assessment of the resettlement impact of the subproject has been carried out by ARS, assisted by PPTA consultant. The impact assessment findings were then updated after verification of the LARP by ARS and additional survey carried out on 36 additional land plots identified during the detailed design stage in 2010.

22. The impact assessment was carried out as follows: (i) evaluation of alternative alignments and selection of a least impacting alignment; (ii) preliminary design of the motorway centerline based on field visits, aerial photos and maps; (iii) preliminary assessment and design of road features to select those with minimum land requirements; (iv) preliminary calculation of the boundaries of the required ROW; (v) field staking of ROW boundaries; (vi) retrieval of registered legal documents for lots impacted by the staked ROW; (vii) identification of legal owners/users of impacted lots; (viii) plotting of registration lot boundary information into an automated GIS; (ix) plotting of the ROW into the GIS; (x) GIS calculation of the area of land to be needed from each impacted lot for the ROW and the size of all residual parcels; (xi) field visits to each lot to determine and measure the nature of lands and structures that may be impacted; (xii) a census of impacted lot owners/users and members of impacted households; and (xiii) investigation into local unit prices for land and local construction cost for the replacement of structures.

3.2 Census of Displaced Households and Persons

23. A census was conducted of all households displaced by the subproject. The listing of names came from the legal documentation of the lots that were determined to be within the ROW after field and cadastral surveys. A survey of displaced households was conducted by the State Statistical Committee under contract to the PPTA consultants in July–August 2007. The survey covered the owners/users of all lots in the ROW of the Project. A list of the households under the ROW was developed from cadastral maps from the local offices of the State Land Committee and reference to the legal documentation for each lot. The last census was carried out by the ARS with the help of the detailed design consultant on 25 July 2010. This census covered the 36 additional plots included during the detailed design.

24. The distribution of displaced households by villages and rayons (districts) is provided in Table 8. The distribution of the degree of land impacts on DPs is shown in Table 9. The majority of these lands are not under cultivation. The census shows that only 102 households (14%) among the displaced households claimed their principal source of income is agriculture and another 18 households (2%) grow fodder for their cattle. Out of 120 households depending on agriculture cultivation, 106 households will lose more than 10% of their productive land which classifies them as being severely affected. The impact of loss of land for the project motorway will also result in the loss of 66 private structures.

12

Table 8: Affected Plots and Households Rayon/Village Number of Plots Number of Households Lankaran Lej 18 18 Haftoni 70 60 Talishli 30 30 Gurunba 35 34 Şağlaküçə 29 28 Lüveser 41 38 Kosalar 17 6 Yuxari Nuvedi 34 29 Sapnakeran 141 122 Şurük 42 41 Moğonojoba 27 24 Turkekeran 15 14 Şıxakeran 43 40 Mamusta 50 40 Hirkan 64 56 Daşdalıqçar 64 57 subtotal Lankaran 720 637 Astara Penser 4 3 Kokolos 93 58 Bala Şahağac 53 36 Kolatan 34 8 subtotal Astara 184 105 Total Section-B 904 742

Table 9: Degree of Impact on Productive Private Land Type of productive Land Total Number of Plot Households losing > 10% of land Agricultural Land 102 91 Pasture Land 18 15 Total 120 106

3.3 Impacts Assessment and Detailed Measurement Survey

25. At the PPTA stage after the boundaries of the ROW were staked and affected lots were identified, legal documentation for all the lots was retrieved from official sources and scanned. The details of the legal documents for each lot were transferred to the GIS. Based on this information, compensation was initially estimated. The detailed design confirmed most of the identified plots during the PPTA except for a minor realignment of a cross road at km 27+600, a river diversion at km 38+000 and another cross road at km 43+600 were introduced which affected 36 additional land plots. All information documented and the database of DPs created during PPTA was verified by the ARS during the detailed design stage. The inventory and assessment of the additional 36 plots included during the detailed design stage are incorporated in this LARP.

13

3.4 Features of Affected Land

26. The subproject area is comprised of large grazing lands with few structures. However, compact villages with dense residential development dot the landscape connected to each other by a thin network of local roads. The design of the subproject’s alignment to the greatest extent possible avoids entering any of these villages, and direct impacts are thus minimal.

27. The shapes of private land holdings in the subproject area are the result of public land redistributions following the dissolution of the Soviet system. Under the former Soviet system the irrigated lands were intensively cultivated on a large scale by collectives financed from state resources. Due to the excessive plot parcelization under the redistribution process, the land currently is economically unattractive as the dimension of each plot is too small to be conveniently cultivated. As a result, the land in the subproject area is generally uncultivated and used primarily for grazing, with large sections falling to the gradual encroachment of noxious weeds, primarily the thorny domestic blackberry which is inedible to most grazers. The land redistribution has resulted in the conversion of once intensively cultivated lands into wasteland, primarily due to a lack of financial resources at the individual landholder level to invest into land consolidation, machinery, seeds, fertilizer, labor, and transport. Without financial resources, the land lies fallow and evolves into waste lands.

28. After redistribution, a cadastral map pattern involving small corridor-like plots resulting from the slicing of the original collective plots evolved. The subdivision of the large collective lots, defined by the irrigation system, was most easily and fairly accomplished by creating slices of the original lots in the direction of the prevailing water flow, giving each lot the ability to be independently watered from the canal on the uphill side of the lot. The natural slope on the coastal plain is from west to east, and thus the pattern of lots today is of long and narrow lots running predominantly east and west.

29. The subproject alignment passes across the cadastral pattern with the result that a large number of lots will be affected, and a large number of landowners will be compensated. Because the lots are long, narrow, and predominantly running east and west, the north-south running alignment will typically take a minority of each lot, leaving the original landowner the majority piece, plus the cash from the compensation for the piece taken for the motorway. Therefore, numerous agricultural landowners will be left with lots, with perhaps better access due to the frontage road and agricultural underpass mitigation designs proposed and cash. Compensations for land are expected to provide sufficient cash for many landowners for the first time to be able to engage in intensive cultivation again and stop the gradual wasting of the grazed and fallow land. Since numerous lots will be affected, compensations will be widely distributed and a positive impact on future cultivation potential will be widely felt by the village populations.

30. There is another positive consequence of some interest related to the cadastral pattern of the lots. Past land distributions represented a subdivision of the larger Soviet plots without the benefit of modern subdivision policies that often give heavy weight to the provision of access to newly created lots. The frequent long and narrow lots will be effectively subdivided by the motorway ROW into smaller and more conventionally proportioned parcels. As a result of the motorway, the proportions of some parcels will be improved and improved access will be provided. This will have a positive impact on the landowners and village population.

14

3.5 Land Impacts

31. The Land Acquisition and Resettlement Framework (LARF) specifies that any residual section of a lot after ROW taking that is under 400 m2 should be considered unusable and, therefore, offered for purchase for the ROW and compensated accordingly. Land impacts are detailed in Table 10. The data is divided into private land and public land held by municipalities or the central government. Municipal lands are divided into two categories i.e. arable land and non-arable land. The arable municipal land refers to the land that has the potential for cultivation though it is left fallow, while the non-arable land refers to the land occupied by public infrastructure or devoted to public use, covering roads, irrigation and drainage canals, and utility easements.

Table 10: Summary Land Impacts Type of Land Lot Count % Area Taken (ha) % Private Land 925 65.2 95.161 59 Municipality Land 456 32.2 41.777 26 State Land 37 2.6 24.470 15 Total 1,418 100.0 161.408 100

32. A total of 1,418 lots were identified in the ROW, comprising 925 private lots, 456 Municipality lots and 37 state lots. The total area of the land taken from these lots for the ROW is 161.408 ha including 95.161 ha of private land. The land to be acquired for the project is of various types according to their use. Among the land to be acquired, there are 12.986 ha. of agricultural land, 7.5233 ha. of residential land and 0.2952 ha. is commercial land. The details of types of land being affected land are presented in the Table: 11.

Table 11: Type of land Impacts Type of land Area in Ha. % Agricultural Land 12.986 8.05 Pasture Land 1.096 0.68 Non-arable land 139.508 86.43 Residential land 7.5233 4.66 Commercial land 0.2952 0.18 Total 161.4085 100.00

3.5.1 Impacts on Land Lease land

33. At the PPTA stage, 5 leaseholders were reported to be affected in Section-B. However, during the LARP finalization and the document review process, it was found out that their leases have ended and the leaseholders have not continued using the land. Therefore there are no leaseholders affected under the Project. The municipality that these lands are no longer leased and not occupied or used by anybody.

3.6 Impacts on Buildings and Structures

34. Even though the subproject’s alignment was carefully selected to minimize impacts on residences and businesses, the alignment will require the demolition of 66 private structures that belong to 66 households. The details on structures and households affected by the subproject are presented in Table 12 and Table 13. All the 66 households which need to rebuild

15

their structures outside the acquired land and will be entitled to this relocation subsidy. There are 22 households which will lose their residential structures but have remaining land to rebuild their structures. Other affected structures such as cattle sheds, kitchens/ovens, bath place etc. can also be reestablished on the household’s remaining plot.

Table 12: Affected Buildings and Structures per Village Name of Village No. of Structures Lenkaran Rayon Haftony 1 Grunba 2 Shahlakucha 5 Luvasar 7 Yukhari Nuvadi 24 Sapnakaran 7 Hirkan 1 Dashdalajar 12 subtotal Lenkaran Rayon 59

1. Astara Rayon 2.

3. Kokolos 4. 6

5. Balaca Shahagaci 6. 1

7. subtotal Astara Rayon 8. 7

9. Grand Total 10. 66

Table 13: Type of Affected Private Buildings and Structures Type of Structures Lenkaran Astara Total % Houses 20 2 22 33 Cattle Shed 11 2 13 20 Poultry 2 1 3 5 Oven 5 1 6 9 Bath/WS 14 1 15 23 Shops 3 0 3 5 Café/ Restaurant 2 0 2 3 Workshop 2 0 2 3 Total 57 7 66 100

3.7 Impacts on Crops and Trees

35. A lot by lot crop survey of private lands carried out in the summer of 2007 indicates that the subproject area is not cultivated and is mainly used for the communal grazing of animals. Only 2.5% of the affected land is planted in vegetable crops or winter forage (clover) for animals. Public land in the subproject area is not cultivated, and is used primarily for communal grazing. The detailed information on the crops planted in the subproject area is provided in Table 14.

16

Table 14: Details of Cropped Area Impacted Land % of the Total Annual Yield Type of Crop Area (m2) Impacted Area (kilogram) Clover 12,745 0.8 25,765 Cucumber 4,904 0.3 21,345 Onion 3,725 0.2 15,462 Pea 3,658 0.2 1,276 Corn 5,110 0.3 6,427 Tomato 9,467 0.6 17,859 Total 39,609 2.5

36. There are no trees, orchards, or nurseries on the impacted lands, since all the lands were previously collective farm land. Only woody shrubs and vines of a variety of weed can be found on the uncultivated lands. The DPs cultivating the land will not lose their crops as these are only seasonal vegetable crops. From the date of notification to the actual date of acquisition of land and payment of compensation, there will be sufficient time to harvest these crops. After acquisition of land additional time will be available before the actual start of the construction work and therefore it will be ensured that there is no loss of standing crops.

3.8 Impacts on Businesses

37. The subproject will affect 7 commercial structures, comprising of three shops, two restaurants and two workshops. There are 7 households that will lose their business due to loss of these structures as presented in the Table 15. The average monthly income of these households varies between AZN230 to 300 per month. However these households will only lose their business temporarily, each for a maximum period of up to 3 months because they have enough land left and can easily reestablish their business on the remaining land at the same location. No worker/employee will be affected due to the loss of these business establishments.

Table 15: Details of Business Loss Name of Village Shops Café/Restaurant Workshop Total Haftony – 1 – 1 Grunba – – 2 2 Yukhari Nuvadi 2 1 – 3 Sapnakaran 1 – – 1 Total 3 2 2 7

3.9 Determination of Compensation Values

38. The unit compensation values have been determined using the following methodology:

 Land is valued at replacement rate calculated on the basis of assessment of land rates in the area as per recent transaction and in consultation with DPs. No deductions for taxes or transaction costs are applied.  Houses/buildings are valued at replacement value based on cost of materials, type of construction, labor, transport, and other construction costs. No deductions are applied for depreciation, salvaged materials, and transaction costs.

17

 Annual crops are valued at net market rates at the farm gate for the first year crop. In the eventuality that more than one-year compensation (i.e., for severe losses allowances) is due to the DPs the crops after the first year will be compensated at market value of the net harvest (harvest minus production costs and transport costs).  Fruit trees are valued based on age category (i.e., seedling; not yet productive; and productive). Productive trees are valued at gross market value of 1 year income X the number of years needed to grow a new tree with the productive potential of the lost tree.  Businesses losses are compensated on the basis of an analysis of the income of the affected business in consultation with business owners and local executive authorities. If there is a disagreement on the decided rate, the business owner will have to prove its claims with the appropriate tax records.

3.10 Land Values

39. The current market value of land affected by the subroject was determined by the special commission formed involving representatives from Ministry of Finance (MoF), LAD, municipalities and the executive powers. The market value was calculated in consultation with APs and based on recent land transactions. To cover small location-specific variations in land prices and other minor inconveniences associated with land acquisition, an additional payment of 20% of the land value is made to DPs, as required by an amendment to Presidential Decree 506-IIIQD dated 26 December 2007. The land values are shown below in Table 16.

Table 16: Unit Values for Agricultural Lands in the Project Area Unit Value for 20% premium Agricultural Land as per PD 506- Village (AZN per ha) IIIQD Total Lenkaran Rayon Lej 10,000 2,000 12,000 Haftoni 10,000 2,000 12,000 Talishli 10,000 2,000 12,000 Gurunba 10,000 2,000 12,000 Şağlaküçə 10,000 2,000 12,000 Lüveser 10,000 2,000 12,000 Kosalar 10,000 2,000 12,000 Yuxari Nuvedi 10,000 2,000 12,000 Sapnakeran 10,000 2,000 12,000 Şurük 10,000 2,000 12,000 Moğonojoba 10,000 2,000 12,000 Turkekeran 10,000 2,000 12,000 Şıxakeran 10,000 2,000 12,000 Mamusta 10,000 2,000 12,000 Hirkan 10,000 2,000 12,000 Daşdalıqçar 10,000 2,000 12,000 Astara Rayon Penser 6,000 1,200 7,200 Kokolos 6,000 1,200 7,200 Bala Şahağac 6,000 1,200 7,200 Source: Land Acquisition Department, ARS.

18

40. There are two exceptions to the above land valuation policy. One relates to the compensation to municipal governments for municipal lands in continuing non-arable public use. Roads, irrigation canals, and agricultural lot accesses are examples of this type of land use. For these lands, the central government has set normative values, which have been adopted for the valuation of lands of this land category. This LARP conforms to that national law. The other exception relates to state lands that are not leased and are assumed to be transferred at no cost to the ROW by the state.

3.11 Compensation for Buildings and Structures

41. Replacement costs of construction vary considerably depending on features of the structure, condition of the land and its access, utilities, and design. ARS has appointed an independent valuer to survey and determine the replacement cost of all affected structures. The structures were valuated according to 2011 price level on a case by case basis in consultation with the DPs. As per the valuation of structures conducted by the valuer, the total cost of these 66 structures is AZN1,147,814. These valuations take into account the average unit replacement costs for various buildings and structures assessed during the detailed design stage of the project, which are shown below in Table 17.

Table 17: Unit Replacement Cost for Buildings and Structures Building Type Unit Value (AZN per m2) Residential (modern) 360 Residential (traditional) 144 Non-residential building (farm) 72 Walled shed 60 Awning with floor 48 Awning without floor 36 Source: Land Acquisition Department, ARS.

3.12 Relocation Assistance

42. Relocation subsidies have been set at AZN500 per relocating household. This amount is generally sufficient to cover transport and one month living expenses for an average household in the subproject area. In case the relocation of heavy equipment is needed, this allowance may be increased based on actual transport costs. The relocation subsidy is intended to support the household during the transition while their structures are being rebuilt.

19

CHAPTER 4: OBJECTIVES, POLICY FRAMEWORK, AND ENTITLEMENTS

4.1 Legal and Policy Background

43. There are some regulatory instruments exist in the country providing the basis for regulating and managing acquisition of land, property, and productive assets and for compensation for the loss of these assets but there is no dedicated land acquisition act. These instruments include (i) Land Code (25 June 1999), (ii) Civil Code (1 December 1998), (iii) Cabinet of Ministers Decision No. 42 (15 March 2000), (iv) Cabinet of Ministers Resolution No. 110 (June 1999), (v) Decree on Application of the Road Law (2000), (vi) Decree on Additional Activities for Regulating the Use of Road Reserves (2004), (vii) Amendment to Civil Code (7th December 2007), (viii) President Decree No: 689 (26 December 2007) for implementing the amendment to Civil Code dated 7th December 2007, (ix) President Decree No. 506-IIIQD (25 December 2007); (x) Cabinet of Ministers Decision No: 54 dated 4th April 2009 on Rules for Valuation of Properties to be Acquired for State Needs.

44. Among these, the Land Code is a critical one as it (a) provides for the compensation for the loss of land offered on the basis of valuations made in accordance with the Azeri Standard Code No. 158, 1998; (b) allows recourse through courts; and (c) provides the basis for a land- for-land compensation option. The Civil Code and Land Code provide the basis for acquisition of land for projects of state interest while the Cabinet of Ministers Resolution No. 42 outlines procedures for the acquisition. Collectively, these regulations consider three options for the land acquisition payable only to the legal landowners: (i) land-for-land, (ii) compensation based on market prices, and (iii) dispute over compensation subject to resolution in the courts.

45. The Land Code provides for the protection of affected population as far as their rights and access to land are concerned. It also stipulates that the state is required to establish protection zones with a special (restrictive) regime for the purposes of construction and operation of industrial facilities (Article 22).

46. Regarding compensation for lost assets, including land and other productive assets, crops, forests, buildings, Article 70.5 of the Land Code requires paying compensation in advance where land is compulsorily acquired only to the legal owners of property. In addition, Article 8 refers to the need for compensation based on full market value or through providing another land plot or building of equal quality, size, and value. Article 84.5 also specifies that the beneficiary of the land acquisition is obliged to provide alternative land and fully compensate the landowners for the lost housing, production facilities, and other property. Article 101 of the Land Code and Article 247.2 of the Civil Code requires that land users be fully compensated for damage and lost crop that resulted from land acquisition, and that land owners be compensated for the liabilities before third parties and for the land and immovable property located on this land at market price.

47. Cabinet of Ministers Decree No. 42, Sections I and II requires compensation for losses, whether temporary or permanent, or damage to productive assets and crops. The Azeri legislation provides compensation payable for the loss of buildings on the property that is being affected only to the titled individuals and businesses. Under current legislation, compensation is payable for loss of land, buildings, crops, profit, and other damages arising from the acquisition of land for a project for only those who have legal titles to the property affected. The Land Code allows landowners an option for seeking recourse through the courts. Accordingly, when land is required for projects of national interest, compensation is initially offered on the basis of valuations made in accordance with the Standard Code No. 158 dated 1998. If landowners are

20

unhappy with this valuation, there is scope for agreeing on a revised valuation. In the event that such agreement cannot be reached, the acquiring authority can process its application for acquisition through the courts.

48. In April 2009, the Cabinet of Ministers issued Decision No: 54 which specifies the procedure to be followed for valuation of properties needed for state needs and payment of compensation to the DPs. This decree has provision for the rehabilitation of income loss and payment of compensation on market rates. The Decree on the Application of the Road Law and the Decree on Additional Activities for Regulating the Use of Road Reserves designate the Cabinet of Ministers as the authority to approve road reserves and acquisition of affected properties.

49. Cabinet of Ministers Decision No. 54 (April 2009) specifies that (i) the purchase price of the property should be equal to the market price of the property; (ii) in estimating the purchase price or sale price of a property and plot of land, proprietor’s damages resulted from the purchase of property, as well as income lost and loss connected with the preterm end of commitments for the third parties also to be considered; (iii) loss of access to agricultural land needs to be compensated or restored by the acquiring authority; (iv) the cost of registration of properties to be borne by the requiring agency; (v) the compensation should include the cost of transportation in case of any change of business or displacement; (vi) the DPs are eligible and should be allowed to take salvaged materials from the demolished buildings if any, (vii) professional appraisers (valuer) shall be engaged to determine acquisition price; (viii) the valuer is recommended to consult the DPs and negotiate the price during the valuation of properties; (ix) recommendations for the calculation of estimate cost shall be prepared by the State Committee for the Management of State Property; and (xi) the DPs will be informed about the calculation of compensation and the amount of compensation will be disclosed to them.

50. By the time of issue of Cabinet of Ministers Decision No: 54, the ARS had already initiated the process of land acquisition planning. Based on the recommendation from the Ministry of Finance (MoF), the ARS got the approval from the Deputy Prime Minister’s office to be exempted from Decision No: 54 for this subproject. However, keeping in view of the spirit of the decision, ARS partially adopted the Decision No: 54 by following the procedure of sending individual notification to the DPs on land acquisition requirement and payment of compensation with the help of rayon akimats and people’s representatives in municipalities.

51. The ADB Safeguard Policy Statement, 2009, applies to losses due both to physical and economic displacement caused by involuntary acquisition of land and is based on the basic principles set out below.

 Involuntary resettlement should be avoided or wherever feasible.  Where population displacement is unavoidable, it should be minimized by providing viable livelihood options.  Replacing what is lost: If individuals or a community must lose all or part of their land, means of livelihood, or social support systems, so that a project might proceed, they will be compensated and assisted through replacement of land, housing, infrastructure, resources, income sources, and services, in cash or kind, so that their economic and social circumstances will be at least restored to the pre-project level. All compensation is based on the principle of replacement cost.  Each involuntary resettlement is conceived and executed as part of a development project or program. ADB and executing agencies or project sponsors, during project

21

preparation, assess opportunities for affected people to share project benefits. The affected people need to be provided with sufficient resources and opportunities to re-establish their livelihoods and homes as soon as possible, with time-bound action in coordination with the civil works.  The affected people are to be fully informed and closely consulted. Affected people are to be consulted on compensation and/or resettlement options, including relocation sites, and socioeconomic rehabilitation. Pertinent resettlement information is to be disclosed to the affected people at key points, and specific opportunities provided for them to participate in choosing, planning, and implementation options. Grievance redress mechanisms for affected people are to be established. Where adversely affected people are particularly vulnerable groups, resettlement planning decisions will be preceded by a social preparation phase to enhance their participation in negotiation, planning, and implementation.  Social and cultural institutions: Institutions of the affected people, and, where relevant, of their hosts, are to be protected and supported. Affected people are to be assisted to integrate economically and socially into host communities so that adverse impacts on the host communities are minimized and social harmony is promoted.  No formal title. Indigenous groups, ethnic minorities, pastoralists, people who claim for such land without formal legal rights, and others, who may have usufruct or customary rights to affected land or other resources, often have no formal legal title to their lands. The absence of a formal legal title to land is not a bar to ADB policy entitlements. APs who neither have formal legal rights nor recognized or recognizable claims to land should be compensated for all non-land assets and for other improvements to the land.  Identification: Affected people are to be identified and recorded as early as possible in order to establish their eligibility through a population record or census that serves as an eligibility cutoff date, preferably at the project identification stage, to prevent a subsequent influx of encroachers or others who wish to take advantage of such benefits.  The Poorest: Particular attention must be paid to the needs of the poorest affected people, and vulnerable groups that may be at high risk of impoverishment. This may include those without legal title to land or other assets, households headed by females, the elderly or disabled and other vulnerable groups, particularly indigenous peoples. Appropriate assistance must be provided to help them improve their socio- economic status.  The full resettlement costs are to be included in the presentation of project costs and benefits. This includes costs of compensation, relocation and rehabilitation, social preparation and livelihood programs as well as the incremental benefits over the without project situation (which are included in the presentation of project costs and benefits). The budget also includes costs for planning, management, supervision, monitoring and evaluation, land taxes, land fees, and physical and price contingencies. Where loans include subprojects, components or investments prepared only after project approval and loans through financial intermediaries that are likely to cause involuntary resettlement, sufficient contingency allowance must be allocated for resettlement prior to approval of the loan. Similarly, resettlement plans should also reflect the timeframe for resettlement planning and implementation.  Eligible costs of compensation: Relocation and rehabilitation may be considered for inclusion in ADB loan financing for the project, if requested, to assure timely

22

availability of the required resources and to ensure compliance with involuntary resettlement procedures during implementation.  Compensation and rehabilitation is to be provided before the land is acquired.

52. Differences between Azeri law and regulations and ADB’s policy are outlined below in Table 18.

Table 18: Comparison of Azeri Laws and Regulations on LAR and ADB’s Safeguard Policy Statement Azeri Land Laws and Regulations ADB’s SPS Land compensation only for titled All DPs, including non-titled DPs, are landowners. eligible for compensation of all non-land assets. Only registered houses/buildings are All affected houses/buildings are compensated for damages/demolition compensated for building caused by a project. damages/demolition caused by a project. Crop losses compensation provided only Crop losses compensation provided to to registered landowners. landowners and sharecrop/lease tenants. Land valuation based on current market Land valuation based on current market value. rate/replacement value. Land Acquisition Department is the only Disputes, complaints and grievances pre-litigation final authority to decide are resolved informally through disputes and address complaints regarding community participation in the quantification and assessment of Grievance Redress Committees, local compensation for the affected assets. governments, and NGO and/or local community based organizations. The decisions regarding land acquisition Information related to quantification and are discussed only between the costing of land, structures and other landowners and the Land Acquisition assets, entitlements, and amounts of Committee. compensation and financial assistance are to be disclosed to the affected persons prior to appraisal. No provision for income/livelihood ADB’s policy requires rehabilitation for rehabilitation measure, allowances for income and livelihood, for severe severely affected persons and vulnerable losses, and for expenses incurred by groups, or resettlement expenses. affected persons during the relocation process.

53. In principle, Azeri laws and regulations relevant to LAR and ADB’s Policy adhere not only to the objective of compensation for affected families, but also to the objective of rehabilitation. The major differences between Azeri Laws and ADB policy are recognition of non- titleholders and additional support for severity of impacts. To reconcile the existing gaps between the Azeri laws and regulations and ADB’s Policy, ARS prepared in June 2007 the Resettlement Framework (RF) for the Program and updated in 2011 to ensure compliance with the SPS-2009, ensuring compensation at replacement cost of all items, rehabilitation of informal settlers, and the provision of subsidies or allowances for DPs who may be relocated, suffer business losses, or may be severely affected.

23

4.2 Compensation Eligibility and Entitlements for the Project

54. LAR tasks under Project 3 will be implemented according to a compensation eligibility and entitlements framework in line with both Azeri laws and regulation and ADB’s Policy. The entitlements matrix is in Table 19.

Table 19: Entitlement Matrix Displaced Asseta Specification Person Compensation Entitlements Permanent All land losses Farmer/  Land for land compensation with plots of equal impact on independently Titleholder value and productivity to the plots lost; or arable land from impact  Cash compensation for affected land at severity replacement cost based on market valueb free of taxes, registration, and transfer cost plus 20% premium as per PD 506-IIIQD December 2007.  Residual portions of plots affected by the required ROW that are reduced to less than 400 m2 or rendered unusable by alterations in access, irrigation, or workability will be included in the affected land and compensated as above indicated. Leaseholder  Renewal of lease in other plots of equal value/productivity of plots lost, or  cash corresponding to the annual yield of land lost for the remaining years of the lease up to a maximum of 10 years. Sharecroppers  Cash compensation equal to the market value of the lost harvest share once (temporary impact) or twice (permanent impact). Agricultural  Cash indemnity corresponding to their salary workers losing (including portions in kind) for the remaining part their contract of the agricultural year. Squatters  Actual crop loss compensation and resettlement assistance will be provided (see below). Additional Farmer/  1 severe impact allowance equal to market value provisions for Titleholder of 1 net harvest of the affected land for 1 year severe impacts Leaseholder (inclusive of winter and summer crop and (more than additional to standard crop compensation). 10% of land Sharecroppers  1 severe impact allowance equal to market value loss) of share of harvest (additional to standard crop compensation). Squatters  1 severe impact allowance equal to market value of net harvest of the affected land for 1 year (additional to standard crop compensation). Residential/ Titleholder  Land for land compensation through provision of commercial a plot comparable in value/location to plot, or land  Cash compensation for affected land at full replacement cost free of taxes, registration, and transfer costs. Renter/  1-3 months allowance. Leaseholder Squatters  Provision of a free or leased plot in a government resettlement area or a self-relocation allowance. Houses and All relevant  Cash compensation at replacement rates for

24

Displaced Asseta Specification Person Compensation Entitlements structures displaced affected structure and other fixed assets free of persons salvageable materials, depreciation and transaction costs. In case of partial impacts full cash assistance to restore remaining structure. Crops Crops affected All displaced  Crop compensation in cash at full market rate for persons harvest losses. (including squatters Trees Trees affected All displaced  Cash compensation shall reflect income persons replacement. (including squatters) Business Temporary or All displaced  Business owner: (i) cash compensation equal to Employment permanent loss persons one year income, if loss is permanent; (ii) cash of business or (including compensation for the period of business employment squatters) interruption, if loss is temporary.  Worker/employees: Indemnity for lost wages for the period of business interruption up to a maximum of 3 months. Relocation Transport and All displaced  Provision of sufficient allowance to cover transitional persons transport expenses and livelihood expenses for livelihood costs (including one month. squatters) Community  Rehabilitation/substitution of the affected assets structures/utilities (i.e., mosques, footbridges, roads, schools, health centres). Vulnerable Displaced  Employment priority in project-related jobs during people’s persons below the construction of the motorway, and after the livelihood poverty line project completion (e.g., road maintenance and roadside businesses). a Other impacts unidentified may occur during the implementation of the subproject. Following their identification during subproject implementation this entitlement matrix and description of compensation entitlements will be revised and updated accordingly. b Section 3.9 provides a detailed definition of the methodology to evaluate replacement cost.

4.2.1. Eligibility

55. DPs entitled for compensation or at least rehabilitation provisions under the subproject are (i) DPs losing land and other assets with legal title/traditional land rights will be compensated, and DPs will be rehabilitated, as specified in paragraph 57; (ii) tenants and sharecroppers; (iii) owners of buildings, crops, plants, or other objects attached to the land; and (iv) DPs losing business, income, and salaries.

56. Compensation eligibility will be limited by a cut-off date based on the completion date of the census and detailed measurement survey (DMS) studies for the road section. It is on this date that all impacted persons and assets will be identified. Any land transfers or modifications before the census date will be considered affected by the subproject. DPs who settle in the affected areas after the cut-off date will not be eligible for compensation. They, however, will be given sufficient advance notice, requested to vacate premises and dismantle affected structures prior to subproject implementation. Their dismantled structures will not be confiscated and they

25

will not pay any fine or suffer any sanction. Expropriation eviction will only be considered after all other efforts are exhausted.

4.2.2. Compensation Entitlements

57. Entitlement provisions for DPs losing land, houses, and income losses and rehabilitation subsidies will include provisions for permanent and temporary land losses, house and buildings losses, crops and trees losses, a relocation subsidy, and a business losses allowance based on tax declarations. These entitlements are detailed below:

 Agricultural land impacts. DPs with legal title/traditional land rights will be compensated at replacement value in (i) cash at current market rates, or (ii) through replacement land equal in value/productivity to the plot lost. Eventual transaction taxes/fees will be paid by the EA or waived by local governments.1 Squatters will be provided with actual crop loss compensation and resettlement assistance (see below).  Residual agricultural land impacts. Residual portions of plots affected by the required ROW which are reduced to less than 400 m2 or rendered unusable by alterations in access, irrigation, or workability will be included in the affected land and compensated as above indicated.  Severe impact losses. When >10% of a DP’s income or agricultural land is affected, DP (owners, leaseholders, sharecroppers, and squatters) will get an allowance for severe impacts equal to the market value of a year’s net yield of the land lost, in addition to standard crop compensation.  Residential/commercial land. Legal settlers will be compensated at replacement rate either (i) in form of land for land or (ii) cash at current market rates free of transaction costs and depreciation. Renters/leaseholders will receive a 3 months rent allowance. Squatter settlers will be rehabilitated through the provision of a free or leased plot in a public resettlement area or through a self-relocation allowance.  Houses, buildings, and structures will be compensated in cash at replacement cost free of deductions for depreciation, salvaged materials, and transaction costs irrespective of the registration status of the affected item. The cost of lost water and electricity connections will be included in the compensation.  Crops. Cash compensation at current market rates for the gross value of 1 year’s harvest losses. Crop compensation will be paid both to landowners and tenants based on their specific sharecropping agreements.  Trees. Cash compensation will reflect income replacement (see Section 3.4).  Businesses. If business is lost permanently it will be compensated in cash equal to a 1-year income based on tax declaration or, if unavailable, based on the official minimum salary; temporary business losses will be compensated in cash for the business interruption period based on tax declaration or, if unavailable, the official minimum salary of AZN752 per month.  Business workers and employees. Indemnity for lost wages for the period of business interruption up to a maximum of 3 months.

1 Market rates were assessed through a survey of prevalent land prices in subproject areas. The assessment was carried out by local government institutions. 2 As per Presidential Decree No: 3005 dated 25th August 2008.

26

 Agricultural land leaseholders, sharecroppers, and workers. Displaced leaseholders will receive either a renewal of the lease in other plots or cash corresponding to the annual yield of land lost for the remaining years of the lease up to a maximum of 10 years. Sharecroppers will receive their share of harvest at market rates (if impact is temporary) plus 1 additional crop compensation (if the land is lost permanently). Agricultural workers, with contracts to be interrupted, will get an indemnity in cash corresponding to their salary in cash and kind for the remaining part of the agricultural year (inclusive of both winter and summer crop).  Relocation subsidy. DPs forced to relocate will receive a relocation subsidy sufficient to cover transport costs and living expenses for 1 month.  House renters. House renters who have leased a house for residential purposes will be provided with a cash grant of 3 months’ rent at the prevailing market rate in the area and will be assisted in identifying alternative accommodation.  Community Structures and public utilities will be fully replaced or rehabilitated to satisfy their pre-subproject functions.  Vulnerable people (DPs below the poverty line) will be given priority in subproject- related jobs.  Graves. In case that a grave is found during the construction of the subproject motorway, the concerned local government may offer a place within a nearby cemetery. The families or relatives of the buried person will also be informed and requested to work with the local government to relocate the grave. If the families and relatives of the buried person cannot be identified, the local government will relocate the grave to an appropriate place. All costs incurred during the relocation of graves will be funded by the Government from the contingency of the resettlement budget.

4.2.3. Land Acquisition Modality

58. Land can be acquired by payment of the appropriate replacement cost in cash or land for land to displaced persons. If the DP disagrees on land compensation rates or refuses to relinquish a needed property for other reasons, ARS can file for expropriation proceeding with the relevant court of law or legal institution. If writ of possession for the needed plot is granted and the amount equivalent to the replacement cost of the affected land is deposited in escrow to the name of the landowner, ARS would be able to take the property prior to a formal court judgment on the final compensation rates. Land acquisition through negotiation will be taken as the first approach for acquiring land. However, ARS will resort to expropriation if agreement is not reached.

4.3 Provision for Land for Land Compensation

59. As per the entitlement matrix, DPs losing lease land as a result of the subproject are entitled to renewal of lease in other plots of equal value/productivity of plots lost. All fees, taxes and cost of transfer will be borne by the municipality and no additional charges of any kind will be imposed on the lease holders. However, for this subproject there were no affected leaseholder.

4.4 Gender Impact and Mitigation Measures

60. In general women compose about one half of the total affected population. Women have important economic roles in project areas and engage in a very wide range of income making activities in the agricultural and marketing sectors. The subproject will pay particular attention to

27

ensure that women are the recipients of the compensation pertaining to their activities and that women who are de-facto household heads are clearly listed as beneficiaries of compensation and rehabilitation proceedings under the Project. The LARP includes the following measures:

 Included women in the impact enumerators.  Women were invited in the consultation processes to determine and negotiate for compensation entitlements and implement the LARP.  Special attention will be given to the impact of resettlement on women during monitoring and evaluation of the LARP.  registration of land titles will be made in the name of both spouses.

28

CHAPTER 5: STAKEHOLDER CONSULTATION AND DISCLOSURE

5.1 Public Participation and Documents Disclosure

61. Officials of rayon, municipal (baladiya) and villages (kant) were informed about the subproject, and they assisted in carrying out the inventory of affected assets and the census of DPs and DMS. In the preparation of the LARP, DPs were informed of the results of the census, DMS and valuation of their affected lands. Based on the results of these consultations, individual agreements were signed with the DPs. Consultations continued during the conduct of detailed valuation of affected structures. DPs feedbacks in these consultations were given due consideration in revising/finalizing the LARP.

62. During the initial LARP preparation in 2007, the NGO, Azerbaijan Women in Development Center assisted in the stakeholder consultation. Their assistance in these consultations included:

 Identification of impacted communities and preparation of a listing and timetable of proposed community meetings;  Arranging meetings between local officials and the project preparation consultant to discuss the project and community involvement plans and needs;  Arranging community meeting space;  Announcement of public community meetings in advance of the meetings in public places and media;  Preparation of public meeting space with chairs, presentation area, and display areas for maps and documents;  Distribution of project information materials;  Displaying project map of the alignment and impacted lands and objects;  Collecting names and contact information from participants in public meetings;  Conducting public meetings and making a presentation of the project, its likely impacts, and the policies of ADB and the Government for compensating and mitigating the impacts;  Conducting question and answer sessions to encourage public comment;  Documenting all public comments by audio recording the meeting and transcribing important statements and comments into written form;  Writing a Community Meeting Summary Report that included all the information and drafting recommendations concerning the key points made by the public

63. During the detailed design stage DPs were further informed of their impacts, entitlements and timing of implementation. Consultations were also held during the verification of land and valuation of land and structures. This LARP will be made available to the DPs at the PIU after approval by ADB. The English version of the LARP will be disclosed on the ADB website after it is endorsed by ARS. The Azeri version of the LARP will be disclosed to the DPs. A pamphlet in Azeri, summarizing compensation eligibility and entitlement provisions, grievance mechanism, and implementation schedule was distributed to DPs during the verification of ownership by ARS. An English translation of the pamphlet is attached as Appendix-1.

29

5.2 Outcomes of Stakeholder Consultations

64. Details of all consultations carried out with DPs are given in Appendix-2. These consultations include: (a) initial consultations carried out in 2007 with local people in the project preparation stage, as noted above in paragraph 62; and (b) subsequent consultations carried out with new DPs in the detailed design stage in 2010.

65. Five consultation meetings involving the 16 affected villages were conducted during the first week of August 2007. The meetings were held in the villages Sapnakaran, Yuxarı Nüvədi, Kosalar, Moqonojoba, Lüvasar, Şəhlaküçə, Haftoni, Talışlı Hirkan, Daşdaliqcar, Mamusta, Şiyəkəran, Kakalos, Pensər and Kolatan villages of Lenkaran rayon. At these meetings, a presentation in Azeri was made detailing the project and compensation policies that would be adopted with DPs. Maps of all the impacted lots were presented. The disclosure booklet explaining the compensation policy in the LARF was made available. A question and answer session followed the presentation.

66. The questions received and comments made at the meetings, and the actions taken during the preparation of this LARP and the detailed design are summarized in Table 20.

Table 20: Stakeholder Questions and LARP Action Issues/Questions Raised Response/Action Will the compensation I receive The amount of compensation is based upon the enough to build a house? locally approved costs per square meter for the full replacement of any structure, not on the market value of the structure. There are some people who were Compensations are not affected by the status of local not paying taxes for more than 3 property take payments. Land taxes should be paid. years. How things will be solved for If anyone hasn’t paid land taxes it would be better to them? pay as soon as possible. Otherwise, while documents are being processed, one might have problems. Both the ADB and the World Bank Masallı – Astara Southern Road Corridor Project is will provide loans for the motorway being implemented with loans from the Asian to Alyat, is there any difference in Development Bank and will apply its policies to all the payment provided by them? compensations. The World Bank has its own policies that will apply north of Masalli. The policies of the 2 banks are similar though the units prices for land and reconstructions vary by village so compensations maybe quite different from village to village. These differences are clearly noted in the LARP. When road construction works are All municipal lands taken will be paid for at the finished, will the municipality of the government prescribed land values. No other village gain any income from the payments to the municipality for road use are road? proposed. I have affected 5000 sq. m of my Any residual portions of an impacted lot less than 400 land, and have left just 1500 sq. m. sqm can be purchased by the project. Any residuals What shall I do with this? that are not useful can also be purchased and have been evaluated on a case by case basis and in some cases; residuals larger than 400 sq m have been recommended for purchase.

30

Issues/Questions Raised Response/Action I bought land to build house, which The compensation for land will be estimated is now unfortunately impacted. How accordingly to market price. Thus, those impacted will this issue will be solved? be able to procure new land and build a house on the new lot. There is a gravel field and pasture Whoever owns them accordingly to local cadastral in the village. What happens with map will be compensated. If it belongs to the them? Municipality, they will receive compensation. The owner of the land died, who His/her heirs will receive the compensation. The will receive compensation? names of heirs, if not documented in land titles, are not noted in the LARP. Before we were informed that 179 Initially the project was developed by Iranian structures will be impacted, now specialists, and since it was impacted numerous there are much fewer. Can you apartment houses the Azerbaijan Government didn’t clarify please? accept it. The second project was developed by ADB PPTA Consultant (TERA) upon request of the Government of Azerbaijan. While working on this project we tried to minimize impact and we succeeded. My house is affected but I have Rakif Khojayev, personally 3 times visited your never been interviewed. Why? property, but you were out. Any house impacted, will receive compensation. The LARP details the field visits and measurements taken of all structures to be impacted by the subproject. Will there be any access to the The preliminary motorway design preserves all local forest from the village. We go there access roads and adds many more to ensure for pasture. agricultural access to all impacted lots. However, the Moscow Forest is a nature area to be preserved and will be fenced to eliminate all grazing impacts. I have been asked to provide legal The RP documents all impacted lots and notes the documents for my land, since it was landowner of record. The LARP team investigated affected, and now being told that I and found out that your property is not affected. You am not affected. I am confused will not receive compensations. My request is to be informed about The LARP does not detail the program of local road the Mamusta – Pensər road. improvements that will also be covered in the same loan as the motorway funding. However, it is planned be rehabilitated. What happens with irrigation The final design of the motorway to be completed in channels? 2008 will fully analyze the impacts and mitigation works need to preserve all irrigation channels both during construction and after. What happens with purchased The LARP fully details all policies and procedures that lands? will be used to purchase impacted lands. If a house is impacted will I be Residential property is hard to find for sale in each provided with another land to build village, though local officials are assisting in the a house? location of lots for land trades.

31

Issues/Questions Raised Response/Action Who will pay compensation? The LARP states that all compensations will be transferred to private accounts so finally everyone personally will withdraw his amount of payment. The Azeri government will make all payments from government funds. What is compensated when land is The preliminary design is for a motorway 32 meters impacted by heavy construction wide on a 60 right of way. There is sufficient land in equipment the ROW work areas for heavy machinery. If any other lands are impacted, the affected person can apply for compensation and they will receive it if the claim is valid. Since our household land is If the residual part of your land is too small, it can be impacted we would like to request purchased as well. If you want to find land you can Municipality of the village to help us issue you request to the local Governance of the to find another land village and region as well. My land was staked by I didn’t find Staking flags are not final. If your name is not in the my name in the list of affected LARP list you are not affected. The RP shows maps people of all lots affected by the preliminary design

32

CHAPTER 6: GRIEVANCE REDRESS MECHANISM

67. A grievance mechanism will be available to allow a DP appealing any disagreeable decision, practice or activity arising from land or other assets compensation. DPs will be fully informed of their rights and of the procedures for addressing complaints whether verbally or in writing during consultation, survey, and time of compensation. Care will always be taken to prevent grievances rather than going through a redress process. This can be obtained through careful LAR design and implementation, by ensuring full participation and consultation with the DPs, and by establishing extensive communication and coordination between the affected communities, the ARS LAD and local governments. Complaint and grievances will be addressed through the process described in Table 21.

Table 21: Grievance Resolution Process Land and Crops Compensation Issues Step 1 Complaints resolution is first attempted at the village levels with the involvement of the PIU and village authorities, NGO, and informal mediators. Step 2 If still unsettled, a grievance can then be lodged to the Rayon LAR Commission3. Within 15 days the Rayon LAR Commission will dismiss the case or recommend its settlement to the LAD. Step 3 After the Rayon LAR Commission, intervention no solution has been reached a grievance can be directly lodged to the LAD4 (the LAD’s address is provided in the footnote). The DP must lodge the complaint within 1 month after receiving response on the original complaint from the Rayon LAR Commission and must produce documents supporting his/her claim. ARS will provide a response within 15 days of registering the complaint. The LAD decision should be in compliance with the provisions of this RP. Step 4 Should the grievance redress system fail to satisfy the DP, he/she can pursue further action by submitting his/her case to the appropriate court of law.

68. The LAD field team will assist in handling complaints. Since the ARS headquarters is situated in the capital of city of Azerbaijan, the DPs can contact the ARS through the field representative of LAD at the rayon level. The Rayon LAR commission will meet at least once a month to discuss complaints or queries from DPs and the general public. The field representative of LAD/PIU will be responsible for recording and following up on complaints received about the subproject.

69. To-date, complaints and questions received and resolved/clarified at the initial stage of the grievance process were mainly about identification of land boundaries and impact areas, documentation requirements, procedures for compensation, inventory of cultivated crops, etc. No serious complaint has so far been submitted by DPs.

3 People’s representatives, including DPs, are involved in the rayon commission. 4 The Land Acquisition Division is located in the AzerRoadService Open Joint-Stock Company, 72/4, Uzeyir Hajibeyov Street, AZ1010, Baku (telephone number: +994 12 493 0045).

33

CHAPTER 7: INSTITUTIONAL ARRANGEMENTS

70. The implementation of this LARP involves different agencies, including LAR Commission, ARS LAD, the State Committee for the Management of State Property, the State Land and Cartography Committee, the Executive Power of each Rayon, and ADB.

7.1 Central LAR Commission

71. A Central LAR Commission was established which comprises representatives of the Ministry of Transport (as chair), Ministry of Economic Development, Ministry of Finance, State Land and Cartography Committee, and the State Service for Registration. The function of this commission is to ensure effective interagency coordination, carry out a final review of the LARP, and provide the official approval for its final financing and implementation.

7.2 AzeriRoadService Open Joint-Stock Company (ARS)

72. ARS has overall responsibility for the Program including the preparation, implementation and financing of all LAR tasks and for interagency coordination. ARS will exercise its functions through the PIU and LAD, which will be responsible for general project execution, and tasked with day-to-day project activities at rayon/subproject levels. For the PIU, LAR tasks will be managed by a specific unit within LAD, which will organize and internally monitor preparation, approval, and implementation of resettlement plans (including surveys, asset valuation, and community consultation), and LAR-related interagency coordination. In the implementation of these tasks, LAD will receive specific technical assistance from:

(i) A Resettlement Team under the project preparatory or design and supervision consultant who will assist in LAR planning, implementation, internal monitoring and evaluation, and training of the executing agency and local governments in the requirements of ADB’s SPS (2009); and (ii) A supervision consulting team hired to provide on-site resettlement plan preparation assistance for surveys, base-line information gathering or consultation with affected persons;

7.3 Local Governments

73. Local governments at the rayon level have jurisdiction for land administration, valuation, and acquisition while a number of other local officials (the local representatives of the State Land Committee and Institute of Cartography) will carry out specific roles such as titles identification and verification. Functions pertaining to compensation of assets different from land (i.e., buildings and crops) or income rehabilitation also fall on local governments and, more specifically on the relevant rayon office.

74. In order to provide effective interagency coordination and officially endorse the surveys and the compensation rates, each affected rayon government will establish a rayon LAR commission inclusive of the following local government institutions: Department of Roads, Department of Finance, Department of Land and Cartography Commission, local division of the Ministry of Ecology and Natural Resources, Real Estate Registration Service, local executives, and relevant local authorities and organizations.

34

7.4 External Monitoring Consultant (EMC)

75. An external monitoring consultant (EMC), has been hired to conduct compliance rd monitoring and evaluation/3 party validation of implementation of the LARPs. The EMC report will be submitted to ADB for review. Issuance of notice-to-proceed (NTP) for civil works contracts will be conditional to the satisfactory review of the ERM compliance report by ADB.

7.5 Capacity Building Assessment and Initiatives

76. The institutional, organizational, and staffing issues of the Land Acquisition Division (LAD) were evaluated in the preparation stage (PPTA) of the project to determine the scope and capability of present ARS operations for land acquisition support.5 In anticipation of the needs of the Road Network Investment Program, the LAD was established in ARS in July 2005. The main responsibility of LAD is to coordinate all LAR activities undertaken by ARS, including consultation with, and information disclosure to displaced persons and organizations; liaison with government agencies on approval and clearances for land acquisition and resettlement plans, preparation of land compensation documents for submission to the Ministry of Finance for approval and budget allocation to ARS. ARS manages the payment process using the budgeted funds provided by the Ministry of Finance for the authorized purchases consistent with the approved RP.

77. The LAD is directed by a chief assisted by Deputy Chief and supported by 11 engineers and two technical assistants. Its office is located in Baku, the Capital city of Azerbaijan. Automated office equipment is available for use. However, there is a continuing reliance on paper documentation and limited automation of records. Field logistical support for LAD was limited in the early subproject preparation stages. This support has been significantly strengthened in 2010.

78. LAD staff previously had limited experience in resettlement planning and implementation consistent with ADB’s SPS (2009). LAD participated in the implementation of a number of road investment projects,6 but has yet to formally establish standard operating procedures consistent with ADB policies and relies on established expropriation procedures. A Procedural Guideline has been formulated by consultants7 and discussed with LAD as the basis for standard operating procedures for resettlement planning and implementation consistent with ADB guidelines.

79. The ADB-assisted East–West Highway Improvement Project included an institutional strengthening component that improved the capacity of LAD staff for preparation and implementation of resettlement planning documents for road investment projects through consulting services and training.8 This institutional strengthening component was implemented by a team of international and national consultants. An intensive training program has also been carried out as a sub-component of Project 1 of the MFF to develop LAD’s capacity for planning,

5 Rhein Ruhr International, Phase I: Capacity Building for LAD-RTSD on Land Acquisition and RP Preparation Draft Final Report, September 2006. 6 Including the Baku circumferential road project, Baku–Qazakh road project, Baku–Russian border road project, and the 22 km section of the Alyat–Masalli motorway project, where involuntary resettlement was involved, though not to the degree encountered in the Masalli–Astara section. 7 ibid. 8 ADB. 2005. Report and Recommendation of the President to the Board of Directors on Proposed Loans to the Republic of Azerbaijan for the East–West Highway Improvement Project. Manila.

35

implementation, monitoring, evaluation, and reporting of resettlement activities. ADB’s support for capacity development will enable ARS to fully implement the LARP under the Project.

80. Presently PIU has appointed a social safeguard specialist for day today R&R activities and looking after the preparation and implementation of implementation of Resettlement Plan. A flow diagram illustrating the sequence of activities to be carried out to implement this LARP is shown overleaf in Figure 2.

Figure 2: Land Acquisition and Resettlement Organization Chart and Action

Ministry of Transport Ministry of Finance

ARS

Land Acquisition Technical Assistance Team Division (LAD)  PIU  PPTA Consultant  Supervision Consultant  External Monitoring Consultant

Verification  Representative of LAD of LARP  Representative of Executive Power  Representative of Municipality

Special Commission for valuation of Properties Valuation of Assets  Representative of MOF  Representative of LAD  Representative of Executive Power  Representative of Municipality Notification for  Representative of LAD LA to DPs  Representative of Municipality

Legal Document  District Office of SCMSP Verification  Displaced Persons

Agreement  Representative of LAD between ARS and  Displaced Persons DPs  Representative of Notary Public Office

Land  Representative of LAD Registration  District Office of SCMSP

Payment of  Representative of LAD Compensation  Displaced Persons

36

CHAPTER 8: RESETTLEMENT BUDGET AND FINANCING

8.1 Compensation for Privately-owned Land

81. The compensation for lands taken for the ROW of the motorway accounts for the majority of the resettlement cost for the Project. The calculation of these costs is based on the detailed measurement survey consisting of legal document, field surveys, staking of the alignment centerline, ROW boundaries and lots lines. There are 742 household losing land will be eligible for compensation for land. Table 22 summarizes the compensation cost estimates for lands taken for the ROW.

Table 22: Land Compensation Estimates Land Area Unit Rate per Land requirement (in ha.) ha. (in AZN) Total Land taken in Lankaran rayon 75.981 12,000 911,772 Land taken in Astara rayon 19.180 7,200 138,093 Subtotal 95.161 1,049,865 Cost of registration @ 400AZN per plot 925 400 370,000 Total 1,419,865

8.2 Compensation for Structures

82. There are 66 structures of various nature that belong to 66 households that will be affected in the subroject. The cost of each structure was estimated by the independent valuer appointed by ARS at current market value without depreciation and it was calculated on case by case basis, taking account of the typical unit costs shown in Table 19, size, materials, location and condition. The total replacement cost of the 66 structures assessed by the valuer is AZN1,147,814.

8.3 Rehabilitation Allowance

83. As per the identified impacts, the following three types of entitlement arise under the subproject: (i) relocation subsidy for loss of structure, (ii) cash compensation for temporary loss of business people losing commercial structures; and (iii) severe impact allowance equal to market value of 1 net harvest of the affected land for 1 year (inclusive of winter and summer crop and additional to standard crop compensation). The eligible rehabilitation allowance and estimated cost is summarized in the following section.

8.3.1 Relocation Subsidy

84. All the 66 households losing their structures will need to rebuild their structures in another location outside the acquired land and therefore these households are eligible to receive relocation subsidy. The relocation subsidy will cover transport and one month living expenses and it is estimated at AZN500 per household keeping in view the cost of transportation and average one month livelihood expenses in the subproject area. The estimated relocation subsidy under the subproject is presented in the Table 23.

37

Table 23: Relocation Subsidy Unit Cost Total Item No. of Aps Duration (AZN) (AZN) Relocation subsidy to cover transport 66 One time 500 33,000 and one month living expense Total 33,000

8.3.2 Rehabilitation Allowance for Business Loss

85. There are 7 households engaged in commercial activities that will be affected by the subproject. The impact will be temporary and will be for a maximum period of only 3 months as the commercial activities can be re-established within this period at the same location with available additional land. These seven households will be entitled for an assistance of three month average business income (3 x AZN 300) for the temporary disruption of their business. The details of rehabilitation allowances to DPs losing structures and businesses as per the entitlement matrix are summarized in Table 24.

Table 24: Rehabilitation Allowance for Business loss No. of Unit Cost Item APs Duration (AZN) Total (AZN) Rehabilitation allowance to DPs losing 7 3 months 300 6,300 business temporarily Total 6,300

8.3.3 Severe Impact Allowance to DPs losing more than 10% of productive land

86. As per the census there are 106 households losing more than 10% of their productive agricultural land. As per the Entitlement Matrix, the DPs experiencing severe impacts are eligible for one severe impact allowance equal to market value of 1 net harvest of the affected land for 1 year. This is based on the current price levels issued by the Department of Statistics and considers the amount and different type of crops cultivated in the affected land. A summary estimate of the total of the severe impact allowances due is shown in Table 25 and the unit rate of crops considered for calculation of this allowance is presented in the Table 26.

Table 25: Severe Impact Allowance9 No. of Unit Cost Item DPs Duration (AZN) Total (AZN) Severe impact allowance to DPs losing 106 1 season (shown 27,923 more than 10% of their productive below in agricultural land Table 28) Total 27,923

9 This severe impact allowance is calculated as per the recorded amount and type of crop cultivation during the census survey using the 2011 price. The valuation of this severe impact allowance will be calculated on a case to case basis by LAD during the land acquisition process.

38

Table 26: Unit price of Different Crops Estimated Annual Type of Crop Yield (Kg.) Unit Price per Kg. Total (AZN) Clover 27,765 0.12 3,091.8 Cucumber 21,345 0.40 8,538.0 Onion 15,462 0.50 7,731.0 Pea 1,276 2.40 3,062.4 Corn 6,427 0.30 1,928.1 Tomato 17,859 0.20 3,571.8

8.4 External Monitoring/Third Party Validation Cost

87. An external monitoring consultant (EMC) will be hired for the external monitoring/third- party validation and evaluation of the Project. The total cost of external monitoring/third party validation is estimated at $40,000. The cost estimates are presented in Table 27.

Table 27: Estimated budget for external resettlement monitoring Item Quantity Total Cost ($) Remuneration for EMC 2 months 20,000 Survey and Reporting Lump sum 12,000 Transport and Communication Lump sum 5,000 Miscellaneous Lump sum 3,000 Total 40,000

8.5 Summary Resettlement Plan Budget

88. The total cost of resettlement is estimated at $ 3.83 million as presented in Table 28.

Table 28: Summary Resettlement Budget Item Cost (AZN) Cost ($) Compensation for Land 1,419,865 1,774,831 Compensation for Structures 1,147,814 1,434,768 Relocation Subsidy 33,000 41,250 Compensation for Business Loss 6,300 7,875 Severe Impact Allowance 27,923 34,904 External Monitoring 32,000 40,000 Base Cost 2,666,902 3,333,628 Contingency (15% of base cost) 400,035 500,044 Total 3,066,938 3,833,672

39

CHAPTER 9: IMPLEMENTATION PLAN AND SCHEDULE

9.1 LARP Preparation and Implementation Process

89. The RP preparation and implementation process for this subproject is as follows:

a. Verification of LAR Impacts: Upon the approval of alignment by ARS and completion of detailed design, the LAD carried out field verification of the impacts with representatives from the rayon and municipality level and DPs and cross- checked LAR data with the cadastral map of the concerned villages. Most of the impacts identified at the PPTA were confirmed by the LAD except for a minor realignment in three sections that affected an additional 36 land plots. LAD conducted supplemental surveys to cover the additional DPs in these sections. b. Valuation of Assets: A commission was formed involving representatives from MoF, LAD, Municipality and Executive Power for valuation of the affected assets. The commission calculated and fixed the unit prices based on productivity of land and replacement value of land. A 20% of the compensation is also added on top of the land value as per Presidential Decree No. 506-IIIQD (December 2007). c. Official Individual Notification on Acquisition and Visits to DPs: Upon completion of the valuation, the LAD contacted the DPs through the representatives of respective municipalities and individually notified each DP about the purpose of acquisition, area of impact, compensation amount, etc. d. Verification of Ownership and legal Status: The LAD submited the validated list of APs to district office of the State Committee for Management of State Property (SCMSP) for verification of ownership and legal status of the assets proposed for acquisition. The SCMSP at the district independently verified the ownership records, whether the property is mortgaged or any loan taken from bank, whether any restriction imposed by any court on use of land, authenticity of current user and current land use of each affected assets. After verification to their satisfaction the State Property Committee issued Form-1 certifying no objection for any sale, transfer or acquisition of the said property. e. Signing of Agreement with DPs: On the basis of Form-1 certification obtained from the State Property Committee, the LAD submited its proposals to the Notary Public Office at Rayon level for the preparation of agreement. An agreement was signed between the APs and the authorized officer of ARS in front of Notary Officer. The signed agreements were attested by the Rotary Officer and one copy in original was be provided to the APs. In the event that the AP does not agree with the offered compensation amount, ARS will file expropriation at the court, deposit in the court the compensation amount, and request the court for the issuance of writ of possession. For DPs losing lands leased from the municipality or the state, comparable land to lease in the same location will be identified and agreed with the households and a new lease agreement will be signed with the leasing households. f. Preparation, Submission, Approval and Disclosure of Final RP: Based on the final alignment, results of the valuation activities, final DP list, and agreements signed with DPs, LAD (with support from the CSC) prepared this final LARP for submission to ARS and ADB for approval. Once the Final LARP is approved by ADB, the LARP will be uploaded to the ADB website for general public disclosure. The Azeri version of the LARP will be disclosed to the DPs in a pamphlet summarizing compensation eligibility and entitlement provisions, grievance mechanisms and

40

implementation schedule. The EMC will be mobilized to monitor the compensation payments and other related LARP activities. g. Payment of Compensation: After signing of the agreements and approval of the final LARP, the DPs will furnish the original copy of their agreement at the designated bank and receive the agreed compensation amounts in cheques or transferred to their personal accounts.

9.2 Implementation Schedule

90. The implementation schedule for the LARP is shown in Table 29.

Table 29: Implementation Schedule 2010 2011 Activity Name Q-1 Q-2 Q-3 Q-4 Q-1 Q-2 Q-3 Q-4

Verification of impacts by LAD

Valuation of assets

Updating of LARP by ARS

Review and approval of Final LARP by ADB

Notification and individual consultation with

DPs

Payment of Compensation

Submission of LARP completion report by

PIU/LAD and compliance report by EMC

Award of Civil Work Contracts

Start of Civil Work

41

CHAPTER 10: MONITORING AND EVALUATION

91. In accordance with ADB’s SPS (2009), all loan funded projects that result in land acquisition and resettlement need to be properly monitored and evaluated. To ensure that the Project is implemented in compliance with the provisions of the RP, both internal and external monitoring will be carried out during and after the implementation of the RP. Internal monitoring will be conducted by ARS, while external monitoring will be carried out by an external monitoring consultant (EMC).

10.1 Internal Monitoring

92. Internal monitoring will be carried out by LAD/PIU, with assistance from the Supervision Consultant, to assess the progress and results of LARP implementation and adjust the work program, if necessary. Indicators for internal monitoring will be those related to process and immediate outputs and results. Specific internal monitoring indicators are shown in Table 30.

Table 30: Internal Monitoring Indicators Monitoring Basis for Indicators Indicators  Have all land acquisition and resettlement staff been appointed and mobilized for the field and office work on time?  Have capability building and training activities been completed on schedule?  Have resettlement implementation activities been achieved according to the agreed plan? Budget and  Are funds for resettlement being allocated to the resettlement Timeframe agencies on time?  Have resettlement offices received the scheduled funds?  Have funds been disbursed to the affected families according to the LARP?  Has all land required been acquired in time for project implementation?  Have all DPs received complete entitlements according to numbers and categories of loss set out in the entitlements matrix?  Have all DPs received complete payments on time?  Have all DPs losing temporary land been compensated?  Have all DPs received the agreed transport costs, relocation costs, income substitution support and resettlement allowances, according to schedule? Delivery of  Have all replacement land plots or leases been provided? DP Entitlements  Is the DP occupying a new house?  Is restoration proceeding for social infrastructure and services?  Are DPs able to access schools, health services, cultural sites, and activities?  Are income and livelihood restoration activities being implemented as set out in the income restoration plan?  Have the affected businesses received entitlements including transfer and payments for net losses resulting from lost business and stoppage of production?

42

Monitoring Basis for Indicators Indicators  Have consultations taken place as scheduled?  Have resettlement booklets and announcement been Consultation, delivered? Grievance  How many DPs know their entitlements? How many know if and Special they have been received? Issues  Has any DP used the grievance redress procedures? What were the outcomes?  Have conflicts been resolved?

93. LAD/PIU will undertake internal monitoring through the following instruments: (i) review of census information for all DPs, (ii) consultation and informal interviews with APs, (iii) in-depth case studies, (iv) sample surveys of DPs, and (v) community public meetings. The results will be reported to ADB through monthly progress reports. ARS will also submit a resettlement completion report to ADB.

10.2 External Monitoring/Third Party Validation

94. External monitoring/third party validation will be carried out by an external monitoring consultant (EMC) to be hired by ARS and approved by ADB. The EMC will be selected from NGOs, academic institutions, consulting firms, or individual resettlement specialists. The EMC will commence his/her services before completion of LARP implementation. Results of the external monitoring will be communicated to the PIU and ADB through a due diligence report to be prepared once the LARP has been fully implemented.

95. The EMC will (i) review and verify internal monitoring reports prepared by LAD and PIU; (ii) review the socioeconomic baseline census information of pre-displaced persons; (iii) identify and select impact indicators; (iv) undertake impact assessment through surveys with displaced persons; (v) consult DPs, government officials, community leaders for preparing review report; and (vi) assess the resettlement efficiency, effectiveness, impact, and sustainability to draw lessons for preparation and implementation of future resettlement planning documents.

96. The external monitoring / third party validation will be based on (i) the procedures and guidelines of ADB as set out in SPS (2009), OMF1, and the Handbook on Resettlement (Manila, 1998); (ii) relevant laws, policies, and regulations in Azerbaijan; (iii) RF and RP of the subproject; and (iv) the general principle that DP’s livelihood should be better or at least remain at the present level after completion of the subproject.

97. External monitoring / third party validation will involve sample surveys, case studies, investigation of key problems, group interviews of important informants, follow-up visits, field observations, and analysis of correlative data collected by local governments and ARS.

98. The following indicators will be monitored and evaluated in accordance with the principles, entitlements, and rehabilitation strategies and plans stated in the LARP: Specific external monitoring indicators required for the subproject are in Table 31.

 Disbursement of entitlements to the DPs and enterprises/businesses: Compensation for housing, cultivated farmland, and employment as specified in the RP will be detailed.

43

 Development of economic productivity: Reallocation of cultivated land, land restoration, job opportunities available to the DPs, number of DPs employed or unemployed will be documented.  Provision of alternative housing: The DPs must move into their alternative housing at least one month before the relocation. For those opting for self-construction, payment of compensation and provision of housing sites should be completed at least three months before the relocation. The compensation for construction of houses should be equivalent to the replacement cost. The DPs must receive as scheduled their entitlements regarding moving allowance and transportation allowance.  Restoration of basic infrastructure and special facilities: All necessary infrastructure and special facilities should be restored at the resettlement sites at least up to a standard equal to the standard at the original location; the compensation for all infrastructure and special facilities should be sufficient to reconstruct it to the same quality.  Level of satisfaction of DPs: The level of satisfaction of the DPs with various aspects of the resettlement program and the operation of the mechanisms for grievance redress will be reviewed and the speed and results of grievance redressing measures will be monitored.  Standard of living: Throughout the implementation process, the trends in standards of living will be observed and the potential problems in the way of restoration of standards of living will be identified and reported. The monitor will carry out a comprehensive socioeconomic survey after the completion of resettlement implementation to document the standards of living and the conditions of the DPs after resettlement. The survey will be conducted annually for two years, or until most affected households have fully restored their living standards and income generation.  Reemployment of affected staff and workers, and compensation of lost wages.  Social adaptability and cohesion: Impacts on children, the elderly, and other vulnerable groups, public participation, DP’s attitudes and reactions to post resettlement situation, number of complaints and appeal procedures and resolution, implementation of preferential policies, income restoration measures, and improvements in women’s status will be described.  Care and attention to vulnerable groups, especially those that will face hardships due to resettlement: Closely monitor living conditions of elderly, the handicapped, the poor, and other vulnerable groups after resettlement to ensure that no hardship is experienced.  Information on utilization and adequacy of resettlement funds.

Table 31: External Monitoring Indicators Monitoring Basis for Indicators Indicator  Location  Composition and structure: ages, educational and skill levels Basic  Gender of household head Information on Ethnic group AP Households   Access to health, education, utilities, and other social services  Housing type  Land and other resource ownership and utilization patterns

44

Monitoring Basis for Indicators Indicator  Occupations and employment patterns  Income sources and levels  Agricultural production data (for rural households)  Participation in neighbourhood or community groups  Access to cultural sites and events  Value of all asset forming entitlements and resettlement entitlements  What changes have occurred in terms of patterns of occupation, production, and resource use compared to the pre-project situation?  What changes have occurred in income and expenditure patterns compared to the pre-project situation? Benefit  What have been the changes in cost of living compared to the pre- Monitoring project situation?  Have DPs’ incomes kept pace with these changes?  What changes have taken place in key social and cultural parameters relating to living standards?  Were house compensations made free of depreciation, fees or transfer Restoration of costs to the DPs? Living  Have perceptions of community been changed? Standards  Have the DP achieved replacement of key social and cultural elements?  Were compensation payments free of deduction for depreciation, fees or transfer costs to the DP?  Were compensation payments sufficient to replace lost assets?  Was sufficient replacement land available of suitable standard? Restoration of  Did transfer and relocation payments cover these costs? Livelihood  Did income substitution allow for re-establishment of enterprises and production?  Have enterprises affected received sufficient assistance to re-establish themselves?  Do jobs provided restore pre-project income levels and living standards?  How much does the DP know about resettlement, procedures and entitlements?  Do they know if these have been met?  How do the DP assess the extent to which their own living standards Levels of DP and livelihoods Satisfaction  Have been restored?  How much does the DP know about grievance and conflict resolution procedures?  How did resettlement implementers deal with unforeseen problems?  Were the DPs and their assets correctly enumerated? Effectiveness of  Were land speculators assisted? Resettlement  Was the time frame and budget sufficient to meet objectives? Planning  Were entitlements too appropriate (wide or narrow)?  Were vulnerable groups identified and assisted?  Were there unintended environmental impacts? Other Impacts  Were there unintended impacts on employment or incomes?

APPENDIX 1

PAMPLET FOR LOCAL DISCLOSURE

Pamphlet on Resettlement Masalli–Astara Motorway – Section B

For the implementation of Girdani – Kolatan Section (subproject) of the Masalli-Astara motorway a detailed land acquisition and resettlement plan (LARP) has been prepared in accordance with the Laws of the Azerbaijan Republic on Land Acquisition and Resettlement (LAR), ADB’s Safeguard Policy Statement (2009) and the Land Acquisition and Resettlement Framework (LARF) prepared under the project and agreed between the ADB and the Azerbaijan Government.

Legal framework of the project

All Displaced Persons (DPs) under the project will be entitled for compensation or at least rehabilitation provisions under the subproject as per their loss and eligibility. The (i) DPs losing land and other assets with legal title/traditional land rights (ii) tenants and sharecroppers; (iii) owners of buildings, crops, plants, or other objects attached to the land; and (iv) DPs losing business, income, and salaries will compensated and assisted under the project as per the policy framework.

LAR tasks under Project will be implemented according to a compensation eligibility and entitlements framework in line with both Azeri laws and regulation and ADB’s Policy. The entitlement matrix applicable for the project is given below.

Compensation Entitlement Matrix Displaced Asseta Specification Person Compensation Entitlements Permanent All land losses Farmer/  Land for land compensation with plots of equal value and impact on independently Titleholder productivity to the plots lost; or arable land from impact  Cash compensation for affected land at replacement cost severity based on market value free of taxes, registration, and transfer cost plus 20% premium as per PD 506-IIIQD Dec 2007.  Residual portions of plots affected by the required ROW that are reduced to less than 400 m2 or rendered unusable by alterations in access, irrigation, or workability will be included in the affected land and compensated as above indicated. Leaseholder  Renewal of lease in other plots of equal value/productivity of plots lost, or  cash corresponding to the annual yield of land lost for the remaining years of the lease up to a maximum of 10 years. Sharecroppers  Cash compensation equal to the market value of the lost harvest share once (temporary impact) or twice (permanent impact). Agricultural  Cash indemnity corresponding to their salary (including workers losing portions in kind) for the remaining part of the agricultural their contract year. Squatters  Actual crop loss compensation and resettlement assistance will be provided (see below).

Displaced Asseta Specification Person Compensation Entitlements Additional Farmer/  1 severe impact allowance equal to market value of 1 net provisions for Titleholder harvest of the affected land for 1 year (inclusive of winter severe impacts Leaseholder and summer crop and additional to standard crop (more than 10% compensation). Sharecroppers  1 severe impact allowance equal to market value of share of land loss) of harvest (additional to standard crop compensation). Squatters  1 severe impact allowance equal to market value of net harvest of the affected land for 1 year (additional to standard crop compensation). Residential/ Titleholder  Land for land compensation through provision of a plot commercial comparable in value/location to plot, or land  Cash compensation for affected land at full replacement cost free of taxes, registration, and transfer costs. Renter/  1-3 months allowance. leaseholder Squatters  Provision of a free or leased plot in a government resettlement area or a self-relocation allowance. Houses and All relevant  Cash compensation at replacement rates for affected structures displaced structure and other fixed assets free of salvageable persons materials, depreciation and transaction costs. In case of partial impacts full cash assistance to restore remaining structure. Crops Crops affected All displaced  Crop compensation in cash at full market rate for harvest persons losses. (including squatters Trees Trees affected All displaced  Cash compensation shall reflect income replacement. persons (including squatters) Business Temporary or All displaced  Business owner: (i) cash compensation equal to one year employment permanent loss persons income, if loss is permanent; (ii) cash compensation for the of business or (including period of business interruption, if loss is temporary. employment squatters)  Worker/employees: Indemnity for lost wages for the period of business interruption up to a maximum of 3 months. Relocation Transport and All displaced  Provision of sufficient allowance to cover transport transitional persons expenses and livelihood expenses for one month. livelihood costs Community  Rehabilitation/substitution of the affected structures/utilities assets (i.e., mosques, footbridges, roads, schools, health centers). Vulnerable displaced  Employment priority in project-related jobs during the people persons below construction of the motorway, and after the project livelihood poverty line completion (e.g., road maintenance and roadside businesses).

Institutional Arrangement

Ministry of Transport is the Executing agency for the project and it will be implemented by the AzerRoadService (ARS) OJC which is responsible for the preparation, implementation and funding of the LAR tasks, as well as arrangement of the coordination between organizations through its Land Acquisition Department (LAD). The LAD is responsible for implementing the LARP and all land acquisition and resettlement activities, as well as internal monitoring, through their headquarters in Baku and local offices in each rayon working in consultation with representatives of the executive power of each rayon.

Grievance Redressal Mechanism

A grievance mechanism will be available to allow a DP appealing any disagreeable decision, practice or activity arising from land or other assets compensation. DPs will be fully informed of their rights and of the procedures for addressing complaints whether verbally or in writing during consultation, survey, and time of compensation. Care will always be taken to prevent grievances rather than going through a redress process. This can be obtained through careful LAR design and implementation, by ensuring full participation and consultation with the DPs, and by establishing extensive communication and coordination between the affected communities, the ARS LAD and local governments. Complaint and grievances will be addressed through the process described in the table below.

Grievance Resolution Process Land and Crops Compensation Issues Step 1 Complaints resolution is first attempted at the village levels with the involvement of the PIU and village authorities, NGO, and informal mediators. Step 2 If still unsettled, a grievance can then be lodged to the Rayon LAR Commission.10 Within 15 days the Rayon LAR Commission will dismiss the case or recommend its settlement to the LAD. Step 3 After the Rayon LAR Commission, intervention no solution has been reached a grievance can be directly lodged to the LAD11 (the LAD’s address is provided in the footnote). The DP must lodge the complaint within 1 month after receiving response on the original complaint from the Rayon LAR Commission and must produce documents supporting his/her claim. ARS will provide a response within 15 days of registering the complaint. The LAD decision should be in compliance with the provisions of this RP. Step 4 Should the grievance redress system fail to satisfy the DP, he/she can pursue further action by submitting his/her case to the appropriate court of law.

The LAD field team will assist in handling complaints. Since the ARS headquarters is situated in the capital of city of Azerbaijan, the DPs can contact the ARS through the field representative of LAD at the rayon level. The Rayon LAR commission will meet at least once a month to discuss complaints or queries from DPs and the general public. The field representative of LAD/PIU will be responsible for recording and following up on complaints received about the subproject.

10 People’s representatives, including DPs, are involved in the rayon commission. 11 The Land Acquisition Division is located in the AzerRoadService Open Joint-Stock Company, 72/4, Uzeyir Hajibeyov Street, AZ1010, Baku (telephone number: +994 12 493 0045).

APPENDIX 2

SUMMARY CONSULTATION MATRIX

Masalli–Astara Motorway Resettlement Plan for Section B: Girdani to Kolatan

Summary Consultation Matrix

Key Matters Raised and Agreements Date Location Participants Made 3 August Hirkan Village Residents of Hirkan and Dasdaliqcar villages Local residents informed about the 2007 proposed Masalli – Astara motorway project Lenkaran Municipality: and the need for acquisition of 60 metre Rayon A. Mammadov, Head of Hirkan Village Municipality wide strip to accommodate the new motorway. Land acquisition will be carried PPTA Consultant: out following the ADB Involuntary D. Malick, Team Leader Resettlement Policy. The Azerbaijan R. Khojayev, Resettlement Specialist Government will pay compensation to all P. Mammadova, Women and Development NGO local residents whose land is required for and 4 other representatives the project at rates to be agreed by the M. Kerimly, Translator Government which will be in line with market rates. Compensation payments will be made before construction work starts. There will be procedures in place for any disagreements over resettlement and compensation rates to be initially referred to the Ministry of Transport, and they to the local courts. 3 August Mamusta Residents of Mamusta Village Local residents informed about the 2007 Village 43 people proposed Masalli – Astara motorway project and the need for acquisition of 60 metre Lenkaran Municipality: wide strip to accommodate the new Rayon H. Shahverdiyev, Head of Mamusta Village motorway. Land acquisition will be carried Municipality out following the ADB Involuntary Resettlement Policy. The Azerbaijan PPTA Consultant: Government will pay compensation to all D. Malick, Team Leader local residents whose land is required for R. Khojayev, Resettlement Specialist the project at rates to be agreed by the P. Mammadova, Women and Development NGO Government which will be in line with market and 4 other representatives rates. Compensation payments will be made M. Kerimly, Translator before construction work starts. There will be procedures in place for any disagreements over resettlement and compensation rates to be initially referred to the Ministry of Transport, and they to the local courts. 4 August Sapnakaran PPTA Consultant: Local residents informed about the 2007 Village D. Malick, Team Leader proposed Masalli – Astara motorway project R. Khojayev, Resettlement Specialist and the need for acquisition of 60 metre Lenkaran P. Mammadova, Women and Development NGO wide strip to accommodate the new Rayon and 4 other representatives motorway. Land acquisition will be carried M. Kerimly, Translator out following the ADB Involuntary Resettlement Policy. The Azerbaijan Municipality: Government will pay compensation to all M. Zahidov, Chairman of Sapnakaran Village local residents whose land is required for Municipality the project at rates to be agreed by the Government which will be in line with market

Key Matters Raised and Agreements Date Location Participants Made Residents of Sapnakaran, Yuxari, Kosalar and rates. Compensation payments will be made Moqonojova Villages: before construction work starts. There will 169 people be procedures in place for any disagreements over resettlement and compensation rates to be initially referred to the Ministry of Transport, and they to the local courts. 4 August Luvasar Residents of Luvasar, Sahlakuca, Haftoni and Talish Local residents informed about the 2007 Village Villages: proposed Masalli – Astara motorway project 197 people and the need for acquisition of 60 metre Lenkaran wide strip to accommodate the new Rayon Municipality: motorway. Land acquisition will be carried M. Nasirov, Deputy Chairman of Luvasar Village out following the ADB Involuntary Municipality Resettlement Policy. The Azerbaijan Government will pay compensation to all PPTA Consultant: local residents whose land is required for D. Malick, Team Leader the project at rates to be agreed by the R. Khojayev, Resettlement Specialist Government which will be in line with market P. Mammadova, Women and Development NGO rates. Compensation payments will be made and 4 other representatives before construction work starts. There will M. Kerimly, Translator be procedures in place for any disagreements over resettlement and compensation rates to be initially referred to the Ministry of Transport, and they to the local courts. 28 July Villages: Affected Persons: Key Matters raised: 2010 Haftoni  The DPs were informed about the Yuukhari Novruzov Agabala Mirzabala additional land requirement following Sapnakaran Shahid Soltanaliyev detailed design Aliyev Rafael Tabriz  The DPs were informed about the Mustafayev Nuraddin Pasha process of land acquisition and payment Rayon: Sadikhov Fitad Asker of compensation including various Lankaran Huseynov Ashur Hokmulla assistance as per eligibility Bagirov Fikrat Barat  A detailed census survey was carried out Bagirov Abdulhuseyn Gulamhuseyn by the social team Agreements Made:  The Resettlement plan (impact and Detailed Design Consultant: compensation measures) was updated Ilaha Ilyasova (Social Impact Expert) based on the census survey of these Arastun Zuliyev (Land Acquisition Expert) additional plots 29 July Villages: Displaced Persons: Key Matters raised: 2010 Kokolos  The DPs were informed about the Balaja Rzayev Rizvan Davud additional land requirement following Shahaga Eynullayev Shahlar Allahveren detailed design Mamusta Ahmadova Elnara Barat  The DPs were informed about the Dadashov Ruslan Gulamhuseyn process of land acquisition and payment Rahmanov Jamal Nariman of compensation including various Rayon: Asadov Arif Farman assistance as per eligibility Lankaran Mammadov Bayramali Orucali  A detailed census survey was carried out Huseynova Ruhangiz Isabulla by the social team Ganjiyeva Gulbahar Mahammad Agreements Made: Ganjiyev Mammadali Mahhamad The LARP (impact and compensation Ganjiyev Maharram Ariz measures) was updated based on the Allahverdiyev Muslim Gudrat census survey of these additional plots Gasimov Malik Mahmud Mammadova Fatma Talib Humbatov Fakhraddin Humbat

Key Matters Raised and Agreements Date Location Participants Made Detailed Design Consultant: Ilaha Ilyasova (Social Impact Expert) Arastun Zuliyev (Land Acquisition Expert) From: Villages: All DPs in these 20 villages of Lankaran Rayon Key Matters raised: 18  DPs were informed by ARS about the December Lej AzerRoadService process of land acquisition 2009 Haftoni Mammadov Zakir, Engineer  DPs were asked to produce their To Talishli documents of land for verification 1 March Grunba Representative of the Executive Power  Present land use of the affected land was 2010 Saglakucha Pensar – Shukur Mustafayev recorded Luvesar Kosalar Lej Haftoni Municipality Agreements Made: Yukxari Rovshan Zeynalov, Chief of the Municipality  On the basis of the verification of records Nuvedi ownership database was updated Sapnakeran Talishli Qrunba Municipality  Database on land use of the affected Suruk Kamal Huseynov – Chief of the Municipality land was updated Mogonojoba  Further documentation for agreement Turkekaran Saglakucha Municipality was prepared Sixakeran Tavakkul Mammadov, Chief of the Municipality Mamusta Hirkan Luvasar Municipality Dasdaliqjar Reshad Bayramov, Chief of the Municipality Pensar Kokolos Yukhari Nuvadi Sapnakeran Municipality Bala Mammadzadeh Raifa, Chief of the Municipality – Sahagaj Kolatan Suruk Mogonojoba Turkekaran Municipality Valeh Huseynov, Chief of the Municipality Rayon: Mamusta Dashdaliqjar Municipality Lenkaran Huseynali Shakhverdiyev, Chief of the Municipality –

Hirkan Municipality Alemshakh Mammadov, Chief of the Municipality

Kokolos Bala Shagagaj Kolatan Municipality Bahram Aliyev, Chief of the Municipality From Villages: All DPs in these 20 villages of Lankaran Rayon Key Matters raised: 1 March  DPs were informed by ARS about the 2010 Lej AzerRoadService agreement for land acquisition and To Haftoni Mammadov Zakir, Engineer payment of compensation through 30 Talishli individual notice December Gurunba Representative of the Executive Power  DPs were informed about the amount 2010 Saglakuca Pensar - Shukur Mustafayev and process of payment of compensation Lunvesar Kosalar Lej Haftoni Municipality Agreements Made: Yuxari Rovshan Zeynalov, Chief of the Municipality  Agreement signed between ARS and Nuvedi DPs Sapnakeran Talishli Qrunba Municipality Payment made to DPs Suruk Kamal Huseynov – Chief of the Municipality Mogonojoba Turkekaran Saglakucha Municipality Sixakeran Tavakkul Mammadov, Chief of the Municipality Mamusta Hirkan

Key Matters Raised and Agreements Date Location Participants Made Dasdaliqcar Luvasar Municipality Pensar Reshad Bayramov, Chief of the Municipality Kokolos Bala Yukhari Nuvadi Sapnakeran Municipality Sahagac Mammadzadeh Raifa, Chief of the Municipality – Kolatan Suruk Mogonojoba Turkekaran Municipality Rayon: Valeh Huseynov, Chief of the Municipality

Lenkaran Mamusta Dashdaliqjar Municipality Huseynali Shakhverdiyev, Chief of the Municipality –

Hirkan Municipality Alemshakh Mammadov, Chief of the Municipality

Kokolos Bala Shagagaj Kolatan Municipality Bahram Aliyev, Chief of the Municipality

Fw: Endorsement of LARPs for Sections B and C Balabhaskara Reddy Bathula to: Nancy C. Bustamante 02-Dec-2011 09:17 AM (℡5646)

Nancy,

here is the endorsement. pl prepare for disclosing all three docs.

thanks Reddy

Balabhaskara Reddy Bathula Senior Transport Specialist Central and West Asia Department Asian Development Bank Tel (632) 632-5646 Fax (632) 636-2428 [email protected], Mob:+639276602933

----- Forwarded by Balabhaskara Reddy Bathula/CWRD/ADB on 12/02/2011 09:16 AM -----

From: To: Cc: , , "Ilaha Ilyasova" Date: 12/01/2011 09:03 PM Subject: Endorsement of LARPs for Sections B and C

Dear Mr. Hong Wang, We hereby endorse the approved LARPs for the Sections B and C and would like to explore further options during the LARPs implementation period, in particular non-cash compensation to severe effected people. Hopefully we will reach a consensus at the end.

Best regards,

Adil Gojayev

PIU Director;

Cc: Gabil Mammadov LAD Director

U. Hajibeyov 72/4 Baku, Azerbaijan Tel: 4930045 Fax: 4934665