Turkey - Third Energy Community of South East Europe (APL 3) Project : TEIAS operational procedures document for land acquisition and expropriation

Page 1 Page 1 of 4 TEIAS Operational Procedures Document for Land Acquisition and Expropriation in World Bank Financed Projects December 20, 2005 OBJECTIVE : The objective of transmission infrastructure is to ensure economical and uninterrupted transmission of electricity generated at generation facilities. This objective is achieved by increasing the capacities of old transmission lines and substations and by constructing new transmission facilities. When specifying the routes of new electricity transmission lines and the locations of new substations, settlement areas are avoided to the extent possible and expropriation is kept at the minimum level by not involving houses and other buildings, within the framework of the technical requirements. Necessary care is employed to protect forests, historical and environmental protection sites, etc. LEGAL BASIS FOR ACQUIRING THE SITES OF FACILITIES : The sites of electricity transmission facilities are expropriated on the basis of one or several of the following legislation: 1. Article 46 of the Constitution, 2. Expropriation Law No. 2942 as amended by the Law No. 4650, 3. Electricity Market Law No. 4628, 4. Civil Code No. 4721, 5. Decree in the Power of Law No. 233 regarding State Economic Enterprises, 6. Articles of Association of TEIAS published on 29.06.2001, 7. Reconstruction Law, Land Survey Law, Forest Law, Pastures Law, Organized Industrial Zones Law, 8. Environment Law, Agricultural Reform Law, and other applicable legislation. These laws constitute the basis for the realization of investments in line with national interests (public services) and enable TEIAS to expropriate privately-owned properties. PERSONS AFFECTED BY THE PROJECT : The persons affected by the project are the owners of immovable properties corresponding to the routes of electricity transmission lines or locations of the substations. Such persons are identified as a result of the preparation of implementation and expropriation plans for the investment project. The land lost due to the electricity transmission lines, which often follow a narrow strip of land, are limited to the land connection points of poles, and agricultural activities are maintained underneath the lines. In addition, the sites needed for substations tend to be small. In all cases where the owners of immovable properties can be identified, the first choice practice is to purchase the land by bargaining. For those owners with whom agreement cannot be reached by bargaining or for owners with unidentified addresses, or for immovable properties over which there are ownership disputes; a lawsuit is filed with the relevant court for valuation and registration, pursuant to Article 10 of the Expropriation Law, and the expropriation fee set by the court in the course of the lawsuit is deposited with a bank account to be paid to the owner of the expropriated property. The expropriation fee for immovable properties with no known owner is deposited into a time account with 3-month maturity terms. (Time allowed for notification and negotiations before the invoking of the Expropriation Law is minimum 2 months. This will increase in proportion with the number of owners and acres.) Thus, the owners or beneficiaries of immovable properties do not suffer from the loss of any right. RP389 Page 2 Page 2 of 4 Expropriation fees are set pursuant to the criteria set out in Article 11 of the Expropriation Law. Our legislation does not involve any provision requiring compensation payment for tenants and unofficial users of properties who have made no improvements. However, the damages of persons who have constructed/erected any building on the lands of other persons by spending money and effort are compensated at full replacement cost. RESPONSIBILITY AND FINANCING : The land acquisition process for project investments is executed by Turkish Electricity Transmission Inc. Co. (TEIAS) General Directorate under the authorization of the Ministry of Energy and Natural Resources (MENR) The expropriation procedures are commenced after the approval of MENR with the decision taken by the Executive Board of TEIAS. Expropriation is financed from the operating budget in the respective activity year and the appraised fees are paid to relevant persons in line with the agreement reached or the court judgment issued. EXPROPRIATION PROCESS: a) Commencement of Expropriation; Expropriation procedures are commenced upon the approval of MENR with the decision taken by the Executive Board of TEIAS, within the framework of the technical and economic documents prepared. b) Valuation: A valuation committee consisting of a minimum number of persons appointed by TEIAS appraises the value of the immovable property to be expropriated, having regard to the information and documents to be obtained from expert persons, institutions and authorities, the Ministry of Industry and Trade where necessary, and from local real estate agencies as per Article 8 of the Expropriation Law. c) Announcement: TEIAS notifies the owners of the immovable property to be expropriated through an official registered letter indicating its desire to purchase the subject land by way of bargaining, and paying the price of the land or usufruct right for such land in cash. For immovable properties over which there is ownership dispute, relevant courts publish the summary of expropriation documents in a local and national newspaper at least once. (The time given before the call for negotiations is related to the number of owners and acres.) d) Purchasing Upon Agreement / Payment of Fee / Registration: A reconciliation committee consisting of three people appointed by TEIAS (Expropriation Law-Article 8) holds bargaining negotiations with the owners responding to the notification for agreement and prepares minutes as a result of the negotiations. In cases where agreement is reached, the expropriation is registered at the land office and the expropriation fee is paid. (Expropriation Law-Article 8). e) Procedures to be Followed in Administrative Disputes: In cases where the expropriation is not carried out by way of bargaining and purchasing, a lawsuit is filed with the relevant court of law with the request of setting the expropriation value and registering the immovable property in the name of our corporation. (Expropriation Law- Article 10). (The time given for appeal is 15 days.) The expropriation fee is then deposited at a specified bank account in the name of the owner of the land in line with the court judgment issued and a copy of the receipt of such payment is submitted to the court. Any registration judgment issued is final. The owner can appeal the compensation amount within 15 days after the judgment is issued. The court judgment is executed by the relevant land registry office. (Expropriation Law - Article 10) Page 3 Page 3 of 4 During the implementation of these procedures, we make sure that :