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          Tbilisi-Senaki-Leselidze Auto
          Road Agaiani-Igoeti E43 – E55

      Resettlement Action Plan
Prepared by Sub-contractor of BONIFICA, Tbilisi Title Company

        Ministry of Economic Development of Georgia

              Department of Roads of Georgia

                          June 2007

                                             Page 1 of 29
                                            Resettlement Action Plan

C  Ontents


1. Preface ..................................................................................................................... 3

2. Scope of Land Acquisition ..................................................................................... 4

3. Project Affected People ........................................................................................ 5

4. Legal Framework .................................................................................................... 7

5. Gaps between the active legislation of Georgian and measures to fill the

6. Compensation Principles and Rehabilitation Measures…………………………10

7. The Scope of Project Impact and Valuation Methdology……............................11

8. Implementation Procedures……...…………………………....................................16

9. Public Meetings, Participation and Grievance Redress

10. Entitlement Matrix...............................................................................................21

11. Households Socio-Demography data...............................................................22

12. Annexes ..............................................................................................................25

13. Budget ................................................................................................................31

                                                                                                                  Page 2 of 29
                        Resettlement Action Plan


1   The Resettlement Action Plan has been prepared by the Road Department
    of Ministry of Economic Development of Georgia in accordance to the Re-
    settlement Policy Framework (RPF), active legislation of Georgia and
    World Bank involuntary resettlement policy (OP 4.12). The assignment
    covers Tbilisi-Senaki-Leselidze auto road section Agaiani-Igoeti E43 and

    The goal of the hereby document – Resettlement Action Plan – is to in de-
    tail describe all the actions and activities to be undertaken by the RDMED
    in order to follow logical and fair approach in the process of implementing
    involuntary resettlement when identifying the compensation measures and
    entitlements for land expropriation and reimbursement of income and asset
    losses. Aside to that, due information shall be provided to all responsible
    institutions involved in the process, representatives of local government
    and the most important local population that shall experience direct impact
    of the given project.

    The individuals that lose the means of livelihoods and income sources
    (Project Affected Persons: PAP) shall receive compensation, either by cash
    or in-kind, to at least restore their pre-project level of livelihood. During
    the project implementation process, specific mitigation measures shall be
    employed to minimize temporary worsening of economical conditions of
    the project affected people.

                                                                      Page 3 of 29
       2. Scope of Land Acquisition

           The given road section geographically is located on Agaiani-Igoeti section and ac-
           cording to the administrative-territorial division belongs to Kaspi rayon. In total
           twenty-three PAP shall be impacted by the Road rehabilitation activities. These
           land parcels are located on the territories of the villages of Agaiani and Okami.

    The total number of the land parcels located within the Road Impact area equals to twenty-
    three. Out of these twenty-three only 2 land parcels are non-agricultural. The rest 21 land
    parcels are agricultural. Among them only one land parcel is under State ownership and
    leased to the physical person. The rest twenty land parcels are privately owned and used by
    local households.

      The survey of the land parcels located within the Road Project affected area revealed
      four cases when the landowners occupy and use larger size of land than it was legally al-
      located to them during the land privatization process. The excess share of the land par-
      cel that will be within the new ROW is owned by the state. Since the excess share of
      the land is occupied by the local households without title, no cash compensation will be
      provided as land replacement cost, although the PAP shall receive the reimbursement
      for the loss of assets and income loss.

      The project road is carefully designed so the impact that may arise from the road con-
      struction on the local population is minimized, and the future utilization and productivi-
      ty of local assets will not be deteriorated.

                                                                                    Page 4 of 29
     3. Project Affected Persons

    During the development of the Resettlement Action Plan, as a result of the special survey
    the socio, economic and demographic data have been collected for the Project Affected
    Persons. The survey revealed that the majority of the households possess agricultural land
    parcels. However, not all of the PAP have the complete package of documents to be rec-
    ognized as legal owners under the Georgian legislation. The demarcation revealed that
    some of the landowners are deceased and their land parcels had been inherited by their
    heirs without proper registration.

     A significant number of PAP is pensioners. Some of their younger family members are
     employed. Only several households deal with cattle breeding. Almost every household
     cultivates land and feeds themselves and their family members. They grow various veg-
     etables (onion, garlic, tomato, potato, corn and bean) and share the crops with their
     children who live separately. Some households sell a large share of annual crops such as
     beans, corn and grapes at the local market or to wholesalers in Tbilisi.

                                                                                  Page 5 of 29
Most of the houses were built in 1955-1965. These are two-storied building with 4 to 6
rooms. However, the population still prefers to live on the ground floor. This is conve-
nient to local households as in winter the wood stove placed in one room is the most op-
timum option to warm the shelter. People use the same stove for cooking as well.

On two non-agricultural land parcels on the left side of the project road exist two com-
mercial entities that will be affected by road construction activities. These are (i) Res-
taurant TAVKVERI, and (ii) Petrol station owned by IBERCOMPANY.

The Restaurant is privately owned by SAVANE XXI which also owns the land on
which the restaurant is built. The restaurant is leased to an individual entrepreneur who
runs the business.

                                                                               Page 6 of 29
        The petrol station is privately owned and managed by IBERKOMPANI LTD which also
        owns the land.


        4. Legal Framework
        In Georgia the legislative acts given below regulate the issues related to legal ownership
        rights to land and real property and the expropriation of land for public needs:
        The Constitution of Georgia, August 24, 1995
        The Law of Georgia on the Rules for Expropriation of Ownership for Necessary Public
        Need, July 23, 1999
        The Law of Georgia on Ownership Rights to Agricultural Land, March 22, 1996

                                                                                      Page 7 of 29
    The Law of Georgia on Registration Ownership Rights to Immovable Property, De-
    cember 28, 2005
    The Civil Code of Georgia, June 26, 1997
    The Civil Procedural Code of Georgia, November 14, 1997
    The Law of Georgia on Privatization of State-owned Agricultural Land, July 8, 2005

    These legislative acts create the set of procedures that allow the Road Department of
    Georgia to obtain ownership right towards the privately owned land parcels and corres-
    pondingly the right of way.

    The Law on acquiring ownership rights that defines the process of expropriation re-
    quires implementation of several steps.
    a. Issuance of Presidential decree;
    b. Inventorization of all the property subject to expropriation;
    c. Disclosure of information on expropriation;
    d. Providing the information on expropriation to landowners;
    e. Submission of the Application to the Court and Court Decision;
    f. Expropriation;
    g. Court proceedings in case any disputes are raised in regard with the property value
    (amount of compensation).

    A. As a result of issuance of Presidential Decree the right of expropriation is granted
    to a company or a legal person of public law. The Presidential Decree is issued under
    the Article 21 of the Constitution of Georgia. The Presidential Decree defines the inevi-
    tability of expropriation of a land parcel for immediate public needs and the subject (le-
    gal or private person) that may be granted the right of expropriation.

    B. After issuance of Presidential Decree inventorization and evaluation of all the
    property subject to expropriation shall be conducted

    C. The information on the expropriation is published at national and local news-
    The information shall contain the scopes of the project, and brief description of the terri-
    tory and property that may be expropriated.

    D. After the information on expropriation is published, the corresponding package
    of documents shall be delivered to land owners.
    In particular, the document of property valuation by the independent expert; offer on the
    purchase of the property subject to expropriation; and the amount of compensation that
    should be handed over to land owners will be delivered.

    E. The Application shall be submitted to the Court and property expropriation under-
    taken after the above described activities are implemented. The Law of Georgia on the
    Rule of Property Expropriation for Necessary Public Needs, article 5 defines that the
    District (City) Court will finally assign the right of expropriator. The Application on
    expropriation shall be submitted to the District (City) Court. The Court shall make a fi-
    nal decision on the issuance the right of expropriator. The application submitted to the
    Court shall state the following:
    1. Name of the District (City) Court;
    2. Name and legal address of the of applicant;

                                                                                   Page 8 of 29
3. Name, address of the Applicant’s representative if the application is submitted by a
4. The request of the applicant;
5. The description of the circumstances the applicant refers to;
6. The proofs verifying these circumstances;
7. The list of the documents attached to the Application.

The application for the right of expropriation shall contain the following data: detail de-
scription of the property that needs to be expropriated, the Extract from the Public Reg-
ister verifying ownership right, documents related to the project to be implemented for
necessary public needs and the Decision of the District (City) Court on grating of the
right of expropriation.

F. Court Proceeding due to the property value
In case the expropriator and the property owner fail to come into agreement regarding
the property market value and amount of compensation, either party has the right to ap-
ply to the same rayon court where the land parcel is located for dispute resolution in ac-
cordance to the Civil Procedural Code of Georgia.

The Court will assign an independent expert that shall conduct property appraisal and
submit the report on property market value within the defined time. On basis of the re-
port by the independent expert and the proofs provided by both parties, the court will
make the final decision regarding the amount of compensation of the property subject to

The expropriator is responsible to the reimbursement of the costs incurred by both par-
ties including the costs for court proceedings, such as court costs in case of disputes and
the costs for the services for appraisal of the property to be expropriated.

5. Gaps between active Georgian legislation and measures to
fill the gaps

As stated in the Resettlement Policy Framework (RPF), most World Bank resettlement
policies are adequately addressed in Georgian law. One major gap is that under Geor-
gian law, those land owners who fail to have their land registered at the Public Registry

                                                                              Page 9 of 29
    are not eligible for compensation. Also, Georgian legislation does not require specific
    planning process and planning instruments that are specified in OP 4.12. Similarly, no
    specific measures for public consultation are provided under the Georgian law.

5   With view to such gaps, RPF sets forth several measures to fill the gaps, such as:
     Keep affected people and communities fully informed about the project, the process
    that will be followed to acquire and compensate for land, and their related rights and
    avenues for redress.
     PAP will be notified of the project implementation schedule and consulted regarding
    the principles of land acquisition and loss of/ damage to assets.
     Develop a fair and accessible grievance redress mechanism.
     All PAP will receive compensation or support of various kinds, without regard to
    the status of land registration and ownership in compliance with the active legislation of
    Georgia and the World Bank safeguard policy.

    This RAP sets forth specific measures to fill the gaps based on the principles laid out in
    the RPF.

    6. Compensation Principles and Rehabilitation Measures
    The following principles are used to develop the methodology to evaluate lost assets
    and properties.

    1. The given project impact does not extend on residential houses; therefore, physical
    resettlement of local population is not expected.

                                                                                Page 10 of 29
    2. Persons shall receive cash compensation for the share of the land parcel subject to
    expropriation due to road construction. Land replacement cost has been determined ac-
    cording to the market price.

7   3. Cash compensation shall be issued for the loss of annual income. Loss of annual
    crops and vegetables has been calculated based on the average market price of the yield
    to be lost due to road constriction. Cash compensation amount is determined according
    to the data of the last five years, in particular considering the Data of the Department of
    Statistics on average market prices for the years 2000-2006. Compensation shall be paid
    to cover loss of income over one year.

    4. Compensation for the loss of assets:

    A. cash compensation shall be paid to the fruit bearing perennials to be logged down
    due to road construction. The amount of compensation is compensated according to the
    method described in the Chapter 7 on valuation methodology;

    B. cash compensation shall not be issued for the perennials not bearing fruits. However,
    the owners shall have the right to dispose the timber at their discretion after construction
    company ensures to log the trees down and deliver the timber to the landowner’s resi-
    dential area at company costs.

    5. Rehabilitation measures:

    5.1. Where the landowner and/or users possess structure, building or fence that will be
    removed, such structure, buildings, fences shall be moved to other location or restored
    at the costs of the RDMED, or cash compensation shall be provided that is sufficient to
    restore the structure.

    5.2. The construction company is responsible to arrange temporary access roads, so that
    the loss of income for local population due to temporary lack of access road is mini-
    mized. In case the population is not able to use their land parcels and this lasts for more
    than one year, then the construction company shall reimburse the loss of income.

    6. Actual removal of the specific structure and/or physical acquisition of the land shall
    be undertaken after the completion of issuance of compensations for lost assets.
    7. All project affected people (PAP) will be compensated under the active Georgian leg-
    islation and World Bank safeguard policies (OP 4.12).

    7. The scope of project impact and valuation methodology
    The area that will be impacted by the Tbilisi-Senaki-Leselidze motor road construction
    include privately owned land and state-owned land leased to an private individual and
    extend over the 43 -55 KM section of the road between Agaiani and Igoeti.

                                                                                  Page 11 of 29
The detailed surveys and inventorization allowed determining the types and level of
project impact over the land parcels across the existing road. The calculation of com-
pensation has been conducted based on the Valuation Methodology and the identified
level and types of losses. The Valuation Methodology has been prepared according to
the active legislation of Georgia and in compliance with the World Bank Involuntary
Resettlement Policy Framework (OP 4.12).

Within the given Project the following types of project impact have been identified:

1.   Loss of annual income
2.   Loss of Assets – removal of buildings, structures and perennial crops to be logged
     down due to road rehabilitation activities
3.   Loss of land i.e. involuntary acquisition of land parcel
4.   Temporary loss of income caused by temporary loss of access.

Characteristic of the types of losses and principals of compensation

Compensation for loss of annual income – yield from annual crops lost due to road
Some of the land parcels under project impact are cultivated. The owners have already
started the agricultural activities of the current season, and they may not be able to harv-
est the yield they planted prior to the start of road construction activities. In such case
the compensation shall be paid for the loss of annual income. The amount of compensa-
tion shall be determined based on the market prices of the lost crop. As the source of the
information on the market prices, data of the Department of Statistics for average an-
nual consumer prices for the years of 2000-2006 have been utilized. (Please see Table 1
and Table 2)

Loss of assets: Structures and perennials

Buildings and structures to be removed
The loss of or damage to structure and buildings is also expected due to road construc-
tion. Within the scope of the project impact area there are two commercial objects lo-
cated across the existing road: the restaurant TAVKVERI that is owned by the legal
person SAVANE XXI, Ltd and petrol station LUCOIL that is owned by the legal person
IBERCOMPANY Ltd. These two commercial objects are located on the land parcels
registered as non-agricultural.

In order to implement road rehabilitation activities, the acquisition of some part of the
land parcel is required. The impact shall not extend to the main buildings. However, as
a result of the detailed field study carried out by the consultant, it is found that some
structures, such as WC, underground oil reservoirs, and water and oil pipes, will need to
be demolished if local roads are build in 2008 as planed under the preliminary design of
the road. It has been decided that the alignment proposed under the preliminary design
will be re-routed to avoid such demolition of structure.

Compensation for the loss of perennial fruit trees
This type of loss includes the compensation for perennial fruit trees that shall be logged
down due to road construction activities.
The calculation of compensation is based on the following formula:

                                                                              Page 12 of 29
Step 1

Cost to purchase one seedling of the respective fruit tree
X (multiplied by)
Number of seedlings to be purchased (3GEL/ seedling)
= (equals to)
Cost to purchase new seedlings (A)

Step 2
Annual harvest from a fruit tree (in kg)
X (multiplied by)
Market price of the fruit (1 kg/GEL)
    = (equals to)
Market Value of Annual Income

Step 3
Market Value of Annual Income
X (multiplied by)
The number of years required to achieve the same productivity
= (equals to)
Income lost during when new a seedling does not produce fruits (B)

Step 4
(B) X the number of seedlings = Total amount of income loss before the seedlings reach
maturity age (C)

Step 5
(A) +(C) = The replacement cost of lost fruit tree

Based on this formula the amount of compensation is calculated for each fruit bearing
perennial that shall be logged due to road construction. The data on average market
prices on fruits, annual yield and maturity years of perennial fruit trees are presented in
the table attached to the documents. (Please, see Table 3). These materials have been
prepared by the Doctor of Agricultural Science, full member of Academy of Agricultur-
al Science of Georgian and Russian Federation, laureate of State Prize of Georgia. Mr.
Gogotur Agladze. Source: Monograph on Fruit-growing in Georgia; Volume III (1973)
and Volume IV (1978) the group of authors; edited by Academician N. Khomezurashvi-

The example below describes the methodology of calculating the amount of cash
compensation for the fruit bearing perennials that need to be logged down due to
road construction activities.

There are five standing peach trees in their full productivity age on the part of the land
parcel to be acquired due to road construction. These five peach trees need to be logged
down and cash compensation be provided.

The compensation amount shall be calculated according to the following formula given

                                                                             Page 13 of 29
The full productivity age of a peach tree starts from 6-7 years. Annual yield capacity per
one tree equals to 40-50 kg. Average market price per 1 kg peach is 1.70 GEL. Market
research proved that a three-years-old seedling can be purchased for 2-3 GEL at the lo-
cal market. The owner shall receive the additional amount to purchase the seedlings.
That means that every PAP shall receive extra 3 GEL /per each fruit bearing tree cut
down as a cost to purchase a new seedling.

In order to reach full productivity age, a 3 years peach tree seedling will need extra 4
Therefore, instead of seven years it will require only 4 years to reach the full productivi-
ty age.

According to the formula given above the total amount of compensation for fruit bear-
ing perennials shall be calculated according to the following formula:

Step 1
Total cost to purchase 5 seedlings will be equal to:
3GEL X 5 seedling= 15 GEL

Step 2
Annual income loss per one fruit tree will be equal to:
40 kg X 1.70 GEL = 68 GEL

Step 3
The lost income before a seedling starts to produce fruits will be equal to
68 GEL X 4 years = 272 GEL

Step 4
The total lost income before seedlings start to produce fruits will be equal to
272 GEL X 5 seedlings = 1360GEL

Step 5
The total amount of compensation due:
15 GEL + 1360 GEL = 1375 GEL

The total compensation amount for these five peach trees shall equal to 1360 plus 15
GEL for purchase of five seedlings to replace the five logged down peach trees equals to
1375 GEL.
The amount for compensation for loss of fruit perennials has been calculated based on
this approach efficient in timing and costs.

Loss of land i.e. involuntary acquisition of the part of the land parcel

Cash Compensation for permanent loss of land within the project affected area had been
calculated based on the market prices on land. The market price on land is defined
based on the internationally proven method – Sales Comparative Approach. This me-
thod is widely used as international practice and uses comparative analyses of the prices
of land parcels sold and/or listed for sales.

                                                                              Page 14 of 29
During the research of specific market segments, several specific factors have been re-
vealed that required close consideration. In particular, pursuant to the Order dated as of
January 9, 2006, Road Department of the Ministry of Economic Development of Geor-
gia, the government has stopped issuing the construction permits across the road, and
prohibited new registration of transactions on real property at the Public Register. As a
result, real property market at the given market sub-segment is less active than under
normal condition.

It is quite characteristic of local communities that the sales transactions are undertaken
only on a verbal agreement and the legal side of the transaction are neglected. This
causes the scarcity of official information on sales prices of actually undertaken sales
transactions to land.

Considering the described circumstances, it was required to extend the geographic area
of research. As the source of information on similar land parcels, public announcements
available on newspaper, and informal conversation with individuals interested in sales
of their properties and with the individuals that recently purchased agricultural land par-
cels are utilized.

The research clearly showed that land parcels that may be utilized as leisure (to build
summer house) are more expensive than those land parcels that are used for agricultural

Aside to that, it is well known in real property practice that the sales price suggested by
the individual interested in sales of their property as a rule exceeds for 15-25% the
amount being actually paid. However, no PAP under the project can be considered to be
a volunteer owner-seller.

Agricultural land parcels

Most land parcels affected by road project are similar in their characteristic features
which allow using common parameters in determining market price. Among twenty-
three land parcels, twenty-one are of agricultural designation. The land parcels that will
be acquired are located over 12 kilometer of the project road. Their common characte-
ristic features are soil productivity, location and designation.

Therefore, the following parameters have been selected for comparison:
1) size of the land parcel to be acquired
2) sales price suggested by the owner
3) price per 1 square meter
4) location
5) access to road
6) close location to irrigation channel

Through the adjustment of the information collected for these parameters, the approx-
imate market price range has been determined.

Table provided under the Annex 4 is prepared based on the Market Price Comparative
Analyses method. Under the first column “comparables”, those general parameters that
are applicable to all twenty-one project impacted land parcels are determined. The sec-

                                                                              Page 15 of 29
tion with the general title “the land parcels listed for sales” provides the characteristics
of seven land parcels selected for comparison.

The land parcels under the No.2, 4 and 6 are not comparable with the land parcels af-
fected by the project. Land parcel No. 2 has not been cultivated for a long time; the
land parcel is far from the main road and settlement area and is not irrigated. The land
parcels No. 4 and 6, although they are similar to project affected plots in that they are ir-
rigated and located close to main road and settlement areas, they are used as vineyards.
The characteristic features of the remaining four land parcels closely match the land
parcels located within the Road Project impacted area.

The price range is as follows:
No. 1 – 3.00 GEL/1 sq/.m
No. 3 – 4.00 GEL/1 sq/.m
No. 5 – 2.28 GEL/1 sq/.m
             No. 7 – 3.20 GEL/1 sq/.m

Average of these figures is 3.12 GEL/sq.m. Considering the average price range of
these land parcels and the general difference between offered price and sales prices, it
has been determined to set 3 GEL / square meter of agricultural land, as land replace-
ment cost for permanent loss of land.

Non-agricultural land
The market price of non-agricultural land parcels where petrol station and restaurant op-
erate is significantly higher than that of agricultural land. This is caused by their desig-
nation and category as non-agricultural land. There are specific procedures that are re-
quired to be undertaken to change the designation of a land parcel from agricultural to
non-agricultural and the fees shall to be paid that equals to several thousand GEL per

Tbilisi Title Company conducted some market research utilizing the same sources of in-
formation and methods. As a result of the research Tbilisi Title Company expert sug-
gested the sales price range varying between 8-12 GEL/square meter for non-
agricultural land in the given market segment.

Temporary loss of income due to lack of access road

The construction of project road will cause temporary loss or restriction of access to the
two commercial entities that exist along the project road. The contractor will build
temporary access road to allow access to such commercial entities from the motorway.
Where alternative access such as local roads does not exist, the contractor will also in-
stall temporary access road during construction to ensure mobility of local people who
farm the land located or graze domestic animals at the other side of the road. RDMED
will monitor the installation of access road.

                                                                                Page 16 of 29
       8. Implementation Procedures

       A. Identification of landowners of the land parcels located within the East-West

8      Magistral Road Rehabilitation Project

       In order for RDMED to acquire the ownership to land parcels through legally valid
       manner, a field survey needs to be carried out to determine official (legal) landowners
       and the location of their land parcels, and all documents to legally establish the owner-
       ship needs to be collected. This is because:

    o As the majority of land parcels - within new road construction corridor – are classified
      as agricultural land, they do not have corresponding addresses registered at the local
      Public Registers. This is the rule established for processing the registration of ownership
      rights to agricultural land parcels in rural areas.
    o The quality survey maps prepared by the licensed surveyor still required to be checked
      and re-surveyed on site to determine the exact locations and boundaries of land parcels.
    o Updated list of land owners also proved not to be available at the local Public Register.
    o Land owners possess legal documents that verify their land ownership but they are not
      sufficient to prove their land ownership under the Georgian legislation, since Registra-
      tion Cards and Cadastral Maps are not adequately recorded and kept at the Public Regis-
      ter of Kaspi Rayon.

       Tbilisi Title Company team visited the site and conducted the field survey to demarcate
       land parcels. The landowners, the owners of the adjacent land parcels, official repre-
       sentatives of the local self government and the Survey Company participated in the field
       survey. Each landowner pointed the location and boundaries of the land parcels that was
       endorsed by the owner of the adjacent land parcel and witnessed by official representa-
       tive of the local municipality. The land parcels were then surveyed after the boundaries
       had been established. The survey was undertaken by a licensed company, ALIGATOR.

       In parallel with determination of the land parcels and their owners, the Demarcation
       Acts have been developed on site. The Demarcation Acts have been designed by Tbilisi
       Title Company and utilized in the process of onsite demarcation. The sample of the
       Demarcation Act is attached to the hereby RAP under the Section Annexes. These Acts
       have been signed by the landowner, the owners of the adjacent land parcels and the rep-
       resentative of the local self-government (Municipality Rstmunebuli). The sample of the
       Demarcation Act is provided under the Section Annexes. The new Cadastral Maps have
       been prepared afterwards. The new and existing cadastral maps have been compared
       and checked.

       Demarcation Acts together with the Cadastral Map served as the basic documents for
       fixing the land parcel within UTM Coordinate system. Further, the demarcated land
       parcels on the basis of these Cadastral Maps are being registered at the Registry Office
       of Kaspi rayon Public Register.

       B. Census and Inventorization

       After the land parcels and their owners have been determined and the final list of the
       Project Affected People (PAP) reviewed and fulfilled the number of Project Affected
       People and land parcels located within the Project Affected have also been determined.

                                                                                   Page 17 of 29
      In the process of inventorization, land parcels and real property (structure-building; pe-
      rennials) attached to them have been recorded and inventoried, and the market value of
      these assets have been determined. The list of assets that will be affected is attached to
      the RAP.

      C. Initial registration of ownership rights into the Public Register

      Identification of land owners and determination of boundaries enable the registration of
      land parcels and the names of their owners at the Public Register, which is necessary to
      undertake the purchase and expropriation of land parcels as per the Law of Georgia on
      the Rules for Expropriation of Ownership for Necessary Public Need, July 23, 1999
      (#2349-rs) and the Law of Georgia on Registration of Ownership Rights to Immovable
      Property (#2635-rs), December 28, 2005). According to the laws, ownership right is de-
      clared legally valid only after it is registered at the Public Register, or the sales-purchase
      agreement is not legally valid under active legislation. Thus all the rights identified un-
      der the Law on Registration of Ownership Rights to Immovable items, such as below,
      are subject to registration:

      A. Ownership rights acquired to immovable items through purchase, exchange, be-
      queath (giving as a gift), contract-based, identification of ownership rights, privatiza-
      tion, as well as obtaining ownership rights registered at the Public Register.

      B. Right to build, usufruct, mortgage and guarantee rights, also the rights to rent or lease
      immovable item created based on the notarized agreement.

      As a result of demarcation, landowners1 of each land parcel have been determined. The
      landowners, however, must then undertake initial registration at the Public Register to
      stand as legally valid owners. Land parcels and the names of their owners will be regis-
      tered at the Public Register based on the signed Application. At the same time the Road
      Department of Georgia will eliminate the restrictions being in force due to the Letter no.
      2/23 dated January 9, 2006 against the persons identified as the Project Affected Per-

      The representative of Tbilisi Title Company collected copies of the documents and the
      Identification Cards of the PAP that should be submitted to the Public Register to regis-
      ter their land ownership. The originals of these documents are held by the landowners.
      The landowners will immediately undertake the initial registration of ownership at the
      Public Register once the restriction on land transaction is lifted.

   The following documents should be submitted to the Public Register for initial registra-
1. Documents that verify ownership rights: Receive-Delivery Act; or Landowners’ List;
   or Tax payers’ List; or Land (Real Property) Ownership Certificate (original that may be
   kept at the village Sakrebulo, Rayon Gamgeoba or already issued to the landowner).
2. Land parcel Demarcation Act, verified with the signatures of the representatives of
   the local government, which determines the location of the land parcel and the name of
   the owner of the adjacent land parcels.
3. Survey Map in UTM coordinate system prepared on the basis of the corresponding
   land parcel Demarcation Act

    See the list of the landowners in the Table No. 1

                                                                                      Page 18 of 29
4. Original and a copy of the Landowner’s Identification Card

   In case a landowner is deceased, then the initial registration will be conducted on the
   name of deceased person in accordance to the rules described above and afterwards the
   measures necessary for inheritance shall be undertaken. The inheritance of properties
   will be conducted pursuant to the Article 1323 of the Civil Code of Georgia. For in-
   stance, the Komli (family) owns a piece of land within the project impact areas, but the
   head of the family, under whose name the land has been registered, has been deceased.
   The land will be first registered under the name of the new head of the Komli (family).
   The following documents must be submitted to the Public register for conducting the

1. Application;
2. Receive-Delivery Act; or Land Distribution List; or Tax List active in the registration
   period approved by the self-government (government) bodies for usage the land for
   agricultural means; or Land Distribution List without graphical approval of the land al-
3. Statement or Extract from the Komli records on the contents of the members of Komli;
4. In case any member of Komli is deceased, the document verifying this fact;
5. Cadastral/Inventory sketch of the land parcel and the structure-building;
6. Copy of the Identification Card.

   After the procedure for inheritance is completed, payment of compensation will be con-
   ducted as others.

   D. Valuation Methodology and calculation of Compensation Amount

   The size and scale of the properties that will be expropriated and the assets that will be
   lost are established through the inventorization, and the amount of compensation that
   the RDMED will offer to PAP has been calculated using a valuation methodology de-
   scribed in Section 7 of the RAP.

   The exact amount of compensation payable to respective PAP is determined based on
   the negotiation between the RDMED and PAP, and it will be entered into the sales-
   purchase agreements.

   E. Expropriation/ compensation

   If negotiation fails, RDMED will enter into the second phase of land acquisition, which
   is land expropriation. The Constitution of Georgia establishes the right to involuntary
   expropriation of property for public needs in the process of magistral motor road con-
   struction. The process of expropriation will be implemented only under the Decree of
   the President of Georgia and appropriate Court level. Expropriation can be undertaken
   only after the compensation that is fair and equal to the market value is paid to the rele-
   vant land owners. The State of Georgia has the Constitutional right to take away any
   property through expropriation and payment of fair compensation in return (Article 21).

   The Law of Georgia on the Rules for Expropriation of Ownership for Necessary Public
   Need (July 23, 1999) defines the procedures, obligations and the rules of implementa-
   tion of expropriation. The permit on property expropriation is issued by the District
   (City) Court Decision on the basis of the Presidential Decree.

                                                                                Page 19 of 29
The project shall resort to property expropriation only in exceptional cases as the last
resort: (i) when negotiation over the purchase price of land and other project affected
properties fails; and (ii) re-alignment of the road is impossible. The mechanisms of ex-
propriation shall be utilized in case civil works must start immediately. In such cases,
the compensation amount of this landowner shall be deposited in an escrow account and
saved at the bank account, which will be handed over to the land owner when the court
mediates the case and has determined the amount to be paid.

Processing Sale-purchase Agreements
Ownership right to the land parcel shall be acquired through processing Sales-
purchase agreements. The Sales – purchase Agreement must be notarized or approved
by the authorized representative of the Public Register. The sales-purchase agreement is
signed by the Buyer (RDEMD) and an owner-seller. The Agreement shall state the exact
amount that the buyer shall pay to the seller and the terms and conditions for the pay-
ment of compensation.

Registration of transaction at the Public Register
The RDMED will register the sales – purchase agreement at the Public Register after it
is signed by the parties. Notary fees and registration costs will be covered by the
RDMED as the buyer of the land. After the registration at the Public register, the trans-
fer of the ownership rights is considered as accomplished.

Throughout the process, the RDMED, as the agency to implement the project, will as-
sume the overall responsibility to ensure that the land acquisition process will comply
with the active Georgian legislation and the World Bank Involuntary Resettlement Poli-
cy (OP 4.12).

                                                                            Page 20 of 29
    9. Public Consultations, participation and Grievance Redress Me-

9   The staff members of Tbilisi Title Company and Bonifica in association with the Road
    Department have conducted several meetings with local government bodies, public
    register and local population.

    The representatives of Bonifica, Tbilisi Title Company and RDEMD task force had
    conducted several meetings with the population of the villages of Agaiani and Okami.
    They once again introduced to the local population the project goals, land acquisition
    procedures, explained the landowners and land users their rights. In return they re-
    ceived the feedback from the users of the land parcels that are located within the road
    construction corridor.

    The public meetings with the PAP informed them about the valuation methodology
    and the principles of compensation, land acquisition procedures, their rights and re-
    sponsibilities, alternative rehabilitation measures and grievance redress mechanism.

    The main idea of such public meetings is to ensure the full and deep understanding of
    the entitlements of the RAP implementation procedures.

    The PAP with complaint or grievance will report to the local Sakrebulo. Based on the
    submitted complaint the Environmental and Land Acquisition Unit of the RDMED
    shall directly contact this person and through the appropriate measures resolve the
    raised issue.

                                                                               Page 21 of 29
  10. Entitlement Matrix
Type of
             Loss Implication                             Category of PAP                                        Entitlement
                                                                                (i) Cash compensation at replacement cost; or
             HHs losing agricultural land                                       (ii) If the resources are available the users of the State-owned land shall be
Permanent                                                Private owners and
                                                                                offered with replacement land of the same productive value.
loss of                                                  users with / without
land         Severe impact                                      titles
                                                                                Re-route the alignment to avoid severe impact

                                                                                Cash compensation at replacement cost that includes the cost of re-
             Damage to structure                          Owners of the af-     construction of the same structure
Loss /                                                     fected structure     Re-route the alignment to avoid severe impact; if not possible cash com-
damage to    Severe damage of structure
                                                                                pensation at replacement costs
             Damage to roadside commercial struc-         Owners of the af-     Relocation of the structure to near and safe premise to continue with the
             ture (e.g. kiosk, gas stand, restaurant)      fected structure     same business
                                                        Owners of the af-       Cash compensation equal to the loss of expected annual harvest due to con-
                                                        fected crops            struction
                                                                                Cash compensation at market value on the basis of type, age, and produc-
                                                                                tive value. Construction Company shall ensure free delivery of logged tim-
                                                                                ber to the owner’s residence and the owner shall use logged trees for their
Loss of      Loss of standing crops and trees
                                                        Owners of the af-       own use. For each fruit bearing tree the amount for purchase of a seedling
                                                        fected trees            shall be compensated in addition to the expected loss of income from the
                                                                                sales of fruits.
                                                                                Cash compensation shall not be issued for perennial trees not bearing fruits,
                                                                                but owners are allowed to use the trees logged down for their own purpose.
             Loss of income for roadside business                               Rehabilitation measures including cash compensation at least equal to the
                                                        Business units
             activities                                                         income lost due to construction
             Loss of access to agricultural land        Owners/users            Temporary access will be set up
             Structures knocked down during con-        Owners of the af-       Structures will be restored after the completion of construction; or corres-
Temporary    struction                                  fected assets           ponding cash compensation shall be issued for restoration activities
impact                                                                          Temporary access will be set up; Construction Company shall have to
             Loss of income due to loss of access to    Owners of the af-
                                                                                reimburse temporary loss of income (Budget Table, Column 14) if it fails to
             business location                          fected assets
                                                                                ensure access road

                                                                                                                                                    Page 22 of 29

          Page 23 of 29
Annex 1. Data obtained from the department of Statistics of Georgia
Average annual retail market prices for the years 2000-2005

     Name of Product                  2000        2001        2002    2003   2004    2005    Average price per 1 kg

1    Nigozi                            8,45       8,35        9,28    9,40   10,60   12,20                      9,71
2    Green beans                       0,62       0,53        0,56    0,60   0,70    1,26                       0,71
3    Beans                             1,60       1,63        1,55    1,62   0,87    1,87                       1,52
4    Tomato                            1,39       1,15        1,23    1,61   2,10    2,10                       1,60
5    Cucumber                          1,15       0,87        1,04    1,34   1,71    1,80                       1,32
6    Garlic                            0,67       1,01        2,46    2,35   2,13    2,26                       1,81
7    Potato                            0,46       0,46        0,58    0,59   0,57    0,61                       0,55
8    Onion                             0,56       0,53        0,53    0,65   0,83    0,70                       0,63
9    Wood (cubic meter)                 -           -           -      -     29,71   31,36                    30,54

     Name of Product
                                      2000        2001        2002    2003   2004    2005    Average price per 1 kg
1    Wall nut beans                    9,24       9,49        10,12   9,84   10,78   12,65                    10,35
2    Green beans                       0,88       0,71        0,90    0,67   1,73    1,19                       1,01
3    Beans                             1,54       1,83        1,83    1,66   1,53    1,75                       1,69
4    TomatoP                           1,42       1,42        1,44    1,73   2,10    1,98                       1,68
5    Cucumber                          1,36       1,16        1,12    1,42   1,66    1,63                       1,39
6    Garlic                            0,73       1,05        2,88    2,56   2,43    2,25                       1,98
7    Potato                            0,42       0,47        0,57    0,57   0,49    0,54                       0,51
8    Onion                             0,46       0,48        0,52    0,67   0,82    0,59                       0,59
9    Wood (cubic meter)                 -           -           -      -     29,19   34,19                    31,69

                                                                                                                Page 24 of 29
    Annex 2           Data obtained from the department of Statistics of Georgia


                                                                                                     price per 1
    Name of product             2001            2002             2003          2004    2005   2006       kg

1   Apple                       0,65            0,77              0,87         0,82    1,10   1,16         0,90
2   Pear                        0,72            0,78              0,91         1,23    1,35   1,70         1,12
3   Plum                        0,70            0,87              0,97         1,03    0,87   1,56         1,00
4   Peach                       1,38            1,52              1,33         2,56    1,36   2,05         1,70
5   Grapes                      0,97            1,50              1,64         1,76    2,46   2,36         1,78
                                                                                       12,2   12,6
6   Walnut                      8,35            9,28              9,40         10,60     0      6         10,42
7   Nut                           -               -                 -           4,52   5,29   4,43         4,75


                                                                                                     price per 1
    Name of product             2001            2002             2003          2004    2005   2006       kg

1   Apple                       0,81            0,78              0,85         0,75    0,91   1,05         0,86
2   Pear                        0,85            0,91              0,99         1,04    1,09   1,28         1,03
3   Plum                        0,42            1,15              0,71         1,01    1,01   1,50         0,97
4   Peach                       1,39            1,34              1,44         2,27    1,44   2,02         1,65
5   Grapes                      1,87            1,81              1,89         2,35    2,46   4,14         2,42
                                                                                       12,6   11,7
6   Walnut                      9,49            10,12             9,84         10,78     5      0         10,76
7   Nut                           -               -                 -           3,91   4,88   4,28         4,36

                                                                                                         Page 25 of 29
Annex 3. Table reflecting the approximate productivity of the perennials
       According to age and type of a perennial)
#       Type of a pe-        Incomplete          Approximate Annual yield   Complete productiv-   Approximate Annual yield
           rennial           productivity                 (kg)                   ity age                   (kg)

 1     Walnut tree              8-10                      3-4                      22-25                   40-45

 2     Pear tree                 5-6                      3-7                      15-20                  150-160
 3     Cherry-tree               4-6                     14-18                     12-15                  60-120
 4     Apple tree                3-7                      3-5                      10-12                  80-350

 5     Mulberry                  5-6                      3-4                      10-11                   15-16
 6     Cheery                    2-3                      2-3                       6-7                    15-16

 7     Peach tree                3-4                      3-4                       6-7                    40-50
 8     Tkemali                    5                       6-7                      10-15                   40-50

 9     Dog-rose bush              4                       0,5                       12                      7-8

10     Blackberry                 3                      0.2-0.5                    7                       4-5

11     Quincy                     5                        3                       8-10                     30

12     Apricot                    4                       2-3                      10-12                    40

13     Ceramic                    4                       2-3                      10-12                    40
       Grapes (“Chime-
14     ra”)                       3                       0.5                       4-5                     4-5

15     Grapes (“Pino”)            3                       0.5                       4-5                    2.5-3

                                                                                                                             Page 26 of 29
Annex 4 . Sample format for determination market price through Sales Comparative Approach

                                      Comparables for Comparison (land parcels listed for sale)

Parameters for    Object of ap-       #1             #2              #3           #4              #5             #6            #7
comparison        praisal

Price             _                      24000             838        10000         15000              5025        35175        8000

Size              _                        8000            1500        2500         1500               2200           3000      2500

Price per 1
sq.m.             3.00 GEL                 3,00            0,56        4,00         10,00              2,28         11,73        3,20

Designation                           not culti-     not culti-      cultivated   wine yard       not culti-     wine yard,    arable
                                      vated          vated           with fruit                   vated          fruit trees
                  Agricultural land                                  trees

Address/village   E43-E55 section     Kavtiskhevi    Chobalauri      Tserovani    Tserovani       Dzegvi         Misaktsieli   Agaiani
vicinity to:
Main Road                                            further from    close to     close to        further from   in 250 m      across
                  across the road     across road    road            road         road            road           form road     the road
area              0.5 -1 km           0.5 km         2 km            1km          0,5 km          2,5 km         0,5 km        1km
Irrigation                                                                                        water supply   water
channel           irrigated           close          far             irrigated    irrigated       in yard        channel       irrigated

                                                                                                                                           Page 27 of 29
     Annex 5
                                                           Demarcation Act No___

                                                            of the
                                                Land Parcel located within the
          Georgia Tbilisi-Senaki-Leselidze Auto Road Agaiani-Igoeti E43 – E55 Section Road Construction Project af-
                                                         fected area

                                                                                                         Date: ___________________2007

     Land Parcel Location: _________________Rayon, Village ______________

                  (Names of: the landowner, village Municipality Rtsmunebuli, representative of Rayon Municipality Gamgeoba, surveyor)

     Composed the hereby Act on the following:

     1.   In respect with Georgia, Tbilisi-Senaki-Leselidze Auto Road Agaiani-Igoeti E43 – E55 Section Road Construction
     Project the survey and demarcation activities have been undertaken to land parcel located on the territory of village
     ____________ and is under private ownership of
                                                         (landowner’s full name and ID number)

2.          The location and the boundaries of the stated land parcel are endorsed and confirmed by:

     Chief land arranger of ____________rayon:

     Owner of the land parcel:

     Owner(s) of the adjacent land parcel:

     Full name: _____________
     Representative (Rtsmunebuli) of _______________ rayon Municipality in village ______________

3.          We, hereby endorse the fact of conducting Demarcation and survey activities to the stated Land Parcel:

     Land parcel Owner:

     Full name: _____________
     Representative (Rtsmunebuli) of _______________ rayon Municipality in village Agaiani

     Land surveyor:

     Representative of _____________ rayon Municipality Gamgeoba

                                                                                                                                  Page 28 of 29
Page 29 of 29

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