Land Acquisition and Resettlement Plan Compliance Report. ARM: Sustainable Urban Development Investment Program Tranche 2

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1 Land Acquisition and Resettlement Plan Compliance Report May 2018 ARM: Sustainable Urban Development Investment Program Tranche 2 LARP Area (Babajanyan - Tichina Highway) Prepared by the AM Partners Consulting Company LLC for the Yerevan Municipality for the Asian Development Bank.

2 2 This environmental and social monitoring 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.

3 May, 2018 SUSTAINABLE URBAN DEVELOPMENT INVESTMENT PROGRAM LARP FOR BABAJANYAN-TICHINA HIGHWAY UNDER PROJECT 2 COMPLIANCE REPORT Authored by: EXTERNAL MONITORING AGENCY AM PARTNERS CONSULTING COMPANY LLC SUBCONTRACT: DELICT LLC

4 Content CONTENTS 1 INTRODUCTION PROGRAM BACKGROUND OBJECTIVE AND SCOPE OF THE COMPLIANCE REPORT External monitoring and evaluation Compliance Review of Babajanyan-Tichina Highway LARP METHODOLOGY OF THE COMPLIANCE REVIEW Methods and activities ASSESSMENT OF COMPLIANCE LARP IMPLEMENTATION PERIOD COMPLIANCE AND ACCURACY OF DOCUMENTATION PACKAGES COMPLIANCE OF PAYMENT OF COMPENSATIONS AND ALLOWANCES Compensations and allowances paid Differences in actual and planned compensations and Impacts IMPLEMENTATION MODALITIES REHABILITATION CONTRACTS CONCLUSION AND DISBURSEMENTS IMPLEMENTATION OF LEGALIZATION AND CORRECTION ACTION PLAN Legalization issues Cadastral correction issues PUBLIC CONSULTATIONS AND INFORMATION DISCLOSURE Public consultations Information disclosure COMPLAINTS AND GRIEVANCES GRIEVANCE REDRESS MECHANISM COMPLAINTS AND GRIEVANCES UNDER THE LARP FOR BABAJANYAN-TICHINA HIGHWAY EXPROPRIATION AND COURT CASES SATISFACTION SURVEY APS AWARENESS ON LAR PROCESSES CONTRACTING, DISBURSEMENT AND RECEIPT OF COMPENSATIONS COMPLAINTS AND GRIEVANCES SATISFACTION WITH LARP PREPARATION AND IMPLEMENTATION IN DEPTH INTERVIEWS CONCLUSIONS AND RECOMMENDATIONS ANNEXES ANNEX 1: RESPONDENTS ANNEX 2: SATISFACTION SURVEY QUESTIONNAIRE ANNEX 3: COMPLAITS/APLICATIONS RECEIVED AND ADDRESSED BY PIU P age

5 Content List of Abbreviations ADB AH AP DESC EA IA EMA LAR LARF LARP MFF MEDI Asian Development Bank Affected household Affected person Detailed Engineering and Construction Supervision Consultant Executing Agency Implementing Agency External Monitoring Agency Land acquisition and resettlement Land acquisition and resettlement framework Land acquisition and resettlement program Multi Tranche Financial Facility RA Ministry of Economic Development and Investments PIU Project Implementation Unit SPS (2009) Safeguard Policy Statement (2009) YM Municipality of Yerevan 2 P age

6 1 INTRODUCTION 1.1 PROGRAM BACKGROUND 1. The Government of Armenia (GA) has received a loan from the Asian Development Bank (ADB) to finance the Sustainable Urban Development Investment Program (SUDIP) Project 2. The Ministry of Economic Development and Investments (MoEDI) of the RA is the Executing Agency (EA) and the Municipality of Yerevan (YM), is the Implementing Agency (IA) working directly with the Project Implementation Unit (PIU). Project 2 of the SUDIP is focused on three road missing links to complete the Yerevan Western Ring Road. i. Argavand - Shirak road link, of 1.3km, ii. Babajanyan-Ashtarak highway, of 6.5 km, which includes Babajanyan-Tichina and Tichina- Ashtarak highway sections and iii. Davtashen - Ashtarak highway of 2.4 km. 2. The above-mentioned 3 road links entail land acquisition and resettlement (LAR) with more than 200 affected persons (AP) to be physically and/or economically displaced. Project 2 has been classified as Category A 1 for the involuntary resettlement safeguard according to ADB guidelines. 3. To facilitate the preparation and implementation of the LARPs for Project 2 the Project area was divided into the following 4 parts: I. Argavand - Shirak Road Link II. III. IV. Babajanyan-Tichina: Tichina-Ashtarak highway Davtashen-Ashtarak highway 4. The LARP for Argavand-Shirak road link was prepared under Project 1 and was approved by ADB on 09 January Because of shortage of funds the Argavand-Shirak road link was removed from Project 1 to Project 2. External monitoring of the LARP for Argavand-Shirak road link is under the task of the Consultant engaged by PIU under the Project The PIU has prepared separate LARPs for Davtashen-Ashtarak highway, Ashtarak- Tichina and Babajanyan-Tichina sections. External monitoring of those 3 LARPs is delegated to AM Partners Consulting Company LLC, which operates as an External Monitoring Agency (EMA) for the Project The Compliance report for the LARP for Davtashen-Ashtarak road link was approved by ADB on 13 July 2017 and the Compliance Report for the LARP for Tichina-Ashtarak Highway area was approved by ADB on 06 December The current Compliance Review covers the LAR related issues for the Babajanyan-Tichina area. 7. The LARP for Babajanya-Tichina road link was accepted by ADB on 02 June 2017 and by the Government on 02 March 2017 (Government Decree (GD) N206Ն). Implementation of the LARP for Babajanyan-Tichina road link began in June 2017 after approval of the LARP by ADB and was completed in January The implementation of Babajanyan-Tichina highway road link foresees construction of approximately 2.3 km of urban dual carriageway with central reserve and footways. The first 300m will consist in connecting the project to the existing Babajanyan Highway that is already dual, the remaining 2000m will be constructed on new alignment within 1As per the ADB Operation Manual (OM) F1/OP (2009) a project is classified as Category A if > 200 people suffer significant impacts (relocation or loss of more than 10% of their productive assets).

7 an urban context. At the north end of this section the project connects to Section 7 highway covered by the corresponding LARP for Tichina Ashtarak. Picture 1 Map of LARP Implementation Area 1.2 OBJECTIVE AND SCOPE OF THE COMPLIANCE REPORT External monitoring and evaluation 8. The Program LAR Framework (LARF) requires the External Monitoring Agency (EMA) to carry out the external monitoring in parallel with the implementation of LARPs. The EMA monitors and verifies that the LARP implementation has been made according to the requirements of 2 P age

8 LARP and LARF to determine whether resettlement goals are achieved, livelihood and living standards are restored (and to what extent) and provide recommendation for improvement. 9. External monitoring entails two types of activities: a) short-term monitoring of LARPs implementation and compensation delivery and b) long-term evaluation of the rehabilitation effects of the LARPs. The short-term monitoring or the compliance review of the LARPs implementation has been carried out in parallel with the implementation of each LARP activity and has entailed extensive field visits and communication with APs. The long-term evaluation will be carried out before and after the LARPs implementation to find out if the LARPs rehabilitation objectives have been attained or not, as well as for the assessment of the LARPs implementation impact on the AHs Compliance Review of Babajanyan-Tichina Highway LARP 10. The current CR addresses the Babajanyan-Tichina Highway LARP implementation. The objective of the CR is to verify that compensation activities have been carried out based on the provisions of the ADB Safeguard Policy Statement 2009 (SPS 2009), local legislation, the Program LARF and LARP. The Report provides description of monitoring process and comparative analysis of the LARP implementation planned and actual results, delivery of compensations. The Report also identifies eventual complaints and grievances, the ways these were solved, the court cases and the general satisfaction of the APs. 11. In total, 202 AHs including owners, renters and users of the lands/buildings, business owners and employees with a total of 874 household members were to be affected by the implementation of the LARP. During the CR, EMA reviewed all the documentation of 202 AHs and interviewed well-informed household members of 145 AHs. The approval of this Compliance Report by ADB will be a condition to start civil works at the Babajanyan-Tichina Highway LARP area. 1.3 METHODOLOGY OF THE COMPLIANCE REVIEW Methods and activities 12. The methodological basis for the Compliance Review was the approved EMA Inception Report. EMA has performed the full range of possible activities stipulated by the methodology. 13. The EMA studied the RA Law on Eminent Domain, ADB SPS 2009, Program LARF, and the approved LARP for Babajanyan-Tichina Highway. EMA collected and collated necessary information, reviewed the project related documents, carried out a sample household survey. 14. During the performed desk reviews EMA studied the following financial and non-financial documents: Description Protocols, including the description of the affected assets for each AP, i.e. description of land plots, crops/trees; structures/buildings, improvements, businesses etc.; Valuation Reports, with detailed representation of the results of valuation of assets subject to acquisition done by licensed valuators; Contracts/agreements with the APs on property alienation and compensation where together with all the required provisions lot-code, surface, loss of assets, compensation amount and bank account, and the person s name are clearly mentioned; It must be signed by all coowners or by their authorized people. 3 P age

9 Payment documents for all the contracts/agreements indicating compensation aim, bank account, compensation amount, person and date of the contract/agreement signing and payment/compensation date. Information disclosure documents, including submission of description protocols and draft contracts/agreements, notifications on Eminent Domain, Grievances, including the responses by PIU Other documents and datasets. 15. Documents and profiles of all APs were studied. In order to verify that compensation had been paid to all APs, the EMA reviewed payment orders of all APs, except ones whose land plots were subject to Expropriation as of the date of the preparation of the present Report. For all APs under the expropriation cases, compensation lodging documentation was checked in order to confirm that relevant acquisition compensation amounts were lodged with courts for each AP. 16. Existence of all contracts, agreements and payment orders was checked, data contained in them was checked for adequacy and compliance, in particular: (i) signatures of all owners and verification by the notary, (ii) compliance of compensation amounts, (iii) adequacy of bank accounts, (iv) compliance of notary verification dates of documents (activities implementation) to the existing procedure (implementation schedule). 17. During the Desk review the total planed budget of compensations was compared with the actual amount of paid compensations. The differences in planned and actual compensations, if any, were revealed for each AP and analyzed in detail. The bases for deviation of each AP s compensation was revealed. In order to crosscheck the analyzed information the amounts of compensations for each type of loss as well as different allowances envisaged by the LARP were compared. 18. The processes of public hearings and consultations and the grievance redress procedures were also studied: all written complaints and responses to them were studied in detail. 19. Interviews with YM and PIU staff, DESC and LARP Implementation Team were carried out during monitoring as a result of which clarifications and interpretations were provided to individual issues and questions. 20. The EMA surveyed 145 AH (out of 202) in a face to face format with the application of a standardized questionnaire in terms of Satisfaction survey. 28 of surveyed AHs were vulnerable (out of 43 included in the LARP). The average interview lasted 17 minutes. The sample included all the main types of AHs (by the main types of impacts AHs faced). EMA selected the AHs randomly from the group of AHs facing certain impact. Within the selected AHs, EMA surveyed heads of households and managers of businesses, who formally present their households in relations with the PIU. The survey used a specially designed questionnaire and addressed in detail the overall LAR process (duration, compensation payment modalities, grievances redress mechanism (GRM), respondents satisfaction with specific aspects of LARP implementation, etc.), and the extent of the accomplishment of the objectives of the LARP. 21. EMA conducted in depth personal interviews with 12 AP/AHs. 22. Findings of external monitoring allowed concluding upon the reliability, comprehensiveness and accuracy of data, as well as compliance and efficiency for compensation delivery process for the compensated APs/AHs. 2 ASSESSMENT OF COMPLIANCE 4 P age

10 2.1 LARP IMPLEMENTATION PERIOD 23. The implementation of the Babajanyan-Tichina Highway (Section6) LARP started with sending of draft agreements and contracts to APs in June 2017 and was finalized in January For the implementation of the LARP a LARP Implementation team was hired by YM consisting of a Team Leader, a Lawyer and 3 Social Specialists. 2.2 COMPLIANCE AND ACCURACY OF DOCUMENTATION PACKAGES 24. The EMA verified the accuracy of documentation of the LARP for Babajanyan-Tichina Highway road section as a result of direct review of APs documentation. During verification process, EMA observed the documentation listed under paragraph Documents and profiles of all APs were studied. In order to verify that compensation had been paid to all APs, the EMA reviewed payment orders of all APs, except ones whose land plots were subject to Expropriation as of the date of the preparation of the present Report. For all APs under the expropriation cases, compensation lodging documentation was checked in order to confirm that relevant acquisition compensation amounts were lodged with courts deposit account for each AP. Existence of all contracts, agreements and payment orders was checked, moreover, data contained in them was checked for adequacy and compliance, in particular: (i) signatures of all owners and verification by the notary, (ii) compliance of compensation amounts, (iii) adequacy of bank accounts, (iv) compliance of notary verification dates of documents (activities implementation) to the existing procedure (implementation schedule). The compliance of data between the Description Protocols, Valuation Reports, Contracts/Agreements as well as payment documents was also checked. 26. Studies of external monitoring allowed concluding upon the accuracy and compliance of data and documentation packages. 2.3 COMPLIANCE OF PAYMENT OF COMPENSATIONS AND ALLOWANCES Compensations and allowances paid 27. The DESC calculated and presented in the LARP the compensations and allowances against the various types of impacts in accordance with the Entitlement Matrix of the LARP and the PIU applied respective rehabilitation measures (provision of compensations and allowances). Amount of compensations and allowances introduced by the LARP was totaling to 4,040,468,187 AMD (the VAT and registration amounts excluded 2 ). Actual amount of compensations and allowances paid to the AHs within the rehabilitation measures implemented by the PIU comprised 4,096,504,353 AMD. This amount contains all the compensations and allowances paid s of the LARP for Babajanyan-Tichina highway section as well as 164,269,508 AMD compensation amounts calculated and deposited with the Court under the Expropriation cases. The amount of actual compensations exceeds the amount of planned compensations by 56,036,166 AMD. EMA identified and analyzed this deviation between actual and planned compensations in details ,321,343 AMD VAT and 3,567,000 AMD registration and notary fees were included in the LARP budget, in addition to the compensation amounts to be paid s at replacement cost. 185,215,054 AMD was paid s for compensation of VAT to be paid by the APs to the state budget. The deviation of planned and actual VAT was due to changes in compensation amounts of some APs. All the registration cost were done by PIU. 5 P age

11 2.3.2 Differences in actual and planned compensations and Impacts 28. During the compliance review EMA identified and analyzed the deviations from the planned compensation amounts. The EMA discussed the changes with PIU and considers them necessary and justified. 29. After approval of the LARP by ADB and the Government a technical error was found in one valuation report. Due to an arithmetic mistake the compensation for a land plot of 51.4m 2 was calculated based on the price 6,457 AMD per 1m 2 instead of 14,15 AMD. As a result the compensation for that land was calculated 395,394 AMD below the correct amount. However the omission was found prior to LARP implementation and the corrected amount of compensation for land was included in the draft contract, which was submitted /AH. 30. Based on APs complaints as well as changes in measurements due to some corrections in ownership certificates of some APs/AHs in 10 cases the compensation amounts were changed. This resulted in increase of actual compensation amount for 55,640,772 AMD. Table1 represents the changes in planned and actual compensation for each of 10 AH. A detailed explanation of each case is presented below. Table1: LARP Babajanyan-Tichina Highway; 10 cases with differences in planned and actual compensations. N ID Planned Actual Difference (Actual- Planned) ,941,223 49,605, , B , , ,604,751 58,514,459-8,090, , , ,281 72,626, ,207,586 57,580, B-1 0 2,074,800 2,074, ,145,757 6,039, , ,768,713 4,822,213 3,053, B-1 27,288 97,288 70, B-1 1,089,728 1,185,478 95,750 Total 197,386, ,027,046 55,640, Case 1. The planned compensation to AP (ID 203) totaled 49,941,223 AMD, however 49,605,182 AMD was compensated. For legally-owned land 8,189,022 AMD was calculated, yet 7,852,981 AMD was compensated. According to special condition mentioned in the ownership certificate the owner was obliged to pay the cadastral value of the land in case of alienation of the property 3. As the amounts of the paid cadastral values are dedicated for YM budget and on the other hand the compensations for private land are being paid from the YM budget it was decided to deduct the cadastral value of the land from the compensation amount. Thus the cadastral value of 114.3m 2 land, which totaled 336,041 AMD, was deducted from the compensation amount. 32. Case 2. The compensation for a company (ID 243-B-1) was not calculated and was not included in the LARP. The company is VAT paid and according to the RA law of the profit tax the 3 The AP had to pay the cadastral value of the land plot to Municipality at the stage of privatisation of the land plot,,but the payment was postponed on condition that in future the AP should pay the cadastral value to the Municipality in case of any deal regarding the land plot. 6 P age

12 deadline of submission of tax report to the SRC for the VAT paid companies is defined as 5 th of April of the year next to the reporting year. During LARP implementation PIU requested and received from the SRC the required information 4. The compensation was calculated and the AP was compensated accordingly. The amount of compensation totaled to 480,095 AMD. 33. Case 3. The planned compensation (ID 255) totaled 66,604,751 AMD, however 58,514,459 AMD was compensated. According to special condition mentioned in the ownership certificate the owner was obliged to pay the cadastral value of the land in case of alienation of the property. As the amounts of the paid cadastral values are dedicated for YM budget and on the other hand the compensations for private land are being paid from the YM budget it was decided to deduct the cadastral value of the land from the compensation amount. Thus the cadastral value of m 2 land, which totaled 8,090,292AMD, was deducted from the compensation amount. 34. Case 4. The planned compensation (ID 279) totaled 182,101 AMD. The AP is out of RA and it was not possible to contact her nor during the LARP preparation stage nor at the stage of LARP implementation. According to the ownership certificate and cadastral data there is a garage on the land plot, but actually the land plot is empty and no structure was identified during the DMS. The land plot was leased from the municipality and the leasing agreement had expired in Since it was not possible to contact the AP and actually the land plot was not used by the AP PIU applied to municipality for initiating of cadastral map corrections with the cadaster. However PIU should pay the compensation amount for illegal usage of land (or APs legal representative) if the latest gets in touch with PIU in 2 years after the closure of the Project. 35. Case 5. The planned compensation (ID 281, 282) totaled 72,626,713 AMD, however 130,207,586 AMD was compensated. Due to APs complaint the area of acquired land was increased in order to provide an access, as the access planned initially turned to be unsafe m 2 of legally owned land with compensation amount of 74,408,588 AMD was acquired instead of 1157m 2 with compensation amount of 60,140,860 AMD. A non-residential structure with an area of 231.8m 2 was acquired with compensation amount of 39,585,645 5 AMD which was not included in the LARP. Additional 70,000 AMD was compensated for transportation costs of assets. Also 6,942,000 AMD was compensated for asphalt with an area of 1157m 2 instead of breakstone with compensation of 3,285,000 AMD. The last change was due to the fact that at the stage of initial survey the area was covered with breakstone however before the cut of date the breakstone was covered with asphalt. This was not included in the description protocol as the AP refused to sign any protocol and the initial description protocol was not updated. 36. Case 6. According to the approved LARP the business, which is being run on the land plot described in the paragraph above, was not affected as only part of the territory was affected. However based on the complaint from the owner of the property and the business it turned out that the access to the property will be closed for nearly 3 months. Based on data provided by SRC 6 a compensation amount of 2,074,800 AMD was paid for temporary (3 months) loss of business 37. Case 7. The planned compensation (ID 302) totaled 5,145,757 AMD, however 6,039,945 AMD was compensated. The APs certificate of ownership was without coordinates and the AP applied to the YM with request to provide coordinates. Based on the coordinates provide by the YM the property was reregistered in the SCREC. After re-measurements the area of affected land plot was increased by 10.6m 2 and the compensation for land totaled 2,495,772 AMD instead of 4 This was envisaged in the LARP for Tichina-Babajanyan. See paragraph 193 and Table 8-18 row N ,500 AMD was calculated as replacement cost for 1m 2 of the structure. Total replacement cost for the structure with an area of was calculated 34,422,300 AMD. Additional 15% (5,163,345 AMD) was added to the replacement cost based on requirements of RA legislation. 6 According to data provided by SRC the profit of the AP for 2016 totaled to 10,374,000AMD from which 2,074,800 AMD was paid as a profit tax. Based on this data the amount of compensation for 3 months was calculated: (10,374,000-2,074,800)/12*3=2,074,800AMD 7 P age

13 2,180,904 AMD envisaged in the LARP. In the meantime due to mismeasurements the compensation amount for affected support structure totaled to 1,608,229 AMD instead of 1,214,377 AMD envisaged by the LARP and the compensation for affected shed totaled to 821,376 AMD instead of 635,904 AMD envisaged by the LARP. 38. Case 8. The planned compensation (ID 373) totaled 1,768,713 AMD, however 4,822,213 AMD was compensated. During the DMS the AP had not allowed the DMS team to enter the affected territory. Therefore the DMS and valuation were done according to available information. However after receiving the draft contract/agreement the AP had applied to the PIU with request to redo the DMS and valuation. In result due to changes in measurements 505,300 AMD was paid for the shed instead of 465,000 AMD, 497,600 AMD was paid for the toilet instead of 466,500 AMD, 416,400 AMD was paid for the fences instead of 24,480 AMD, 729,000 AMD was added for improvements, 1,581,180 AMD was added for trees and 280,000 AMD was added as an allowance to severely affected household with loss of more than 10% of agricultural income. 39. Case 9. The planned compensation (ID 376-B-1) totaled 27,288 AMD, however 97,288 AMD was compensated. 70,000 AMD was added to the compensation amount for transportation of movable assets which was not calculated in the LARP by omission. 40. Case 10. The planned compensation (ID 378-B-1) totaled 1,089,728 AMD, however 1,185,478 AMD was compensated. The calculation of compensation was done based on the results of first 3 quarters of 2016 as at the time of LARP preparation there was no available information on the results of the 4 th quarter. The Compensation amount was recalculated based on additional information provided by SRC. The compensation for loss of business was increased by 15,750 AMD. In the meantime 70,000 AMD was added to the compensation amount for transportation of movable assets which was not calculated in the LARP by omission. Planned and actual impacts and compensations/allowances per impact categories and types of allowances are presented in Table2. 8 P age

14 Table2: LARP Tichina-Babajanyan Highway; Impacts and Compensations according to LARP and actual implementation N 1 LARP 6 section, Tichina- Babajanyan, planned Amount Quantity evaluated, AMD LARP 6 section, Tichina- Babajanyan, actual Compensated Quantity Amount, AMD Impacts categories U/M Acquisition of legally entitled own land 2 m 24, ,737,705 24, ,893,966 6,156,261 Acquisition of legally leased 2 lands m ,172, ,172,698 0 Rehabilitation allowance for 3 illegally used lands m ,801,819 34, ,619, ,102 Compensation for residental 4 buildings m ,013,708 3, ,593, ,324 Acquisition of non-residential 5 buildings m ,431,807,718 5, ,471,464,763 39,657,045 6 Acquisition of fences 117,610, ,002, ,920 7 Acquisition of improvements 95,738, ,124,385 4,386,000 8 Compensation of crops 3,378,906 3,378,906 0 Acquisition of seedlings (fruit 9 trees and bushes) tree 806 1,121, ,121,000 0 Acquisition of not yet fruitbearing trees and bushes tree ,263, ,289,500 25,730 Acquisition of fruit bearing tree 11 trees and bushes ,976, ,384,020 1,407,200 Acquisition of timber/wood tree 12 trees 153 1,917, ,920,650 2,750 Acquisition of decorative tree 13 trees ,164, ,310, ,500 Compensation for impact on business 14 business, permanent es 57 36,584, ,090, ,845 Compensation for impact on business 15 business,temporary es 2 110, ,184,800 2,074,800 Compensation for loss of 16 employment person 8 5,585, ,585, Allowance to severely affected households with loss of more than 10% of revenue from agricultural activity Allowance to severely affected households with residential loss Allowance to socially vulnerable households Compensation of one month livelihood expenses for relocated households AH AH AH AH Difference (Actual- Planned) 94 61,842, ,122, , ,500, ,500, ,190, ,190, ,750, ,750,000 0 Compensation of transportation costs for 11,596,250 11,806, ,500 movable assets Total 4,040,863,581 4,096,504,353 55,640, EMA also checked and certifies that the same unit rates have been used in the LARP, Valuation reports and contracts/agreements. 9 P age

15 3 IMPLEMENTATION MODALITIES 3.1 REHABILITATION CONTRACTS CONCLUSION AND DISBURSEMENTS 42. Within the scope of Compliance Report (Compliance Survey) the EMA studied the process of signing of compensation contracts and agreements and transferring the compensation amounts s bank accounts. The contracts/agreements were signed between June 2017 up to January The majority (51.5%) of contracts/agreements were signed in July-August Some transactions required long period, which was conditioned by deficiencies in the documents of APs. Table 3 Intensity of signing of contracts and agreements Period No. of Concluded Contracts/agreements Share June % July % August % September % October % November % December % January % Total % 43. In all the cases the PIU paid compensations and allowances within 15 calendar days from the day of signing of contracts and agreements and filing of corresponding documents to the PIU. 44. The review of payment documents revealed that PIU has followed EMA recommendation and has applied the approach of paying of compensation amounts determined in the contracts/agreements in 2 transactions for all APs 7 ; 85% after signing of the agreement/contract and 15% after submission of the property with the handing act. 45. At the stage of LARP approval by ADB it was agreed that 7 cases; 3 potentially legalizable AHs, 2 low cost residential AHs and 2 vulnerable AHs will be addressed by PIU during LARP implementation. PIU organized a meeting with the APs on 18 July PIU resettlement specialist, LARP implementation team members and EMA lawyer participated in the meeting. Official notices were handed to all APs during the meeting. In addition PIU resettlement specialist informed the APs on the particularities of the notices potentially legalizable AHs ID 269, ID 270, ID 274. It was agreed that the APs will be informed that their land plots are potentially legalizable and PIU will support them during the legalization process if they decide to go through the legalization process. The APs were officially noticed about their right to apply for legalization as their land plots were considered potentially legalizable. They were also informed that they have a time constraint of one month after the receipt of the notice for applying for legalization. In case if the land plots were legalized they would receive compensation as legal owners. However none of the APs applied for legalization of the land plot. See also in depth interviews N 7 and N low cost residential AHs- ID 248, ID 296. Those APs had non legal houses and were able to buy non legal houses with the same conditions. It was agreed with ADB that PIU will support them if they decide to legalize the new houses. The APs were officially noticed that PIU will assist them in the process of legalization of new houses if they apply to PIU with condition that those houses will be legalizable. See in depth interviews N 9 and N See Compliance Report for the LARP for Tichina-Ashtarak, para P age

16 48. 2 vulnerable APs ID 265 and ID 267. It was agreed that PIU will provide logistical support to locate and close on a new residential place with adequate access to infrastructure if they apply to PIU. The APs were officially noticed and it was explained that PIU will provide them assistance if they apply to PIU. However none of the APs applied to PIU for logistical support. EMA conducted an interview with Paytsar Makaryan, (See in depth interview N 11) and revealed that the AP has purchased an apartment for her son and lives with him. The APs son helped her with purchasing of the apartment. The interview with the other AP (ID 267, interview N 12) revealed that the AP has bought an apartment and is also going to buy a land plot. 49. According to the LARP all the APs have 30 days to relocate from the date of delivery of full compensation/allowances and within this time they should manage to dismantle and remove all salvageable material for rebuilding of houses and re-establishment of businesses. 50. Based on safety issues which may emerge during demolishment of the buildings as well as lessons learnt from the LARPs under Tranche 1 when the APs damaged the adjacent buildings while demolishing their own ones the PIU stated in the contracts that the APs are not allowed to demolish the houses by themselves. Instead the AP will be able to take all the salvageable materials after demolishing of the buildings by the contractor. The APs were informed on this during the Public Consultations as well as before signing of the contracts. In addition all the APs have signed statements that they have been notified on this accordingly. 51. PIU will submit the list of the APs to the Contractor and the Contractor should notify by phone the APs about the day of demolishment of the buildings so the APs will be able to take all the salvageable materials. PIU will monitor this and include in the Semi-annual social safeguards monitoring reports. 3.2 IMPLEMENTATION OF LEGALIZATION AND CORRECTION ACTION PLAN cases with involvement of 13 AHs/APs were included in the Legalization and Correction Action Plan LCAP under the LARP for Babajanyan-Tichina highway. Those cases were divided into two main typical groups: 12 cases were related to the legalization of APs/assets and 6 cases were related to the cadastral corrections Legalization issues 53. Typical legalization issues presented in the LARP for Tichina-Babajanyan highway were issues related to (i) documents of APs (3 cases) or their properties (3 cases) and (ii) properties with encumbrance (6 cases). 54. All the legalization issues with documents were resolved at the stage of LARP implementation and the compensation contracts/agreements were signed either by the APs or their representatives and the compensation amounts were transferred s bank accounts. 5 out of 6 cases with encumbrance were resolved, the compensation contracts/agreements with the owners were signed and the compensation amounts were transferred s bank accounts. 1 issue with encumbrance is not resolved yet as the case is in court (see clause 4.3, CaseN1). The court case in not connected with the encumbrance of the property, however it will be possible to solve te issue with encumbrancle only after court s final decision Cadastral correction issues properties with cadastral correction issues were identified at the stage of LARP preparation. In 2 cases there were discrepancies of the land coordinates between the ownership certificate and cadastral map. The properties are neighboring but they belong to different APs. Both cases are not resolved yet as the cases are in court (see clause 4.3, CaseN1 and CaseN2). 8 Without double counting 13 AHs/APs are involved in 18 cases. 1 AH/AP has 2 land plots and for both land plots issues related to juridical documents and issues related to encumbrance. 2 AHs/APs properties were under pledge in the banks and at the same time have cadastral issues. 11 P age

17 The court cases are not connected with the discrepancies of the coordinates, however it will be possible to solve the issues with coordinates only after court s final decision. 56. During LARP preparation 2 cases were identified where the cadastral lot-code of the land plot differs from the lot-code of the ownership certificate. Both issues were resolved at the LARP implementation stage. PIU LARP implementation team assisted the APs in the process of obtaining new ownership certificates with indication of correct lot-codes. The APs signed the contracts/agreements and received the compensation amounts. 57. In 1 case according to the ownership certificate and cadastral data there is a garage on the land plot, but actually the land plot is empty and no structure was identified during the DMS. The land plot was leased from the municipality and the leasing agreement had expired in Since it was not possible to contact the AP nor at the LARP preparation stage nor at the LARP implementation stage and actually the land plot was not used by the AP PIU applied to municipality for initiating of cadastastral map corrections with the cadaster. However PIU should pay the compensation amount for illegal usage of land (or APs legal representative) if the latest gets in touch with PIU. 58. In 1 case according to the data of DMS, ownership certificate and cadastral map, the property was illegal, but the owner insisted that the affected land plot was a part of the land plot owned by her. The APs ownership certificate was old therefore the land coordinates were not mentioned in the certificate. The issue was raised by the AP during the public consultations. The issue was resolved after correction of coordinates of the land plot. The APs property was reregistered in the state cadaster and the AP was compensated accordingly. PIU assisted the AP in the process of correction of coordinates and reregistering of the property. 59. The cases included in the LCAP are presented in detail in Table 4 below. Table 4 List of Cases for Legalization and Cadastral Correction No ID Cadastral Lot- Codes Description of issue Legalization cases Issues related to juridical documents: '"" CJSC Issues related to juridical documents: The AP was not available during the DMS Issues related to juridical documents: The AP was not available during the DMS Solution of the issue The issue is resolved. The APs representative signed the contract and received the compensation. The issue is resolved. The APs representative signed the contract and received the compensation. The issue is resolved. The APs representative signed the contract and 12 P age

18 received the compensation. Issues related to passport: The issue is resolved. The AP signed the The AP was out of RA. contract and received the compensation. Issues related to passport: The issue is resolved. The AP signed the The AP was not available during contract and the DMS received the compensation. Issues related to passport: The issue is resolved. The AP signed the The AP was out of RA. contract and received the compensation. Issues related to properties with The issue is encumbrance: resolved. The AP signed the According to the SCREC the contract and property is under pledge in the received the name of Ե , compensation. Ե Issues related to properties with encumbrance: Right of Pledge of Procredit Bank CJSC N 0618, dated Issues related to properties with encumbrance: According to the SCREC the property is under pledge in the name of Procredit Bank CJSC. Issues related to properties with encumbrance: According to the SCREC the property is under pledge in the name of ARTSAKHBANK CJSC. Issues related to properties with encumbrance: Of the pledge of a Property N 1865, dated , registered on June 22, 2016, AMERIABANK The case is in court The issue is resolved. The AP signed the contract and received the compensation. The issue is resolved. The APs representative signed the contract and received the compensation. The issue is resolved. The AP signed the contract and received the compensation. 13 P age

19 Issues related to properties with encumbrance: Contract of the Pledge N 9625, dated , Pledgee: Converse Bank CJSC There are discrepancies of the land coordinates between the ownership certificate and cadastral map. The affected area can be changed after correction of coordinates. There are discrepancies of the land coordinates between the ownership certificate and cadastral map. The affected area can be changed after correction of coordinates. According to the cadastral map the lot-code of the land plot is , but based on the ownership certificate the lot-code is Obtaining of new ownership certificate with indication of correct lot-code is required. According to the cadastral map the lot-code of the land plot is , but based on the ownership certificate the lot-code is Obtaining of new ownership certificate with indication of correct lot-code is required. According to the ownership certificate there is a structure on the land plot, but actually no structure is identified, the land plot is empty. According to the data of DMS, ownership certificate and cadastral map, the property is illegal, but the owner insists that the affected land plot is a part of the land plot of owned by her. Checking of land coordinates is required. The issue is resolved. The APs representative signed the contract and received the compensation. The case is in court The case is in court The issue is resolved. The AP signed the contract and received the compensation. The issue is resolved. The AP signed the contract and received the compensation. It was not possible to find the AP. The land plot is not used by the AP. The compensation amount will be paid if the AP will be found out. The issue is resolved. The AP signed the contract and received the compensation. 14 P age

20 60. EMA has studied all the cases presented in the LCAP of the LARP for Tichina-Babajanyan highway. All the cases included in the LCAP were resolved except 2 9 cases in court. Resolution of those cases is out of PIU s competency. 3.3 PUBLIC CONSULTATIONS AND INFORMATION DISCLOSURE Public consultations 61. Four public consultations were conducted for affected people living in the area of Tichina- Babajanyan road section. The consultations were conducted at secondary school N174 in Malatia-Sebastia administrative district of Yerevan. All APs were notified by phone about the date and place of the consultations. In addition, announcements were posted in the administrative building of Malatia-Sebastia and were published in the Republic of Armenia daily newspaper and on SUDIP official website. 62. First consultation was held on 14 June 2016 after the GD on Preliminary Study (GD 447- Ն, dated ) entered into force. 25 APs (6 women and 19 men) attended the public consultation. The road design, features of the main phases of the resettlement processes, the team that conducted the DMS and socioeconomic surveys, as well as the procedures involved in the surveys were presented to APs during first stage of consultation. 63. Due to the quantity of APs three public consultations were held on 2-4 November 2016 after GD on Eminent Domain (GD 1027-Ն, dated ) entered into force. In total, 125 APs (29 women and 96 men) participated in the public consultation on EDD. Entitlements Matrix, valuation methodology, DMS and Census/SES were presented s. The Grievance Redress Mechanism was addressed in detail, with particular focus on the role and functions of the Local Focal Point as a way to rise formulate and address APs complaints to the IA during all stages of the Project. 64. Information leaflet with the main phases of land acquisition and resettlement procedures and the hard copies of both Government decrees (Preliminary and EDD) were distributed to all APs during the public consultations. The Project Information Pamphlet, where the Project description, the Entitlement Matrix, grievance redress mechanism, entitlements and compensations, as well as answers to frequently asked questions were presented was also distributed to the attendants of the public consultations. 65. Project Director, Resettlement, PR and other experts of the PIU, representatives of the DESC, the valuation company participated in the public consultations. Representative of EMA participated in the public consultations held on 2-4 November All the public hearing events passed in a format of active discussion, questions and answers. The PIU and related consultants (DESC) did their best explaining the LARP preparation and implementation process, providing information materials, answering the APs questions, etc. 67. EMA studied all the minutes of meetings of the public consultations as well as questions raised by the APs and answers provided by the PIU and consultants representatives. EMA confirms proper organization and implementation of the Public Consultations based on the requirements of the LARF. 9 Rows N8 and N14 in Table 3 refer to the same court case.. 10 A contract with EMA was signed on 11 August 2016, therefore EMA representative participated in the public consultation held after August EMA conclusions on public consultations held before August 2016 are based on available documents provided by PIU. 15 P age

21 3.3.2 Information disclosure 68. The GD on Eminent Domain was published in the newsletter ''Republic of Armenia'' on 30 October An announcement on the GD on Eminent domain was posted also on SUDIP s website. On 27 October 2016 the owners of the properties included in the GD on Eminent Domain were officially notified. Maps indicating affected and non-affected parts of the properties were presented s to be sure that the owners will be able to use the opportunity to present request on the acquisition of non-affected part of the property within two months after the GoA decree on acknowledging the exceptional prioritized public interest entered into force. The Description protocols were submitted to AP's in December 2016 and January Draft contracts/agreements and the Project Information Pamphlet were submitted s in June- July The LARP for Babajanyan-Tichina was disclosed on SUDIP website after approval by the Government and ADB. 70. EMA studied all the information disclosure documents and activities performed by PIU and confirms its proper organization based on the requirements of the LARF and RA legislation. 4 COMPLAINTS AND GRIEVANCES 4.1 GRIEVANCE REDRESS MECHANISM 71. A 2 level GRM was developed in the LARP for Babajanyan-Tichina. The GRM was presented to APs during public consultations and disseminated through SUDIP website. Several parties are involved in the GRM such as the PIU, Grievance Review Group (GRG) and YM. Picture 2 below represents the Grievance resolution process scheme. 72. Complaints and grievances are being addressed through the following steps and actions: Step The PIU accepts the complaints in the first instance and within a period of maximum 30 days from the day of receiving the grievance PIU officially answers the AP. 74. If the AP is not satisfied with the response or PIU responsible staff needs additional capacity to response the APs' grievance, the Grievance Review Group (GRG) can be formulated. The following composition of the GRG is proposed by PIU in the LARP: Members (a) Representative of PIU (b) Representative of safeguards team (PIU) (c) Representative of Local Government, as relevant (d) Certified technical expert, as relevant (e) Representative of Engineer/Contractor, as relevant (f) Representative of the APs (g) Independent party (for example NGO) Position Chairperson Member Member Member Member Member Observer 75. During the grievance review process by GRG, several experts can be involved such as valuation expert, agronomist, measurement specialist, design engineer etc. Independent party (for example NGO representative) can be invited upon request of AP.A settlement will be made within 30 days. Step 2 16 P age

22 76. If the AP does not agree with the PIU s answer he/she should address their grievance to the YM. YM must respond to the complaint within 30days. 77. Regardless of the set grievance mechanism and procedures, APs will have the right to submit their cases to a court of law at any point in time of the grievance redress process. A template for recording grievance has been developed and is available s when they lodge the complaint. Picture2: Grievance resolution process scheme AP has a complain AP lodges grievance to PIU field or PIU responses within30 AP does not accept PIU AP lodges 2 nd grievance for GRG PIU/GRG responses within 30 AP does not accept the AP lodges 3rd grievance YM respons es AP does not accept YM AP applies to the court Court decision 4.2 COMPLAINTS AND GRIEVANCES UNDER THE LARP FOR BABAJANYAN-TICHINA HIGHWAY 78. To assess the grievance redress process, the EMA requested the copies of submitted Complaints from the PIU as well as PIU s responses. 42 applications or complaints have been filed to the PIU from APs. All 42 cases were properly recorded in the grievance register books and processed accordingly. The day of the complaint submission as well as the day of PIU s responses were recorded as well. PIU responded to the submitted complaints and inquiries in written form within defined dates, except one case (Noy Trans) when PIU answered s complain 4 months after receiving the APs complain. However this was due to negotiations with the AP and EMA considers this delay reasonable. The review of the process of handling of the grievances revealed that PIU followed EMA recommendation 12 and informed the APs of the GRG opportunities in the answers s complaints. In all answers to the complaints received after approval of the Compliance report for Tichina-Ashtarak the APs were informed about the GRG opportunities. The review of the APs complaints and PIUs replies showed up that only 1 out of APs requested formulation of GRG as stipulated in the LARP GRM. The GRG rejected the AP s request. The GRG was formulated from the representatives of PIU, Measurements and valuation company and EMA. The AP refused to participate in the GRG meeting. 79. The EMA studied the contents, character and relevance of those complaints. Main complaints were due to In 12 cases the APs complaints were due to disagreement with 11 5 APs applied twice with different issues. 1 AP applied 3 times with 2 different issues. 2 APs applied twice with the same issue. 12 See Compliance report for the LARP for Tichina-Ashtarak para Only in 17 cases the APs were informed of the opportunity to request formulation of GRG. 17 P age