Conformed Copy - C2952 - Third Andhra Pradesh Irrigation Project - Supplemental Letter 2

Page 1 June 3, 1997 Dear Sirs and Mesdames: Re: Loan No. 4166-IN and Credit No. 2952-IN Third Andhra Pradesh Irrigation Project Resettlement and Rehabilitation This refers to paragraph 10 of Schedule 2 to the Project Agreement of even date herewith among the International Development Association (the Association), the International Bank for Reconstruction and Development (the Bank), and Andhra Pradesh for the Third Andhra Pradesh Irrigation Project. Unless agreed otherwise with the Association and the Bank, Andhra Pradesh shall carry out the resettlement and rehabilitation under the Project in accordance with the plan attached to this letter. Very truly yours, STATE OF ANDHRA PRADESH By /s/ Sudhakar Rao Authorized Representative Enclosure INDIA THIRD ANDHRA PRADESH IRRIGATION PROJECT Resettlement and Rehabilitation (R&R) Program 2.40 Land Acquisition. The total amount of land required for all project works, including roads, amounts to 7,981 ha, including 4,877 ha of land already taken over for the project since 1985 and 3,104 ha to be acquired for the proposed project. Of the total amount of land required, 6,479 ha is privately owned land, of which 4,030 ha have already been acquired and 2,449 ha are at different stages of acquisition. Compensation for land was paid in line with the Land Acquisition Act (LAA) of 1894, amended in 1984. This compensation proved inadequate and many landowners sought and received redress of grievances in the courts. GOAP issued Negotiations Committee Rules in 1992, stipulating the constitution of Negotiation Committees and procedures for negotiated compensation with landowners affected by land alienation for public projects. Persons whose land acquired after 1992 received consent awards. Thus, for land still to be acquired, GOAP will seek utilize the Negotiation Committee procedure to pay land compensation at the prevailing land market value in addition to entitlements under para. 2.44. For trees, structures and other assets to be acquired, replacement value will be paid. If the negotiations fail to result in consent awards, the affected person could resort to the legal proceedings under the LAA. 2.41 Eligible Project Affected Persons (PAPs). New irrigation commands potentially improve the livelihood of all command area population: thus loss of a small area of dry land to canal construction would be offset by increased income from the remaining holding. Thus PAPs are defined by the project R&R Policy as including all persons who have lost--or stand to lose--a “minimum economic loss