Kashkadarya Regional Road Project

Home , Kamashi, Kamashi District, Termez, Yakkabog District

Social Due Diligence Report

June 2019

UZB: Kashkadarya Regional Road Project

This social due diligence report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

SOCIAL DUE DILIGENCE REPORT

Loan Number: 3481 Prepared: June 2019 Document Stage: Final

UZBEKISTAN: Kashkadarya Regional Road Project (Reconstruction of M-39, 4P-79, and 4K319 Road)

ABREVIATIONS

ADB Asian Development Bank AH affected household AP affected person CC civil code CR Committee for Roads EA executing agency FGD focus group discussion GRM grievance redress mechanism LAR land acquisition and resettlement LC land code PIU project implementation unit PPTA project preparatory technical assistance ROW right-of-way TC tax code

GLOSSARY Affected Persons Affected persons (APs) are the members of the affected households those who experience full or partial, permanent or temporary physical displacement (relocation, loss of residential land, and/or loss of shelter) and economic displacement (loss of land, assets, access to assets, income sources, or means of livelihoods) resulting from (i) involuntary acquisition of land, or (ii) involuntary restrictions on land use or on access to legally designated parks and protected areas. Although this definition of affected person is at variance with the usage in the SPS-2009, this is how it is understood and officially used in Uzbekistan, and it is not different from ‘displaced person’ defined in the SPS-2009. Affected A household consists of one or more people who live in the same dwelling Household and also share at meals or living accommodation and may consist of a single family. In the project, household is the unit for compensation and all the members in a household are considered as affected persons. Compensation Payment for an asset to be acquired or affected by a project at replacement cost. Cut-off-date The date after which people will not be considered eligible for compensation i.e., they are not included in the list of Affected Households (AH) as defined by the census. If the country expropriation law does not specify a cut-off date, normally, the cut-off date is the date of the detailed measurement survey which will be based on the detailed and final engineering design. Economic Loss of land, assets, access to assets, income sources, or means of Displacement livelihoods as a result of (i) involuntary acquisition of land, and/or (ii) involuntary restrictions on land use or on access to legally designated parks and protected areas. Entitlement The range of measures comprising cost of compensation, relocation cost, income rehabilitation assistance, transfer assistance, income substitution, and relocation which are due to or business restoration which are due to AH, depending on the type and degree nature of their losses, to restore them social and economic base. All entitlements will be given to all affected households as per the entitlement matrix. Inventory of Loss The inventory of assets getting affected by project. Illegal/Non HHs that are not registered their business, agriculture, residential and recognizable orchard and those who have no recognizable rights or claims to the land that they are occupying and includes people using private or state land without permission, permit or grant i.e. those people without legal lease to land and/or structures occupied or used by them. ADB’s SPS explicitly states that such people are entitled to compensation for their non-land assets. Hokimiyat Local government authority that interfaces between local communities and the government at the regional and national level. It has ultimate administrative and legal authority over local populations residing within its jurisdiction. Land The process whereby a person is compelled by a public agency to alienate acquisition all or part of the land s/he owns or possesses, to the ownership and possession of that agency, for public purposes, in return for fair compensation. Land Use rights According to Land Code (article 17) real persons (can have the land plot under the right of lifelong inheritable possession and land parcel use transferred as descent. This right is given to individual residential housing construction and collective gardening and vineyard (orchards), peasant

farms. Juridical persons (enterprises, stores, and business) can possess land parcels according to the right to permanent possession, permanent use, temporary use, lease and property. In two above cases when person wants to sell the Property (land and building), he will sell the building & structure and subsequently land parcel will be sold as an attachment (right is being sold). Leaseholder Juridical person (farm) running agricultural production with the use of land parcels granted to him on a long-term lease. Lease term is limited up to fifty years but not less than for ten years. Leaseholder cannot sell - buy, mortgage, present, exchange the land. Low Income Low-income households are classified as households where the monthly per capita income is less than US$ 2 per capita per day). Makhalla Is a local level community-based organization recognized official by the Government of Uzbekistan that serves as the interface between state and community and is responsible for facilitating a range of social support facilities and ensuring the internal social and cultural cohesiveness of its members. Mahalla leaders are elected by their local communities. Meaningful A process that (i) begins early in the project preparation stage and is carried Consultation out on an ongoing basis throughout the project cycle; (ii) provides timely disclosure of relevant and adequate information that is understandable and readily accessible to affected people; (iii) is undertaken in an atmosphere free of intimidation or coercion; (iv) is gender inclusive and responsive, and tailored to the needs of disadvantaged and vulnerable groups; and (v) enables the incorporation of all relevant views of affected people and other stakeholders into decision making, such as project design, mitigation measures, the sharing of development benefits and opportunities, and implementation issues. Replacement Replacement cost is the principle to be complied with in compensating for cost lost assets. Calculation of which should include: (i) fair market value; (ii) transaction costs; (iii) interest accrued; (iv) transitional and restoration costs; and (v) other applicable payments, if any. Where market conditions are absent or in a formative stage, APs and host populations will be consulted to obtain adequate information about recent land transactions, land value by types, land titles, land use, cropping patterns and crop production, availability of land in the project area and region, and other related information. Baseline data on housing, house types, and construction materials will also be collected. Qualified and experienced experts will undertake the valuation of acquired assets. In applying this method of valuation, depreciation of structures and assets should not be taken into account. Severely affected Severely affected households are those who lose more than 10% of their Households productive asset (income generating productive land) and or physically displaced. Significant impact 200 people or more will experience major impacts, which are defined as; (i) being physically displaced from housing, and/or (ii) losing 10% or more of their productive assets (income generating). Vulnerable Low-income households, female-headed households, the elderly headed Households household, households having physically challenged persons.

TABLE OF CONTENTS

ABREVIATIONS ...... 1 GLOSSARY ...... 1 I. INTRODUCTION ...... 1 A. Overview and Background of the Project ...... 1 B. Scope of the Project ...... 2 II. METHODOLOGY OF THE SOCIAL DUE DILIGENCE EXERCISE...... 3 III. OBJECTIVE AND SCOPE OF THE DUE DILIGENCE REPORT ...... 3 IV. FINDINGS OF THE SOCIAL DUE DILIGENCE EXERCISE ...... 4 V. SCOPE OF LAND ACQUISITION AND RESETTLEMENT IMPACTS ...... 4 A. Project area district Kamashi: 4P79 Karshi-Shakhrisabz 28-60 km ...... 5 B. Project area district Yakkabag: 4P79 Karshi-Shakhrisabz 60-64 km and 4K319 Tanhoz-Kazak 18-30 km ...... 7 C. Project Area District Shakhrisabz: M39 Almati-Termez 1164-1173 km ...... 9 D. Project Area District Kitab: M39 Almati-Termez 1144-1164 km ...... 11 VI. LAR-RELATED LEGAL FRAMEWORK IN UZBEKISTAN ...... 11 A. Constitution ...... 11 B. Land Code (30 of April 1998) ...... 12 C. Resolution of Cabinet of Ministers No. 97 (29 May 2006) ...... 13 D. Civil Code (29 August 1996) ...... 15 E. Resolution of Cabinet of Ministers No. 146 (25 May 2011) ...... 15 F. Tax Code (TC) ...... 16 G. Labor Code and Employment Law ...... 17 H. Resolution of Cabinet of Ministers No. 44 (15 February 2013) ...... 17 I. Resolution of Cabinet Ministers No. 3857 (16 July 2018)...... 18 J. Decree of the President of the Republic of Uzbekistan No. 5495 (1 August 2018) ...... 18 VII. MITIGATION MEASURES PROPOSED FOR LAR IMPACTS ...... 18 A. Compensation for Structures ...... 18 B. Compensation for Crops and Trees ...... 19 C. Loss of Business ...... 20 D. Shifting and Relocation Allowances ...... 20 E. Review of Compensation and Replacement Cost ...... 20 F. Land Acquisition for Public Purposes ...... 21 G. Resettlement assistance ...... 21 H. Other Good Practices ...... 21 VIII. CONSULTATION, DISCLOSURE AND GRM ...... 22 A. Consultation and Disclosure ...... 22 B. Grievance Redress Mechanism ...... 23 IX. SUGGESTED CORRECTIVE MEASURES AND CONCLUSION ...... 23 X. MONITORING AND REPORTING ...... 24 Appendix 1: List of Affected Households with Residential Impact...... 25 Appendix 2: List of affected households with non-residential impact ...... 26 Appendix 3 and 4: Letters to ADB from CR about the clarification of RoW and AHs in Yakkabag ...... 27

I. INTRODUCTION

A. Overview and Background of the Project

1. The project was initiated by the Resolution of the President of the Republic of Uzbekistan No 2313 on the Program of Development and Modernization of the Engineering‐ Communication and Road and Transport Infrastructure for the period 2015‐2019, dated 6 March 2015. The above resolution identified the Kashkadarya Regional Road Project as a priority for development. The project involves upgrade and construction of two sections of the regional road section connecting Karshi and Kitab with a total length of 77 kilometers. The road section will provide a shorter high capacity link between these two centers to A380 and M39 along 4R79, 4K319, 4R84 and M39 roads.

2. The length of the existing regional road between Karshi to Kitab through the regions of Guzar, Kamashi, Yakkabag, and Shakhrisabz is 127 kilometers of which 2 sections with a total length of 77 kms will be the total project length as follow: (a) Section 1 from chainage 28+000 km to 76+000 km with a length of 48 kms passing through Road 4R79 traversing Karshi city – Khanabad village – Chirokchi – Shakhrisabz city”, and through Road K319 “railway station Tanhoz – Yakkabag city – Esat village – Kazak village”, km 18 – km 30 with a length of 12 km) (b) Section 2, design chainage km 98+000 km to 127+000 with a length of 29 kms through Road M39 traversing Almaty – Bishkek – Tashkent – Shakhrisabz - Termez” please see figure 1.1 and table 1.1

Figure 1: Map of the Project Road

B. Scope of the Project

3. The project will reconstruct the existing highway, which is a major two-lane highway with partly four-lane highway.1 The project is located about 300 km south of Tashkent with flat/rolling terrain in most sections. The existing highway was built between 1970s–1980s and the existing pavement has deteriorated already. The project will include widening the existing two-lane highway into four lanes and reconstructing the existing four-lane highway sections with new cement concrete pavement and base course, constructing drainage, widening and repairing of existing bridges, and installing proper road safety facilities. The project will follow the existing alignment in most sections with minimum realignment in a few sections to improve the geometric alignment.

4. It is noted that the ADB section of the road comprising a total length of 77 km is not a contiguous length 77 km. Instead, it comprises two road sections in four districts from the entire corridor of 127 km. Table 1.1 shows the ADB sections of the road comprising 77 km. Section 1 comprises (i) Road 4R79 “Karshi city-Shakhrisabz city,” km 28– km 64 (36 km), and (ii) Road 4K319 “Railway station Tanhoz–Yakkabag city–Esat village–Kazak village,” km 18–km 30 (12 km), total 48 km, and Section 2 comprises Road M39 “Almaty– Bishkek–Tashkent–Shakhrisabz–Termez” km 1144–km 1173, 29 km.

Table 1: Length of the Road by District Level

No Section Name of the road Km Km distance District 1 I section 4P79 Karshi-Shakhrisabz 32 28-60 km Kamashi 4 60-64 km Yakkabag 2 4K319 Tanhoz-Kazak 12 18-30 km Yakkabag 3 II section M39 Almati-Termez 9 1164-1173 km Shakrisabz 20 1144-1164 km Kitab Total: 77km

5. The project will increase domestic and international trade along Central Asia Regional Economic Corridors and contribute to economic growth along the project roads. The project will benefit local communities along the road through greater access to markets and social service facilities2 and enhance their community networking, as well as the transport of goods across the region. The project is expected to initiate economic ripple effect, where local economy is developed through increased trade and employment generation.

6. Project Implementation Unit (PIU) was responsible for overall coordination of land acquisition and resettlement (LAR) activities. The PIU has assigned a staff to ensure that all activities related to land acquisition and involuntary resettlement implemented in accordance with Uzbekistan's legislation and policies and ADB's SPS.

1 Existing four-lane sections were from km 0 to km 8 on 4 R79 and from km 1184 to km 1144 on M39. 2 Mainly to health care facilities located in province or district centers and to educational facilities such as universities, colleges and schools.

II. METHODOLOGY OF THE SOCIAL DUE DILIGENCE EXERCISE

7. The methodology followed for the due diligence exercise included field visits, document review, social survey of the project affected households, and extensive consultations with the relevant district officials as well as focus group discussions with the affected persons.

8. Field Visits. A team of representative from executing agency (EA) and relevant government offices responsible for LAR together with national safeguards consultants visited all 3 districts to check the project affected districts to verify data provided and to support document review.

9. Document review. Apart from the review of the relevant national and local laws, regulations, government resolutions and procedures pertaining to land acquisition and land transactions undertaken by the EA with regard to the affected households, the all related data provided by the respective district khokimiyats related to payment of compensation to the affected households was reviewed to assess the adequacy of the compensation payment.

10. Consultations. Three focus group discussions (FGDs) were undertaken in the affected areas with the affected communities with the objective of understanding the land acquisition undertaken and compensation provided and overall adequacy of the resettlement measures as well as the nature of grievances of the affected households and communities, if any. Residential households and non-residential households constituted the ‘focus’ for the consultations. In addition, extensive meetings with other key stakeholders including community leaders and khokimiyat representatives at the district level were carried out.

III. OBJECTIVE AND SCOPE OF THE DUE DILIGENCE REPORT

11. Apart from the project benefits, the project construction necessitated land acquisition, leading to impacts on the residential and commercial structures and the land underneath these structures in the habitations along the road. No agricultural land has been affected. During the field visits in November-December 2018, the EA –informed the ADB team that land acquisition for the entire road length of 127 km was already accomplished before the government requested ADB for financial support of the 77 km road sections. Hence, ADB engaged the project preparatory technical assistance (PPTA) consultants to carry out a due diligence study and instead of preparing a DDR for the 77 km ADB sections to determine (i) if land acquisition was initiated in anticipation of ADB support, and (ii) if due process was followed for land acquisition.

12. This due diligence report for land acquisition and resettlement relates to the sections connecting Karshi and Kitab (77 km) of the Kashkadarya Regional Road Project. The remaining 50 km road section, being financed by the government, constitutes an associated facility.

13. The objectives of the due diligence exercise are to: (i) Determine if land acquisition was initiated in anticipation of ADB support for the project; and (ii) Assess if due process had been adopted in land acquisition and resettlement process including consultation, information disclosure, compensation payment and grievance redress mechanism.

IV. FINDINGS OF THE SOCIAL DUE DILIGENCE EXERCISE

14. Land acquisition was not initiated with anticipation of ADB support. Discussion with the EA and documentary evidence established that land acquisition for the project was initiated some time in 2014 by invoking the requirements of the country’s Land Code and by using the instrument of Resolution No. 97. The government decree for the land acquisition was issued on 21 November 2012 [President's Decree No. 1855]. This activity was linked with the renovation of Shahrisabz city. There was a special Resolution of the Cabinet of Ministers No. 31, dated 20 February 2014, “On the program of comprehensive measures on building and reconstruction of Shahrisabz city, Kashkdarya region.” This resolution contains detailed program with activities for 5 years (2014-2018) and the development of “Karshi-Shahrisabz-Kitab” road was also included as part of this program. As such, land acquisition is being carried out in phases and is continuing. The EA initiated discussions with ADB for project support sometime after mid-2015. Land acquisition for the project was already requisitioned per the government decree mentioned above and the process of assets acquisition was on, to be completed as the disputes regarding compensation amounts are resolved. The compensation valuation of the affected house and other structures was done between May and October 2015 in Shahrisabz district, in November 2015 in Kamashi district, and between October 2015 and January 2016 in Yakkabog district. The EA confirmed that resettlement was done section by section according to their work plan. So, the khokimyats were not required to resettle all households at one go and make them homeless. On the basis of the available documentary evidence, this due diligence exercise confirms that land acquisition initiated by the EA was not in anticipation of the ADB project.

V. SCOPE OF LAND ACQUISITION AND RESETTLEMENT IMPACTS

15. According to detail design information and documents received from Committee for Roads (CR), a total 47 households, namely 30 residential and 17 non-residential households were affected by the road construction initiative. SDDR prepared in 2016 identified a total 160 Ahs (132 residential and 28 nonresidential) however these numbers were still tentative in relation to Yakkabog district, as the authorities were working to separate the ADB sections from the government sections and determining or finalizing the correct numbers. Updated information confirming final number of 47 AHs listed in Appendix 2 and 3. There are no farmers and agricultural land affected by the road construction.

16. CR as the EA has overall responsibility for land acquisition and compensation payment in coordination with the respective district khokimiyats in Kashkadarya province. Land acquisition carried out by the EA for the ADB project road sections was initiated according to the country land law, the Land Code. Land is a state property in Uzbekistan and owned by either the respective city or the district khokimiyat. As per the Land Code, the district khokimiyat grants the right to land to individual households. There is no cash compensation for land but land for land compensation is the practice. Cash compensation is provided for developments made on land, such as, building structures and crops, but the compensation for trees is included in the compensation assessment for house structures.

17. According to information available for land acquisition from the respective district khokimiyats, two types of land – residential and nonresidential (includes orchards) are affected. No temporary impacts on land were identified or reported during the due diligence. One of the four affected districts Kitab is not affected by land acquisition. District-wise details of the types of affected assets are in Table 2 below.

Table 2: District-wise Types of Affected Households

Districts Types of Impact otal No. of Residential Non-Residential Affected Percentage Households Kamashi 9 8 17 36% Yakkabag 3 6 9 19% Shakhrisabz 18 3 21 45% Kitab 0 0 0 0 Total: 30 17 47 100%

18. Compensation payment. Interviews with the identified project affected households and information provided by the respective district khokimiyats (appendixes 1 and 2) shows that out of the 47 affected households 30 residential households have been fully paid compensation for replacement housing and there are 17 non-residential households have been paid and other details are shown in Table 3 below.

Table 3: Status of Payment of Compensation to Affected Households

Road Section Total Residential Non-residential Number of Fully paid Not paid Fully paid Not paid AHs Kamashi 17 9 - 8 - Yakkabag 9 3 - 6 - Shakhirsabz 21 18 - 3 - Kitab 0 - - - - Total 47 30 - 17 -

A. Project area district Kamashi: 4P79 Karshi-Shakhrisabz 28-60 km

19. The draft SDDR for this section had been prepared in December 2016 by ADB and disclosed on ADB’s website. The draft SDDR covered 14 affected households. However, PIU together with national resettlement specialist conducted survey of affected area in Kamashi district in November-December 2018. As a result of meetings with local cadaster, architecture, design institute and khokimiyat the final number of 17 AHHs were confirmed and verified. The compensation amount and payment details are presented in Table 4 and Figure 2.

Table 4: Compensation Payment Status Kamashi District

No ID Amount of Compensation for Damage, UZS 1 K-1-R 17,528,500 2 K-2-R 8,594,199 3 K-3-R 29,222,300

No ID Amount of Compensation for Damage, UZS 4 K-4-R 43,894,500 5 K-5-R 13,753,500 6 K-6-R 29,015,500 7 K-7-R 54,436,500 8 K-8-R 21,745,300 9 K-9-R 13,954,500 10 K-10-NR 66,504,380 11 K-11-NR 53,641,068 12 K-12-NR 67,627,964 13 K-13-NR 44,081,547 14 K-14-NR 140,348,394 15 K-15-NR 47,889,917 16 K-16-NR 23,876,057 17 K-17-NR 55,040,912 Total 731 155 039

Figure 2: Examples of Proof of Payment in Kamashi District

20. Consultations and Communication with affected People. Based on the EA request letter to Kashkadarya province Khokimiyat, consultation meeting for affected people living along the road line has been conducted from 6 to 10 November 2018 (Attachment 1). AHs were provided with the general information on the project benefits and other construction related information. Also, grievance redress mechanism (GRM) were discussed and explained as how to file grievances and responsible parties to address project related LAR complains. Also, compensation payment details were verified during public consultation. Some facts of consultation meetings are given in Figure 3.

Figure 3: Consultation meetings in Kamashi District

B. Project area district Yakkabag: 4P79 Karshi-Shakhrisabz 60-64 km and 4K319 Tanhoz-Kazak 18-30 km

21. The draft SDDR for this section had been prepared in December 2016 by ADB and disclosed on ADB’s website. During the draft SDDR preparation in 2016, the right-of-way (RoW) was confirmed as 78 meters in total (39 meters from the axis to both sides) and as a result, 122 affected households (AHs) was identified based on this RoW. PIU together with national resettlement specialist conducted field visit in order to confirm and verify the total number of affected households in the Yakkabag district in November-December 2018. As a result of meetings with local cadaster, architecture, design institute and khokimiyat and provided documents the actual RoW in the above-mentioned road section is 34 meters not 78 meters (17 meters from the axis to both sides). Therefore, there are only 9 structures were identified as affected by the road construction. EA provided the below to ADB as confirmation of actual number of AHHs: (i) the basis to establish RoW of the road section 4K-319 18-30km (for both 39 meters RoW and 78 meters RoW, if two different RoWs are established for different purposes); and (ii) CR view about which RoW should be applied to this project based on the regulations/ resolutions etc. in Uzbekistan.

22. Moreover, there were several meetings held with representatives of Committee for Roads, khokimiyats and design institutes and clarified and decided that “In accordance with the protocol resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated 22.05.2013 No. 146 “On social development and improvement works in Kashkadarya

region” and along with Kashkadarya regional road project, municipal authorities (Khokimiyat) implement works in Yakkabag district on the improvement 78 meter right of way (39 meters from the axis to both sides) on sections 18 km-30 km of the road 4K-319. According to the above-mentioned Protocol 122 affected households were identified.” But in this protocol stated that this road will be expansion for beautification, accomplishment of public services not because of the ADB financed project.

23. According to the approved Detailed Design for the "Kashkadarya Regional Road Project right of way was defined as 34 m (17 m from the axis to both sides). Only 9 affected households were identified, and all 9 compensation has been paid off. The official letter from CR and design institute are attached in appendixes 3 and 4 respectively.

24. The PIU together with national consultant conducted detailed due diligence of all payments and initiated continues meetings with representatives of Bank and local government. The compensation details and some examples of proof of payments are presented in Table 5 and Figure 4.

Table 5: Compensation payment status Yakkabag District

No ID Amount of Compensation for Damage, UZS Yakkabag district 18-30 km 1 Y-1-R 74,277,000,00 2 Y-2-R 25,712,814,00 3 Y-3-R 102,459,194 4 Y-4-NR 28,551,238,00 5 Y-5-NR 10,754,594,00 6 Y-6-NR 10,168,576,00 7 Y-7-NR 18,995,392,00 Total: 168,459,614 Yakkabag district 60-64 km 8 Y-8-NR 20,979,539 9 Y-9-NR 19,237,000 Total: 40,216,539 Sub-Total: 208,676,153

Figure 4: Examples of Proof of Payment in Yakkabag District

25. Consultations and Communication with Affected People. Based on the EA request letter to Kashkadarya province Khokimiyat, consultation meeting for affected people living along the road line has been conducted from 6 to 10 November 2018 (Attachment 1). AHs were provided with the general information on the project benefits and other construction related information. Also, GRM were discussed and explained as how to file grievances and responsible parties to address project related LAR complains. Also, compensation payment details were verified during public consultation some facts of consultation meetings are given in Figure 5.

Figure 5: Consultation meetings in Yakkabag District

C. Project Area District Shakhrisabz: M39 Almati-Termez 1164-1173 km

26. The draft SDDR for this section had been prepared in December 2016 by ADB and disclosed on ADB’s website. The draft SDDR covered 21 Affected Households. PIU together with national resettlement specialist conducted filed visit in order to confirm and verify the total number of affected households in the Sharizabz district in November–December 2018. As a result of meetings with local cadaster, architecture, design institute and khokimiyat the total number of affected households were confirmed as 21 AHHs. PIU together with national consultant conducted detailed due diligence of all payments and initiated continues meetings with representatives of Bank and local government. The compensation details and some examples of proof of payments are presented in Table 6 and Figure 6.

Table 6: Compensation Payment Status Shakhrisabz District

No ID Amount of Compensation for Damage, UZS 1 Sh-1-R 17,750,562 2 Sh-2-R 21,837,969 3 Sh-3-R 48,433,911 4 Sh-4-R 38,794,546 5 Sh-5-R 47,668,812 6 Sh-6-R 39,073,556 7 Sh-7-R 65,359,854 8 Sh-8-R 136,779,396 9 Sh-9-R 132,717,715 10 Sh-10-R 131,792,169 11 Sh-11-R 174,241,502 12 Sh-12-R 76,254,567 13 Sh-13-R 67,367,495 14 Sh-14-R 74,896,529 15 Sh-15-R 66,191,385 16 Sh-16-R 24,775,977 17 Sh-17-R 47,853,403 18 Sh-18-R 37,205,399 19 Sh-19-NR 8,375,716 20 Sh-20-NR 22,072,760 21 Sh-21-NR 262,740,848 Total: 1,542,184,071

Figure 6: Examples of Proof of Payment in Shakhrisabz District

27. Consultations and Communication with Affected People. Based on the EA request letter to Kashkadarya province Khokimiyat, consultation meeting for affected people living along the road line has been conducted from 6 to 10 November 2018 (Attachment 1). AHs were provided with the general information on the project benefits and other construction related information. Also, GRM were discussed and explained as how to file grievances and responsible parties to address project related LAR complains. Also, compensation payment details were verified during public consultation. Some facts of consultation meetings are given in Figure 7.

Figure 7: Consultation Meetings in Shakhrisabz District

D. Project Area District Kitab: M39 Almati-Termez 1144-1164 km

28. As a result of meetings with design institute, CR representatives, representatives of local khokimiyat and cadaster there were no AHHs identified from the project.

VI. LAR-RELATED LEGAL FRAMEWORK IN UZBEKISTAN

A. Constitution

29. The Constitution of the Republic of Uzbekistan (December 8, 1992) provides that: (i) Everyone shall have the right to own property (Article 36). The economy of Uzbekistan, evolving towards market relations, is based on various forms of ownership. The state shall guarantee freedom of economic activity, entrepreneurship and labor with due regard for the priority of consumers’ rights, equality and legal protection of all forms of ownership (Article 53); (ii) An owner, at his discretion, shall possess, use and dispose of his property. The use of any property must not be harmful to the ecological environment nor shall it infringe on the rights and legally protected interests of citizens, juridical entities and the state (Article 54); and (iii) The land, its minerals, waters, fauna and flora, other natural resources shall constitute the national wealth and shall be rationally used and protected by the state (Article 55).

B. Land Code (30 of April 1998)

30. The Land Code (LC) is the main regulatory framework for land related matters in Uzbekistan. The LC regulates allocation, transfer and sale of land plots, defines ownership and rights on land. It describes responsibilities of different state authorities (Cabinet of Ministers, province, district, city khokimiyat) in land management; rights and obligations of land possessor, user, tenant and owner; land category types, land acquisition and compensation, resolution of land disputes and land protection. The LC also defines the terms of rights termination on land plot, seizure and land acquisition of land plot for state and public needs, and terms of seizure of land plot in violation of land legislation. The LC provides that: (i) Withdrawal of the land or part thereof for state and public needs is made by agreement with land user and tenant by decision respectively khokim of district, city, region or by decision of the Cabinet of Ministers (Article 37, Clause 1). In case of disagreement the land user or tenant of the land with a decision of district (city, region) khokim, or the decision of the Cabinet of Ministers to withdraw the land, this decision may be appealed in court (Article 37, Clause 2); (ii) Losses caused by violation of the rights of land users, tenants and land owners (including lost profits), shall be reimbursed in full (Article 41, Clause 3); (iii) The withdrawal of the land for state or public needs may be produced after allocated to land user or tenant an equivalent land plot and the compensation all losses including lost profits (Article 41, Clause 4); and (iv) The LC (Article 36, Clause 1) specifies instances when the right to the land can be terminated. Termination of the right of possession and the right of permanent or temporary use of land is made by decisions, respectively, of khokims of districts, cities, regions or by the decision of the Cabinet of Ministers on the proposal of the bodies exercising state control over the use and protection of land, on the basis of supporting documents justifying the termination of the rights. In case of disagreement with the decisions of the Cabinet of Ministers and the officials of the termination of the right of possession, the right of permanent or temporary land use natural and legal persons may appeal to the court (Article 36, Clause 4).

31. According to Article 39, Clause 1 land user, tenant and land owner have besides others the right for reimbursement of losses (including lost profits), in case of withdrawal of land or compensation costs for voluntary renunciation of land (Article 39, Clause 1, sub-Clause 7).

32. The LC (Article 86, Clause 1) specifies the cases where losses of land users must be compensated in full including lost profits: (i) Seizure, redemption or temporary occupation of land; and (ii) The restriction of their rights in connection with the establishment of water protection zones, coastal strips, sanitary protection zones of water bodies, zones of formation of surface and underground water, zones of resort areas, public areas of biosphere reserves, protected zones around national parks, game reserves, national nature monuments, sites of cultural heritage, discharges, roads, pipelines, communication and power lines.

33. According to the Article 87, Clause 1 losses of agricultural and forestry production, caused by the withdrawal of agricultural and forest land, including agricultural land, owned and used by individuals to use them for purposes not related to agriculture and forestry, restrictions on the rights of land users and tenants or deterioration land due to the impact

caused by the activity of enterprises, institutions and organizations, shall be reimbursed in addition to the indemnity provided for in Article 86. Losses of agricultural and forestry production is compensated by legal and natural persons: (a) which removes withdrawn agricultural and forest lands for purposes not related to agriculture and forestry; and (b) around objects that set security, sanitary and protection zones with the exception of the revolutions of agricultural and forest land or transfer them to less valuable lands.

C. Resolution of Cabinet of Ministers No. 97 (29 May 2006)

34. This resolution regulates compensation for losses to individuals and legal entities due to seizure of land plots for state and public needs. This regulation is mainly dealing with land plots, houses, building and structures of individuals and legal entities.

35. The resolution determines the procedure for seizure of land or part thereof, as well as the procedure for calculating the amount of compensation to individuals and legal entities for the demolished residential, industrial and other buildings, structures and plantings in due to seizure of land for state and public needs. The Resolution contains: (i) procedure for calculating the amount of compensation to individuals and legal entities for the demolishing houses (apartments, buildings, structures and plantings) due to seizure of land plots for state and public needs; (ii) procedure and conditions for providing residential premises for owners of demolishing houses; (iii) procedure and conditions for providing land plots to individuals for individual housing construction instead of the demolishing residential house (apartment); (iv) procedure of losses compensation to legal entities due to seizure of land plots for state and public needs; (v) procedure and calculation terms for transfer and reinstatement at the new place of dwelling houses, buildings and structures to be demolished; and (vi) Procedure and calculation terms of in case of construction in a new place of dwelling houses, buildings for individuals and legal entities, houses (apartments) of which are to be demolished.

36. Khokimiyats of respective districts (cities) are required to notify in writing the owners of residential, industrial and other buildings, structures and trees about the decision, not later than six months before the demolition, with the annex to the notice copies of the relevant decisions of the Council of Ministers of the Republic of Karakalpakstan, khokims of provinces and Tashkent city on seizure of land, demolition of residential, industrial and other buildings, structures and trees located on the land plot.

37. According to the Clause 8 withdrawal of land plots shall be made with the provision that the following types of compensation shall be provided: (i) Provision of other equal suitable dwelling with the floor space not less than social norm for residential areas to citizens for ownership and payment of the planting costs; (ii) Payment to citizens the cost of the demolished residential facilities, other buildings, structures and plantings; (iii) Provision to the citizens of a land plot for individual housing construction within the limits of stipulated norms with the provision of temporary housing on the conditions of lease agreement for the period of land plot utilization for up to two years with

compensation, in full volume, the cost of demolished houses (apartments), buildings, structures and plantings; (iv) Provision to legal persons of equal property and compensation other incurred losses caused by withdrawal of a land plot for state and public needs; (v) Compensation, in full volume, losses caused by withdrawal of a land plot for state and public needs; (vi) Relocation and restoration at a new place residential houses, buildings and structures that belong to citizens and legal persons and that will have to be demolished; and (vii) Construction at a new place residential houses, buildings and provision them to citizens and legal persons for ownership.

38. According to the Clause 11 evaluation of residential houses (apartments), buildings, structures, and determination of plantings costs, located at acquired land plots, shall be done by appraisal companies at the expense of an applicant. Property evaluation approaches vary from one executing agency to another but engaging independent appraisers (private companies) has become common practice. For the calculation of losses in the form of demolitions of buildings and structures is determined by their market value. Only evaluation of the losses of agricultural and forestry production is carried by the self-financing State Enterprises for Land Surveying and Real Estate Cadastre subordinated to Goscomzemgeodescadastre. In case of land acquisition, the evaluation of losses of agricultural and forestry production carries out in accordance to clear methodology described in the regulations approved by the governmental resolution.3 Period to restore lost products was adopted as four years.

39. The results of the assessment can be challenged by the customer.4 In case of need, to validate the evaluation report in accordance with the legislation, it can be an examination of the evaluation report by another appraisal organization. Appraisal organization conducting the examination, expresses an impartial judgment on the reliability of the valuation report, without a new (self) evaluation and without making its own conclusions, containing a project cost estimate. In case of disagreement of the customer with examination of the evaluation report such a dispute is subject to consideration by the court. In contentious situations at the request of the judiciary an Expert Commission created for examination of appraisal materials. Regulations on the organization of work of the Expert Commission and its composition approved by the above-mentioned governmental resolution No. 161.

40. It is important to note that according to the Clause 11 all materials appeared in the result of dismantling of demolished residential houses (apartments), other buildings and structures (except for unauthorized construction), located at the land plot to be acquired, shall be retained at the disposal of property developer or land owner (land user and leaseholder) who shall make full compensation to the owner. In specific cases, at will of the owner of demolished residential house (apartment), buildings, structures and plantings, materials appeared in the result of dismantling, based on the decision of hokims of relevant districts (towns), may be handed over to the owner. In this case the committee shall determine the cost of materials to be handed over to the owner at the market prices actual at the moment of demolition taking into account amortization.

3 Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No.146 dated 25 May 2011, Annex 2 4 Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No.161 dated 28 July 2008

41. In case of withdrawal of land plots that are used by citizens on the basis of lifetime ownership with right of inheritance, purchased on auction basis, they shall be provided with equal new land plot with the right of lifetime ownership with right of inheritance.

D. Civil Code (29 August 1996)

42. The Civil Code (CC) defines the legal status of participants of civil relations, the grounds and procedure of implementation of property rights and other proprietary rights, rights on intellectual property, regulates the contractual and other obligations, as well as other property and related personal non-property relations. The CC defines general rules of property seizure, determination of property cost and rights for compensation, terms of rights termination.

43. The CC provides that: person whose right has been violated may demand full compensation for damages, unless the law or the contract provides compensation for losses in a smaller size (Article 14, Clause 1). The Civil Code (Article 14, Clause 2) also specifies that losses are understood as: (i) expenses that the person whose right is violated, made or must make to restore the violated right; (ii) the loss of or damage to property (real damage); and (iii) the revenues that this person would have received under normal conditions of civil turnover if his right had not been violated (lost profits).

44. According to article 14, Clause 3 “If the person has violated law, revenues received as a result of this, the person whose rights were violated, has the right to demand compensation along with other losses, lost profits in the amount not less than such profits.”

45. According to article 7 “If an international treaty or agreement stipulates other rules than those stipulated by civil legislation, rules of the international treaty or agreement.” This rule is a common rule for all Uzbekistan’s laws.

46. According to the Article 8, Clause 3, the rights to the property which are subject to state registration shall arise upon the registration of the relevant rights to it, unless otherwise provided by law. Article 84, Clause 1 provides that the right of ownership and other real property rights, creation, transfer, restriction and termination of these rights are subject to state registration. This means that without registration the right to real estate property does not enter into the force. This statement is very important for the further understanding of LAR processes related to land acquisition and building’s demolition.

E. Resolution of Cabinet of Ministers No. 146 (25 May 2011)

47. This Resolution is aimed to improve the procedure of granting land plots, protect the rights of legal entities and individuals on land and improve the architecture of settlements and the efficient use of their land for construction in accordance with the Land Code and the Town Planning Code. This resolution has approved two Regulations: (i) Regulation on the procedure for granting land for urban development and other non-agricultural purposes, and (ii) Regulation on the procedure of compensation for land possessors, users, tenants and owners, as well as losses of agriculture and forestry. The Regulation on the procedure for granting land for urban development and other non-agricultural purposes contains the following provisions:

(i) Order of land plot location, preparation and approval of site selection and land allocation documents without approved planning documentation; (ii) Order of placement, selection and land allocation with approved planning documentation; (iii) Order for rejection in the selection and land allocation for construction; (iv) Provision (sale) of land plots for individual housing construction; and (v) Elements of urban planning documents and development regulation lines.

48. The Regulation on the procedure of compensation for possessors, users, tenants and land owners, as well as losses of agriculture and forestry includes the following: (i) Compensation for losses of owners, users, tenants and land owners; (ii) Compensation for losses of agriculture and forestry; (iii) cost of irrigation and developing equal new land plot in return for seized irrigated agricultural land; (iv) Cost of fundamental improvement of grassland and pasture; (v) Scheme for determination of losses of land possessors, users, tenants and owners, as well as losses of agriculture and forestry; and (vi) Coefficients on location of seized land plots.

49. The losses of land possessors, users, tenants and owners, as well as losses of agriculture and forestry should be compensated before granting of documents certifying rights on land plot. The regulation also orders that demolition of house, or building shall be done only after agreeing on compensation and providing replacement premises. The regulation orders that compensation has to be paid before starting any construction work. The land possessors, users, tenants and owners, whose land plots are seized and to whom land plots are granted, in case of disagreement with defined amount of losses, can appeal to court. In case of acquisition and temporary occupation of land plot or part thereof, the following would be subject to compensation: (i) Cost of land plot, owned by individuals and legal entities; (ii) Cost of residential houses, constructions and installations, including incomplete constructions, and also located outside of allocated plot, if its further utilization is impossible due to seize of land plot. (iii) Cost of fruits and berries, protection and other perennial plants; (iv) Cost of incomplete agricultural production; and (v) Lost profit.

50. Above described Laws and Regulations mention that non-titled and squatters on land and building or structures are ineligible for any compensation.

51. Collectively, these regulations provide a sound basis for acquiring land for public purposes and for compensating land users according to the registered use of the land in Uzbekistan.

F. Tax Code (TC)

52. The TC is a regulatory framework for taxation related matters of individuals and legal entities. This law regulates compensation for vulnerable group of people in terms of applying discounts or exemption from property taxes, income tax and other taxes stipulated in this TC.

G. Labor Code and Employment Law

53. These two documents are main legislations regulating labor relations of individuals employed with labor contract by enterprises, institutions, organizations of all type ownership forms, including contracted by individuals. These legislations are considering interests of employees and employers provide efficient function of labor market, just and secure labor conditions, protection of labor rights and employees health, promote to growth of labor productivity, increase of work quality, raising on this matter welfare and social livelihood level of the population.

54. Both ADB policy and the Uzbek law provide for the indemnification of APs who lose a job because of land/assets acquisition under a public interest project. The two, however, differ substantially on how the matter is conceptualized and resolved in practice. ADB policy compounds the matter as an income rehabilitation issue and thus requires that the actual job income lost by the APs is fully reimbursed to them. This approach covers temporary and permanent job losses and is generally implemented through an allowance providing the APs their declared monthly salary (what should be substantiated by the supporting documents) for the number of months of business stoppage up to a maximum of 12 months which is the benchmark for permanent job loss. For informal permanent jobs without declared salaries the approach is the same but based on national minimum salary. To guarantee proper policy application the payment of the job loss allowances is to be directly disbursed to the APs by the project proponent.

55. The national legislation, instead, limits the matter to the payment as mandated by the Labor Code of fixed employment termination indemnities due by an employer to his employees and to the obligation of the project proponent to reimburse the employer of the cost of those indemnities mandate by the Civil Code. Such an approach excludes from job loss compensation informal employees without a declared salary, applies only to permanently affected jobs and does not automatically guarantee that the APs receive their job termination dues.5

H. Resolution of Cabinet of Ministers No. 44 (15 February 2013)

56. This resolution determines the procedure for the appointment and payment by Makhalla allowances for families with children under the age of 14 years, allowances for childcare until the age of two years and allowance for low income families. According to this resolution the following types of families are entitled for allowances: (i) families who have lost both parents and children involved in family education; (ii) families where one or both parents are disabled children; (iii) widow (er), raising two or more children under the age of 14, living separately from other relatives; (iv) family with disabled children; (v) mothers or fathers who are bringing up the children in a single-parent family. In this case the fact of child rearing mother (father) in an incomplete family established by makhalla;

5 Based on the Labor Code of 1996, last amended on 2015 (Article 67) loss of employment is to be compensated with 2 months average salary plus a severance pay of a maximum of 1 month average salary depending on the length of the employment lost. Also, according to the Civil Code (Article 14) all losses (including real damage, lost profits) are to be compensated.

(vi) families in which one or both parents are unemployed who has been registered at centers to promote employment and social protection of the population as jobseekers; and (vii) single retired persons.

I. Resolution of Cabinet Ministers No. 3857 (16 July 2018).

57. The Uzbekistan’s legislation does not define compensation as targeting the rehabilitation of the APs livelihood. It instead focuses on the mere compensation of directly measurable physical impacts or incomes.

58. The resolution “On measures to improve the effectiveness of training and realizing projects with participation of international financial institutions and foreign government financial organizations” partly provides that payment of compensation for the land acquisition, demolition of houses, other structures, plantings within the framework of projects with the participation of International Financial Institutions (IFIs), if it is agreed and stated in agreements, then will be carried out by authorized bodies in accordance with the requirements of IFIs or Foreign Governmental Finance Organizations (FGFOs).

J. Decree of the President of the Republic of Uzbekistan No. 5495 (1 August 2018)

59. Decree “On measures on cardinal improvement of investment climate in the republic of Uzbekistan” partly provides that the adoption of decisions on the seizure of land for state and public needs is allowed only after an open discussion with interested parties whose land plots are planned to be seized, as well as assessing the benefits and costs; demolition of residential, industrial premises, other structures and structures belonging to individuals and legal entities, with the withdrawal of land plots is allowed after full compensation of the market value of immovable property and losses caused to owners in connection with such withdrawal.

VII. MITIGATION MEASURES PROPOSED FOR LAR IMPACTS

60. In order to compensate the LAR impacts due to acquisition of land plots and demolishing of houses/structures for the reconstruction of Kashkadarya Regional Road Project (Reconstruction of M-39, 4P-79, and 4K319 Road) the following mitigation measures (compensation mechanisms) have been proposed by CR in accordance with local legislation.

A. Compensation for Structures

61. Buildings will be compensated at fair market price. For partial impacts (structure wall, fences etc.), cash compensation at replacement rates will be paid to restore the remaining structure to its original state. Unaffected portions of a structure will also be compensated if they become unlivable after impact occurs. The access to similar or better levels of infrastructure will be provided to displaced households (water, gas and electricity connections, access to social infrastructure etc.

62. The land allocation and compensation for land users is regulated by the Resolution of Cabinet of Ministers No. 97. In accordance with Clause 8 due to acquisition of land plots the following types of compensation will be provided: (i) Provision of other equal suitable dwelling with the floor space not less than social norm for residential areas to citizens for ownership and payment of the planting costs; (ii) Payment to citizens the cost of the demolished residential facilities, other buildings, structures and plantings; (iii) Provision to the citizens of a land plot for individual housing construction within the limits of stipulated norms with the provision of temporary housing on the conditions of lease agreement for the period of land plot utilization for up to two years with compensation, in full volume, the cost of demolished houses (apartments), buildings, structures and plantings; (iv) Provision to legal persons of equal property and compensation other incurred losses caused by acquisition of a land plot for state and public needs; (v) Compensation, in full volume, losses caused by withdrawal of a land plot for state and public needs; (vi) Relocation and restoration at a new place residential houses, buildings and structures that belong to citizens and legal persons and that will have to be demolished; and (vii) Construction at a new place residential houses, buildings and provision them to citizens and legal persons for ownership.

63. It is important to note that according to the Resolution No. 97. All materials appeared in the result of dismantling of demolished residential houses (apartments), other buildings and structures (except for unauthorized/non-titled construction), located at the land plot to be acquired, shall be retained at the disposal of property developer or land owner (land user, leaseholder) who shall make full compensation to the owner. In specific cases, at will of the owner of demolished residential house (apartment), buildings, structures and plantings, materials appeared in the result of dismantling, based on the decision of khokims of relevant districts (towns), may be handed over to the owner. In this case the committee shall determine the cost of materials to be handed over to the owner at the market prices actual at the moment of demolition taking into account amortization.

B. Compensation for Crops and Trees

64. Loss of income from crops planted on the affected land will be compensated at fair market price based on an allowance equivalent to 1-year average net income computed based on the average income over the past 3 years. Loss of income from fruits trees will be compensated based on the average annual income for the past 3 years multiplied by 4 times to reflect the duration from planting to reach the productive stage plus number and cost of saplings (Clause 10, Resolution No. 146). In the case of loss of timber trees, compensation will be based on the market value of their dry wood volume.

65. As already mentioned above, according to the Resolution No. 97 (Clause 12, Appendix 2) in specific cases, at will of the owner of demolished residential house (apartment), buildings, structures, materials appeared in the result of dismantling, as well as the plantings, based on the decision of khokims of relevant districts (towns), may be handed over to the owner. In this case the committee shall determine the cost of materials to be handed over to the owner at the market prices actual at the moment of demolition taking into account amortization (para. 63).

C. Loss of Business

66. In accordance with local regulations (Resolution No. 146) the cash compensation will be paid to legal entities that lost their income due to land acquisition or demolishing of buildings at market value for all damages or opportunity costs incurred. The compensation for lost profit is based on the average of annual income for last 3 years and the period needed for the restoration of demolished structure or business (the period of land allocation, design and construction). Burden of proving lost profit will be rest on the AP based on recognized documented evidence (financial reports, and etc.).

D. Shifting and Relocation Allowances

67. Due to permanent acquisition of residential buildings and further physical displacement the shifting allowance will be paid by CR to the affected household.

68. According to clause 8 of the Regulations approved by the governmental resolution No. 97 dated 29 May 2006 defined provision to the citizens of a land plot for individual housing construction within the limits of stipulated norms with the provision of temporary housing on the conditions of lease agreement for the period of land plot utilization for up to two years with compensation, in full volume, the cost of demolished houses (apartments), buildings, structures and plantings.

69. According to clause 19 of the above-mentioned resolution #97 transportation of belongings of the owner of the demolished residential house (apartment) to the new apartment shall be done for the account of a property developer or land owner (land user and leaseholder) to whom withdrawn land plot is allocated.

E. Review of Compensation and Replacement Cost

70. Valuation of the project affected assets in Uzbekistan is done by professional, licensed valuators. The valuation method followed by the professional valuators is somewhat in accordance with the ‘International Valuation Standards’ published by the International Valuation Standards Committee (IVSC), subject to variation to meet local established law, custom, practice and market conditions. Market value is defined by IVSC and adopted by Royal Institution of Chartered Surveyors (RICS) as “The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after popular marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.”

71. Since 1996, legislation in Uzbekistan has been actively developed in the field of valuation. The modern definition of market value for the first time appeared in the legislation in 1996 in the following form: “Market value of the property, including the value of the shares or other securities, is the price at which a seller having full information on the cost of property and not obliged to sell it, was willing to sell it and the buyer having full information about the value of the property and not obliged to purchase, would agree to buy.” Later on in the Law “On Valuation Activity” a market value was defined as: “Under the market value of the assessment is meant the most probable price at which the property assessment can be disposed of in the open market in a competitive environment where the parties of the transaction are in their own interests reasonably and without coercion, all the necessary information, and the magnitude of the transaction price does not reflect any or extraordinary circumstances, including the obligation for a party to enter into this transaction.”

72. Sequencing of legal acts and their contents characterize the state and public understanding of the theory and practice of market valuation. This is confirmed by a number of definitions and norms declared in the Law “On valuation activity.” For example: (i) “Valuation activities are the activities of appraisal organization, aimed at determining the value of the assessment.” and (ii) “Appraisal organization - a legal entity licensed to carry out valuation activities. Appraisal organization in its activity is independent. No interference consumer services (hereinafter - Customer), or other interested parties in the evaluation activities of the organization. Creation of the appraisal organization and realization of valuation activities by public authorities and administrations are prohibited, unless otherwise provided by law.”

F. Land Acquisition for Public Purposes

73. The establishment of a project (like road construction etc.) as a Public Purpose activity endowed with juridical personality and triggering the right of Eminent Domain is contingent on the promulgation of a Project Decree to be signed by the President in case of loan agreement with ADB or other international or foreign financial organization. Such a resolution clearly establishes that the Project fits the public interest characters defined by the Law, identifies project location and governmental bodies and local governments involved, and provides a preliminary assessment of the properties to be acquired under the right of eminent domain based on cadastral data and estimate relative costs based on market values. Technically, surveyors and valuators tasked with the detailed field measurement of project-affected assets and their valuation at market rate can enter the affected properties only after the Resolution is emanated.

G. Resettlement assistance

74. There is no resettlement assistance requirement for physically and economically displaced persons according to the country’s expropriation law. Therefore, no assistance is provided for livelihood rehabilitation/income restoration or other resettlement assistance than shifting assistance and rental assistance.

H. Other Good Practices

75. In the land acquisition exercise for the project, Shakhrisabz district performed the best. Acquisition of the land parcels for state and public needs was carried out with the consent of the land owners following the decision of the khokimyat. Replacement land was provided to all the affected households in return for the acquired land plots as “land for land” compensation. Moreover, in order to ensure more comfortable living conditions, extra land plots were allocated based on family needs. In rural areas many members of an extended family live in one household consisting of several generations. Therefore, whenever there was a preference, a family received additional land plot for housing (500 m2 per family). Thus, involuntary resettlement created opportunities for a younger generation for independent life. Adequate connectivity to the public services and infrastructures is provided to such newly constructed houses. These new communities are constructed as neighboring communities to the affected or host communities. The khokimyat makes sure that public utilities (gas, power, water, and roads) as well as infrastructure and social services (school, kindergarten, and medical points) are made available to all the resettled households. Thus, the living conditions of the resettled households are better than they had before. However, as per the Land Code, in cases of

disagreement of the land owner with the decisions of the khokimyat for the land acquisition, these decisions can be appealed against in a court of law.

VIII. CONSULTATION, DISCLOSURE AND GRM

A. Consultation and Disclosure

76. During the PPTA inception mission site visit and during the DDR update, the ADB team was informed by the CR that the respective district khokimyats had notified and consulted with the proposed affected households about the project and about their land to be taken for the project. Indeed, when the ADB team asked some of the assembled persons about any consultations, the people agreed and, some of them mentioned that they were allowed to use some plots of land for cultivation that were not yet required for the construction activities.

77. As indicated in the methodology section, the PPTA consultants carried out three FGDs in 2016. A total of 67 persons (26 females and 41 males) representing 67 households participated in the discussions. The subject matter of the consultations was the status of resettlement measures taken by the EA. The overall approach used during the FGDs was to focus on ensuring the participation of the affected households, especially women, in the affected communities and understand the nature of impact and issues faced by them. Moreover there were another FGD were carried out during the DDR update preparation by ADB consultants on 6-10 November 2018 in all project districts (para. 17 and 18, Table 2 and 3), there were the general information were given to AHs, for instance length, width, construction period, forms and steps address in case of some grievances exist.

78. The findings of the consultations showed that the affected households generally had some reservation about land acquisition. Table 7 below provides the details of the FGDs carried out.

Table 7: Details of the FGDs Organized in the Project Area

Date Location No. and Type of Main topics discussed Participants 03 June Qozoq qishlogi Total 17 Persons AHs requested to reconsider the design and 2016 (11 Males and avoid impacts on their houses. During the 6 Females) discussion the AHs understood that the RRF is the EA and decided to collectively address their request letter to the RRF. 03 June Bolgali qishlogi Total 22 Persons Asked if impact can be avoided. 2016 (14 Males and If impact is not avoidable, then can AHs 8Females) continue to stay in the remaining part of their land? They were informed that the reconstruction of their houses will be according to architectural planning requirements. 03 June Esat qishlogi Total 28 Persons AHs requested to know more on 2016 (16 Males and compensation entitlements, specifically on 12 Females) assessment rules if property will be partly impacted and the remaining part will be unviable to use. The AHs felt that their properties were underestimated and

Date Location No. and Type of Main topics discussed Participants requested to consider valuation reports from firms contracted by them. 6-10 All project All AHs (i) to disseminate information to the people November districts about the project in terms of its activities 2018 and scope of work; (ii) to involve people as stakeholders in project planning and further during implementation; (iii) to seek local peoples' views on minimizing probable adverse impacts on land acquisition, involuntary resettlement and indirect impact to livelihood; (iv) to make people aware of the future plan of action; (v) to make people aware the process of Grievance Redress Mechanism; (vi) to assess the local people's willingness to get involved with the project and enumerate the measures to be taken during the implementation of the project.

B. Grievance Redress Mechanism

79. The existing GRM in Uzbekistan does not reflect a policy gap. The country has an established GRM based on law. ADB encourages co-opting the existing or local GRM, which is more efficient and useful as the people are aware of the national GRM's existence. According to the Resolution No. 97 (29 May 2006) the Khokimiyats of the respective rayons (cities) are obliged to notify owners of residential, production and other buildings, constructions and plantings on the made decision in writing for signature not later than six months prior to demolition, attaching to the notice copies of the relevant decisions of the khokims of rayons (cities) and regions on the basis of the decision of the Cabinet of Ministers of the Republic of Uzbekistan on any land acquisition, demolition of residential, production and other buildings, constructions and plantings located in the land.

80. Also, according to the Law on the Appeals of Individuals and Legal Entities (No. 378, 03 December 2014), the application or complaint shall be considered within fifteen days from the date of receipt in the state authority, which is obliged to resolve the issue on the merits, as well as require additional study and (or) check, a request for additional documents - up to one month.

IX. SUGGESTED CORRECTIVE MEASURES AND CONCLUSION

81. It is recommended that any unforeseen impact during the construction shall be mitigated. The EA shall work in coordination with the construction contractors to ensure to comply with the requirements in the resettlement framework. The EA shall comply with the health and safety requirements as mentioned in the Initial Environment Examination and Environment Management Plan and will follow the core labor standard.

82. With reference to the identified gap related to non-compliance, if there is any, it is agreed with the EA that construction works shall not commence until full compensation payment has been completed.

83. Any unanticipated impact during the project construction due to possible design change or any other contingency that results in land acquisition will require the EA to prepare a corrective action plan or a resettlement plan and compensation paid according to the entitlement matrix in the resettlement framework endorsed by the EA for the purpose, which is formulated in accordance with the country’s relevant laws and ADB’s Safeguard Policy Statement. As stated in the resettlement framework, the EA will make adequate budget provision for implementing the corrective action plan or a resettlement plan and will transfer funds to the respective district khokimiyats and the latter will make the compensation payment, as is the practice in the country. The corrective action plan or a resettlement plan will be post on the ADB website and relevant information from it will disclosed in the Uzbek or Russian language to the project AP.

X. MONITORING AND REPORTING

84. Monitoring of the unanticipated activities will be the responsibility of CR. CR, with ADB consultant will regularly monitor and measure the progress of implementation of the LAR-related activities, as well as the all proposed mitigation measures if any. CR will prepare monthly monitoring reports to ensure that the implementation of the LAR-related activities and proposed corrective measures has produced the desired outcomes if any. The PIU will provide ADB with an effective basis for assessing the progress of land acquisition and resettlement activities, corrective measures and identifying potential difficulties and problems if any.

85. The monitoring will involve administrative monitoring to ensure that implementation is on schedule and problems are dealt with on a timely basis CR through its PIU will: (i) Monitor the progress of implementation of LAR-related activities and proposed corrective measures if any; (ii) Verify the compliance with safeguard measures and their progress toward intended outcomes; (iii) Document and disclose monitoring results and identify necessary corrective and preventive actions in the monthly monitoring reports; and (iv) Submit semiannual social safeguards monitoring reports (SMR) to ADB.

Appendix 1: List of Affected Households with Residential Impact

No. District ID Road Section Decree of Khokim Amount of Paid In Compensation for Compensation Percentage Damage, UZS 1 Kamashi K-1-R 4P79 Karshi- 18.08.2015 №х-484/8 18,282,000 17,528,500 96 2 K-2-R Shakhrisabz 28-60 km 8,783,200 8,594,199 98 3 K-3-R 30,230,800 29,222,300 97 4 K-4-R 45,093,000 43,894,500 97 5 K-5-R 14,304,000 13,753,500 96 6 K-6-R 30,035,000 29,015,500 97 7 K-7-R 55,837,000 54,436,500 97 8 K-8-R 23,613,800 21,745,300 92 9 K-9-R 14,588,000 13,954,500 96 10 Yakkabag Y-1-R 4K319 Tanhoz-Kazak 17.02.2016 №х-192/02 77,621,000 74,277,000 96 11 Y-2-R 18-30 km 13.12.2014 №х-1484/12 26,832,564 25,712,814 96 12 Y-3-R 17.02.2016 №х-192/02 107,947,193 102,459,194 94 13 Shakhrisabz Sh-1-R M39 Almati-Termez 26.04.2016 №х-1196/04 18,608,516 17,750,562 95 14 Sh-2-R 1164-1173 23,142,124 21,837,969 94 15 Sh-3-R 51,130,408 48,433,911 95 16 Sh-4-R 40,795,769 38,794,546 95 17 Sh-5-R 50,213,741 47,668,812 95 18 Sh-6-R 40,765,769 39,073,556 96 19 Sh-7-R 67,732,746 65,359,854 96 20 Sh-8-R 115,010,317 136,779,396 100 21 Sh-9-R 139,986,364 132,717,715 95 22 Sh-10-R 118,727,544 131,792,169 100 23 Sh-11-R 180,652,259 174,241,502 96 24 Sh-12-R 70,245,420 76,254,567 100 25 Sh-13-R 70,908,797 67,367,495 95 26 Sh-14-R 78,837,697 74,896,529 95 27 Sh-15-R 65,363,780 66,191,385 100 28 Sh-16-R 26,562,758 24,775,977 93 29 Sh-17-R 50,365,274 47,853,403 95 30 Sh-18-R 38,820,647 37,205,399 96

Appendix 2: List of affected households with non-residential impact

No. District ID Road Section Decree of Khokim Amount of Paid In Compensation for Compensation Percentage Damage, UZS 1 Kamashi K-10-NR 4P79 Karshi- 05.12.2014 №х1484/12 66,504,381 66,504,380 100 2 K-11-NR Shakhrisabz 28-60 km 53,641,068 53,641,068 100 3 K-12-NR 72,609,963 67,627,964 93 4 K-13-NR 44,081,547 44,081,547 100 5 K-14-NR 143,586,393 140,348,394 98 6 K-15-NR 48,476,202 47,889,917 99 7 K-16-NR 26,225,773 23,876,057 91 8 K-17-NR 55,040,912 55,040,912 100 9 Yakkabag Y-4-NR 4K319 Tanhoz-Kazak 13.12.2014 №х1484/12 29,609,238 28,551,238 96 10 Y-5-NR 18-30 km 11,708,594 10,754,594 92 11 Y-6-NR 10,834,576 10,168,576 94 12 Y-7-NR 20,044,391 18,995,392 95 13 Y-8-NR 4P79 Karshi- 21,658,539 20,979,539 97 Shakhrisabz 60-64 km 14 Y-9-NR 20,267,000 1,030,000 19237000 15 Shakhrisabz Sh-19-NR M39 Almati-Termez 26.04.2016 №х1196/04 8,825,716 8,375,716 95 16 Sh-20-NR 1164-1173 22,072,760 22,072,760 100 17 Sh-21-NR 262,740,848 262,740,848 100

Appendix 3 and 4: Letters to ADB from CR about the clarification of RoW and AHs in Yakkabag

Appendix 3 and 4