Resettlement Planning Document Resettlement Plan Document Stage: Updated Project Number: 43906 February 2010 PHI: Visayas Base Load Power Development Project Prepared by KEPCO SPC Power Corporation The Short Resettlement Plan is a document of the borrower. The views expressed herein do not necessarily represent those of ADB s Board of Directors, Management, or staff, and may be preliminary in nature.
I. INTRODUCTION 1. KEPCO SPC Power Corporation (KSPC), a joint venture between KEPCO Philippines Holdings, Inc. (a wholly-owned subsidiary of Korea Electric Power Corporation or KEPCO) and SPC Power Corporation, is developing the Visayas Base Load Power Project (Project). The Project facilities to be constructed by KSPC include a 200 MW coal-fired power plant using circulating fluidized bed (CFB) technology and support and associated facilities including the 0.90km (kilometer) proposed transmission line to the new Naga substation. The Project will be funded by the Asian Development Bank (ADB), which requires the preparation of this resettlement plan in conformity with its policy on Involuntary Resettlement (1995). 2. For the power plant component, an ADB due diligence mission was undertaken and confirmed that the resettlement activities have been carried out and completed by the local government unit (LGU) of Naga City, Cebu, National Power Corporation (NPC), Power Sector Assets and Liabilities Management Corporation (PSALM), and KSPC in accordance with applicable national laws and ADB Policy on Involuntary Resettlement (1995). However, noted are outstanding issues to be resolved by NPC/PSALM and the LGU in coordination with KSPC: (i) a case filed in court by NPC against the 5 families who claim to have legal titles and have partially encroached in the leased land and need to be relocated; and (ii) land ownership and/or land titling process for the relocated 17 families. 3. The proposed transmission line (138 KV DC-ST) from KSPC power plant to the new Naga substation aims to provide a new termination point that can accommodate future load growth and maintain an electricity highway that is characterized as reliable, secure, stable, and resilient power system. It will also establish the asset boundary between National Transmission Company (TransCo) asset and the power plant by separating control of Naga Power Plant Complex from TransCo s substation. The new substation will serve as the receiving station of the proposed KSPC power plant as the old Naga switchyard is already congested and all the installed protection equipment/materials are already underrated and operating beyond their economic life. 4. A social analysis carried out in the Project area concluded that the proposed transmission line would require land acquisition and resettlement. For expediency, land acquisition and resettlement program for the transmission line will be incorporated into the overall Land Acquisition and Resettlement Plan (LARP, September 2008) prepared by TransCo which will be implemented by National Grid Corporation of the Philippines (NGCP) as part of the new Naga substation project. In addition to the Project transmission line, this overall resettlement plan of TransCo covers the following components which are outside of the Project: (i) expansion of the existing new Naga substation; (ii) construction of the Banilad-Quiot-New Naga 138kV cut-in-line; (iii) Suba L1 and L2 138 kv line extension; (iv) Sigpit and Suba L3 138 kv line extension; and (v) new Naga 69 kv line extension. II. SCOPE OF LAND ACQUISTITION AND INVOLUNTARY RESETTLEMENT IMPACTS A. Land Requirements and Coverage 1. Power Plant 5. Land for the power plant was acquired by KSPC through an open and competitive bidding held on 14 November 2005 conducted by NPC and PSALM. The land will be leased by KSPC for 25 years and solely used for the construction, testing, operation, management, and
2 maintenance of the power plant. The rental due for the lease of the land for the entire 25-year term is P190,050,735.00 and shall be paid in advance on the closing date. 6. Naga land is collectively composed of (i) the PP 810-845 Land, which has an approximate area of 96,994 m 2 (square meter); and (ii) 16 parcels of land adjacent to, fronting, or near the PP810-845 Land with an aggregate area of approximately 12,412 m 2 and more particularly described as the Other Land both located in barangay (district) of Colon, city of Naga, Cebu Province. Out of the total of 109,406 m 2, only 96,771 m 2 will be occupied by the Project. A large portion (84,359 m 2 ) of this land is registered in the name of NPC under Original Certificate of Title No. OP-58961 while the rest are unregistered lands (12,412 sq.m.) which are currently in the process of registration under the name of NPC. These unregistered lands were vacant and not being used by any third party for residential or economic purposes prior to NPC occupying the land. 2. Transmission Line 7. The Project transmission line (138-kV DC/ST, 6-795 MCM, ACSR/AS "Condor") will be 0.90 km long and extend from KSPC power plant to the new Naga substation. Approximately half of the line will pass inside the existing Naga Power Plant Complex. A 30-meter wide rightof-way (ROW) corridor, which will pass through flat to rolling lands, will affect around 10 houses and 3 secondary structures. Most of these are located beside a barangay road that the line will traverse. The total estimated area of affected private and public lands is 15,791 m 2. Table 1 below presents the summary of project-affected persons, structures, and properties. Table 1: Impact Figures for the Transmission Line Description Impact Figures Estimated Area of Affected Private Lands 1 6,324 m 2 Estimated Area of Affected Lands inside Salcon Power Complex 9,467 m 2 Estimated No. of Affected Houses 10 Estimated No. of Affected Structures 3 Estimated Number of Project Affected Persons Land Owner 11 Tenant 1 Structure Owner 13 Relocatee-Household 10 Source: KSPC, November 2009. 8. For expediency, land acquisition and resettlement program for this transmission line will be incorporated into the overall Land Acquisition and Resettlement Plan (September 2008) prepared by TransCo, which will be implemented by NGCP 2 as part of the new Naga substation project. B. Status of Land Acquisition 1. Power Plant 9. A Memorandum of Agreement (MOA) had been executed and entered into by and between NPC, KSPC, and Naga City to spearhead the necessary negotiations with the affected 1 Residential use but officially classified as industrial lands. 2 NGCP has been awarded a 25-year concession contract to manage the country s power grid and in January 2009 took over these operations from TransCo.
3 nontitled/informal settlers families and secured the relocation site, which is just outside the leased land. The local barangay is coordinating with the Assessor s Office in Naga City on the provision of exclusive rights to the resettled families in the allotted alienable land through tax declarations. The barangay will also make a resolution on the donation of this land to each family. Titling process will involve the LGU to resurvey and claim the land and at the same time determine actual area of the relocation site occupied by the 17 families. KSPC will also provide funds to the host LGU and barangay as provided under section 289 of the Local Government Code 3 and ER No. 1-94 4 of Department of Energy (DOE). 2. Transmission Line 10. Use of the ROW easement of the transmission line including the land required for steel towers to be erected inside the Naga Power Plant Complex is covered by an agreement to be finalized between SPC, PSALM, and KSPC. For the ROW passing through private lands, landowners will be paid at current fair market value. The initial standard rate used to calculate compensation was P389.00 per m 2. After negotiations with affected people and to reflect the latest Schedule of Unit Base Market Value for Residential, Commercial and Industrial Lands for the Municipality of Naga in Cebu, the rate was increased to P813 per m 2. While the land use is residential, NGCP adopted the valuation for industrial lands. C. Involuntary Resettlement Impacts 1. Power Plant 11. Loss of Public Lands and Housing Structure. The proposed power plant required the acquisition of 84,359 m 2 public land and displacement of families living near the old reclamation area. A Memorandum of Agreement had been executed and entered into between NPC, KSPC, and Naga City. The LGU of Naga spearheaded the necessary negotiations with the affected nontitled/informal settlers families and secured the relocation site which is just outside the leased land. Out of 22 families, 17 families have voluntarily evacuated and relocated. The remaining 5 families claim to have legal titles and have partially encroached in the leased land. They do not affect the ongoing construction activities inside the leased land since they are fenced out. NPC has filed a case against these families in the court. In case NPC/PSALM wins the case against the five families and there is a need for involuntary resettlement, KSPC will ensure that they receive replacement cost for legal assets (e.g. house or any developments on land, crops, trees etc.), moving assistance and assistance to restore income and livelihoods if these are affected by relocation. 12. No compensation and financial assistance package have been provided by NPC or the LGU, though the LGU secured the relocation just outside the Project land. KSPC provided moving allowance amounting to P15,000.00 to each family and assistance to demolish their old houses through their contractor and rebuild new houses at no cost (cost of labor and materials was paid for by KSPC). Salvageable materials were allowed to be kept by the owners to be used to reconstruct their new houses. The relocation activities started in October 2008 and were 3 Republic Act 7160 Local Government Code (LGC) of 1991, Section 289 Share in the Proceeds from the Development and Utilization of the National Wealth states that Local Government Units shall have an equitable share in the proceeds derived from the utilization and development of the national wealth within their respective areas including sharing the same with the inhabitants by way of direct benefits. 4 ER No. 1-94 promulgated by the DOE on 24 may 1994 prescribed the provision of direct benefits to pertinent Local Government Units (LGus) hosting energy generating facilities and/or energy resource development projects within their jurisdiction to Section 5 of Republic Act (RA) 7638-DOE Act of 1992.
4 2. Transmission Line 13. Loss of Private and Public Lands. The 0.90 km transmission line from KSPC power plant to the new Naga substation will traverse portions of private land (6,324 m 2 ), which is composed of 14 land plots owned by 11 landowners with 1 tenant and public land (9,467 m 2 ) inside the Naga Power Plant complex. 14. Loss of Structures and other Assets. A total of 13 structure owners (bungalow, hut structure, pig pen, stockhouse, and shanty) will require compensation. House/structure owners will be paid the replacement cost of their houses/structures. Relocatee-households will be granted disturbance compensation. Together with the tenants, land owners will also be compensated for affected crops, plants and trees. The land acquisition and resettlement cost for the Project T/L is estimated at P7 million. III. RESETTLEMENT PRINCIPLES AND POLICY FRAMEWORK 15. As earlier mentioned, the resettlement activities for the power plant have been completed in November 2008 and this was confirmed during the ADB due diligence mission in April 2009. The succeeding paragraphs will deal with the applicable resettlement principles and policy framework for the proposed transmission line only. 16. The resettlement principles adopted for the transmission line recognize the national and local laws such as the Republic Act 8974, RA 7279, Article VII, Urban Renewal and Resettlement (Sections 26 and 28), and ADB's social safeguard requirements, in particular the Policy on Involuntary Resettlement (1995) and Operations Manual (OM) F2 on Involuntary Resettlement (2006). 17. The primary objective of this Resettlement Plan (RP) is to identify impacts and to plan measures to mitigate various losses due to the implementation of the transmission line. The RP is based on the general findings of the census survey, field visits, and meetings with various affected persons in the transmission line area. Taking into account the various losses, an entitlement matrix provides for compensation and resettlement assistance to all affected persons including the non-titleholders in the transmission line area. In general terms, the affected people will be entitled to the following: (i) payment of non-agricultural lands (i.e. residential, industrial, commercial land); (ii) payment of crops, plants, and trees; (iii) payment of houses and other structures; and (iv) grant of disturbance compensation to relocatee households. 18. The policy also asserts integrated income restoration measures for affected households losing their source of income and income opportunity. As mentioned earlier, the census survey identified 10 households living along the route of the transmission line, who currently derive their livelihood from working as laborers and construction workers, operating small convenience store, raising livestock, among others. The construction of the transmission line will require relocation of these 10 households. The affected households will self relocate to locations of their choice. They are likely to resettle within the same vicinity but outside the 30 meter ROW limit. Most of the affected people rely on wages for their livelihood hence their income will be temporarily affected during reconstruction of their dwelling units. In addition to compensation for structures
5 at replacement cost, they will be provided disturbance compensation sufficient to tide them over while reconstructing their houses and/or structures. Skilled workers and laborers from among the affected households will be prioritized for project-related employment. This requirement is clearly specified in the terms of reference for contractors. Non-skilled affected people and other directly affected persons who wish to learn new livelihood skills will be prioritized under the Literacy and Skills Training program under the Social Development Plan. 19. A detailed entitlement matrix which lists various types of subproject losses, identification/eligibility and entitlements and provides for basic parameters for preparation of compensation and resettlement benefits is provided in Table 2. The end of the validation period of affected people based on the parcellary and house-to-house surveys will serve as the cut-off date in identifying affected people who are entitled to compensation and benefits. A written notice about the NGCP project, including the Project transmission line, and the cut-off date shall be given to the respective barangay officials. People moving into the subproject area after this date will not be entitled to compensation or assistance outlined below. Type of Loss/Impact Loss of nonagricultural lands (i.e. residential, industrial, commercial land) Loss of standing crops, plants and trees Loss of structure/house Loss of income/ Disturbance of relocates during transfer of residence Application Non-agricultural lands located within the proposed transmission line ROW corridors, S/S area and access road Crops, plants and trees located within the proposed transmission line ROW corridors, S/S area, and access road Houses/structures located within the proposed transmission line ROW corridors, substation area, and access road Households who have to transfer residence due to the project Table 2: Entitlement Matrix Compensation/Mitigating Measures Payment of land based on current fair market value Cash compensation based on fair market value Cash compensation based on replacement cost (no depreciation) Owners may retain salvageable materials if they dismantle their affected houses/structures down to ground level. Disturbance Compensation equivalent to the daily minimum wage in the projectaffected area multiplied by 60 days If qualified, will be prioritized for project related employment Entitled No. of Person Households Landowner 11 Owners of affected crops, plants and trees House/ structure owner Relocatee - households Skills training Note: This entitlement matrix applies to the overall TransCo project including the KEPCO Transmission Line. Source: KSPC, November 2009. 11 13 10
6 IV. PROFILE OF AFFECTED PERSONS 20. A socio-economic survey was conducted covering 12 out of 36 households affected by NGCP's new Naga substation project and the Project transmission line. The survey shows that all interviewed households are headed by males with ages ranging from 27 to 67 years old. Almost all of them (11 or 92%) are in the working age group (15-64 years old). Most of them (8 or 67%) work as construction workers or laborers while the rest are self-employed including a pedicab driver, a sari-sari (neighborhood store) owner, and a livestock trader. All of them earn more than the Cebu province's monthly per capita poverty threshold of P1,085.00: 3 households report a monthly earning from P3,000 to P6,000; 6 report a monthly earning from P6,000 to P12,000 and two earning a relatively high monthly income of P12,000. 21. All the interviewed households own their houses with floor areas ranging from 6.75 to 96 m 2. Majority of the houses are relatively small with floor areas of 20 m 2 and below. The rest are average sized houses ranging from 21 m 2 to 40 m 2. Majority of the houses have strong wall and roofing materials like galvanized iron sheets, concrete walls, lumber and plywood while the rest a use light materials such as bamboo, salvage materials and nipa shingles. 22. A list of AFs have been prepared by NGCP and attested by concerned barangay officials. Table 3: List of Affected Relocatee-Household and Structure Owner along the Transmission Line AP # Type of AP Type of Structure Floor Area (sq.m.) Material Roofing Siding Flooring 1 R, SO Bungalow 40.76 GI Sheets CHB Concrete 2 R, SO Bungalow 25.00 GI Sheets CHB Concrete 3 R, SO Bungalow 17.50 GI Sheets CHB Concrete 4 R, SO Bungalow; Other Structures 83.41 GI Sheets CHB Concrete 5 R, SO Bungalow; Other Structures 39.90 GI Sheets LM, iron grill Concrete; LM 6 R, SO Bungalow 11.10 GI sheets CHB Concrete 7 R, SO Bungalow 25.75 GI sheets Plywood Concrete 8 R, SO Bungalow 26.50 GI sheets CHB Concrete 9 R, SO Shanty 16.00 GI sheets CHB Concrete 10 R, SO Bungalow 16.00 GI sheets CHB Concrete 11 SO Hut Structure* 8.59 GI Sheets LM Bamboo & Concrete 12 SO Pig Pen 14.70 GI sheets CHB Concrete 13 SO Shanty 2.70 GI Sheets LM Bamboo CHB= concrete hollow blocks; GI = galvanized iron; AP = Affected Person; R = relocate; SO = Structure Owner; LM= combination of lumber, plywoord, bamboo mat, bamboo split; Other Structures= may include convenience store, shed, stockhouse or pigpen. Note: Actual size and type of materials will be validated prior to payment of compensation. Source: KSPC, July 2009.
7 Table 4: List of Affected Landowners and Tenants along the Transmission Line AP No. Tower/Pole Span Type of AP Lot Number 1 1-2 Landowner 934 2 1-2 Landowner 935 3 1-2 Landowner 1-A (886-part) 4 1-2 Landowner 1-H (886-part) 5 1-2 Landowner 1-C (886-part) 6 1-2 Landowner 1-D (886-part) 7 1-2 Landowner 959-A 8 1-2 Landowner 959-D 9 1-2 Landowner 949 10 1-2 Landowner 958 11 1-2 Landowner 957 12 1-2 Tenant 1-A, 1-C, 1-D Source: KSPC, November 2009. 23. Indigenous Peoples. There are no indigenous peoples in Naga City. Majority of the household population in Naga City consider themselves as Cebuanos. No indigenous peoples will be affected by the Project. V. STAKEHOLDER PARTICIPATION AND INFORMATION DISCLOSURE 24. The transmission line and related development activities were discussed with the local communities during the consultation meetings at the sites. The discussions were held with all primary and secondary stakeholders involved with the implementation of the NGCP project and the Project transmission line. The directly affected populations' concerns and suggestions on the types of mitigation measures were gathered and considered in preparing NGCP's LARP. Negotiations with affected people on compensation rates were undertaken from September 2008 to May 2009. Engagement with the affected people and the local community will continue throughout the implementation stage of the Project transmission line. 25. Written communications were sent to LGUs to inform them about the Project transmission line and to request for an endorsement. To date, the Project transmission line has been presented to the affected LGUs (Barangay Colon and Naga City) and development councils (Provincial Development Council of Cebu and Regional Development Council for Region 7). All of them have issued a resolution signed and confirmed by its members. Copies of the LARP were distributed to the municipal office for reference by the LGUs and their constituents. This RP will also be made available both at KSPC and ADB offices and will be posted on ADB website. 26. Role of NGOs and CBOs. As in any national development project, the affected persons may seek the assistance of non-government and/or community-based organizations for a nonpartisan or impartial assessment of the project. These groups are encouraged by NGCP to participate in public hearings and community dialogues and voice out their concerns about the project.
8 VI. IMPLEMENTATION ARRANGEMENT AND GRIEVANCE PROCEDURES 27. Power Plant. There are no outstanding grievances related to compensation for structures owned by informal settlers. Actual Interview with relocated family mentioned that they are satisfied with their present situation because the relocation site is very accessible to their work place and basic utilities (power and water) have also been provided, while the other respondent said that the financial package of P15,000.00 per family is not enough to re-build their house and the allocated lot of 25 m 2 is too small for them. An LGU official mentioned that subdivision of the available resettlement area is 25 m 2 per relocatee only in order to accommodate all of the 17 families. The said respondent is used to having at least 50 m 2 in her previous location. The Office of the Barangay Captain serves as the channel to accept and address complaints, requests, and grievances from the local residents. KSPC s social development plan applies to these relocates. 28. Transmission Line. KSPC, per its agreement with NGCP, will be responsible for the implementation of the RP based on the requirement of the lenders and it shall provide the necessary resources such as the budget and manpower. KSPC will process and disburse payments for resettlement and property compensation related to the transmission line. All compensation and other assistances will be paid to all affected persons prior to commencement of civil works. 29. Issues which may arise concerning payment of lands, crops and improvements and relocation will be settled by NGCP and KSPC. They will be assisted by a legal adviser to be hired by NGCP to handle all the legal matters/concerns. All other issues on relocation and ROW which cannot be resolved by NGCP and the Project Office shall be referred to the Land and Land Rights Department, Office of the General Counsel. As a last recourse, the NGCP could elevate the related concern/issue to the concerned trial court for a resolution/decision. The Conflict Resolution Process Flow as shown in Figure 1. Figure 1. Conflict Resolution Process Flow START Project Office receives issues/concern from APs and refers to appropriate NGCP/ KEPCO Personnel/ Office for Resolution AP and concerned NGCP/ KEPCO Personnel discuss/ resolve issue/concern (AP may opt to involve local government leaders in the negotiations) Issue/ Concern Resolved? YES END NO Project Office forwards issues/concerns to NGCP/KEPCO Management for Review/ Evaluation/Resolution END NGCP/KEPCO or AP goes to court to settle issue NO Issue/ Concern Resolved? Project Office informs AP of Management Decision END YES Source: KEPCO SPC Power Corporation
9 VII. BUDGET AND IMPLEMENTATION SCHEDULE 30. The total estimated cost for resettlement operation and management for the Project is P7 million. The estimate includes all costs related to compensation for land, resettlement cost, and other benefits as per the entitlement benefits. The costs of the private land and trees have been derived in close coordination with the City Assessor's office, local people and affected persons based on the prevalent market value of the land in the area. Table 5: Budget for Land Acquisition and Resettlement KEPCO T/L Type of Payment (peso) Acquisition of Private Lands (P813/m 2 x 6,324 m 2 ) 5,141,912 House and other structures 1,226,696 Crops, plants and trees 256,225 Disturbance Compensation 106,273 Contingency (5%) 170,815 Grand Total 6,901,921 SAY 7,000,000 Source: KSPC, November 2009. 31. In addition to the resettlement budget, KSPC has allocated P20,000 annually for literacy and skills training for directly affected people as well as residents of Barangay Colon. 32. Activities for public acceptance, from identification or affected LGUs up to the securing of project endorsements, have been completed. All the affected LGUs and development councils have endorsed the Project transmission line as of 31 March 2008. Land acquisition and resettlement activities, such as identification and socio-economic survey of affected people, secondary data gathering, preliminary cost estimation of affected properties, and actual preparation and securing approval were conducted from January to September 2008. The measurement and detailed cost estimation of houses/structures, counting of crops, plants and trees, and inventory of other affected properties were started earlier even prior to the TransCo approval of the LARP. Implementation of the land acquisition and resettlement activities is targeted for completion by the end of September 2010. VIII. MONITORING ARRANGEMENTS 33. TransCo will have the overall responsibility to supervise and monitor the implementation of the RP through its Social Engineering and Right-of-Way Management Department in coordination with KSPC representatives. KSPC will report to the lenders on a quarterly basis within the RP implementation period. The monitoring report will deal with all aspects of relocation, resettlement, and rehabilitation of the households. A complete status report on RP implementation will be prepared by KSPC and submitted to the lenders at the end of RP implementation. The report will reflect on the resettlement experience and lessons learned for improved management of resettlement for future projects.