OVERVIEW OF RIGHTS OF WAY IN MEXICO AND LATIN AMERICA: Presented by Guillermo Manning Carlos Sandoval Jesús Sandoval Introduction In this session we will review several concepts that affect the process of right of way acquisition. These concepts are the result of the Mexican normativity and legislation. First we will review the principles of ownership, since there are some players in Mexico that are unique. As second point we will review the kinds of real estate derived from legislation and also the different types of public registers. Next we will review the basic legal frame involved in right of way. Afterwards we will review the acquisition process and we will see the different modes to acquire land for a right of way project. Some statistics of the major players of the right of way are presented, and finally the dynamic of the process is reviewed focusing communities, ownership and negotiation issues. Principles of ownership The principles of ownership contained in the Mexican Constitution are: 1) Ownership corresponded originally to the Nation (the State), which has transferred this to individuals. 2) The Nation can regulate real estate as dictated by public interest. 3) The Nation is directly responsible for the natural resources of the subsoil (mines, petroleum, gas, nuclear energy), waters (sea, lakes, rivers), which cannot be transferred to individuals. These resources can be exploited under concession. Principles of ownership 4) Concessions are granted both to Mexicans, and to the foreigners who pact with the Mexican Government to be considered as Mexicans for this purpose and not to invoke the protection of their Governments. 5) Foreigners cannot acquire the direct ownership of real estate within an area of 100 kilometers along the borders with neighboring countries, or 50 kilometers along the coast (restricted areas). – Modifications to de Foreign investment law states that with the pact corporations could own within the restricted area to develop industrial, residential and commercial areas. 6) Agrarian property (rural or country properties) consists of various categories; lots of common land or communal property granted to common land holders or communities, which cannot be negotiated or belong to individuals. The existence of privately-owned agricultural smallholdings is also recognized. Kinds of real estate In addition to the principles on ownership laid down in the Constitution, the National Assets Law and Civil Codes mention the existence of two kinds of property: that of public dominion and that held by individuals. 1) Property of public dominion is that corresponding to the Federation, States and Municipalities, and to special laws. 2) Property of public dominion can also be: property in common use which can be utilized by anyone (such as, for instance, air space, territorial waters, beaches, ports, roads, bridges or monuments). Kinds of real estate 3) Public dominion property cannot belong to individuals (nor can it be transferred or prescribed, meaning that it cannot be transmitted or acquired by prescription). In order for someone outside the Federation to acquire public dominion property (such as property destined for public service or unencumbered property), such property must be released from public dominion by means of a disincorporation ruling issued by the President of the Republic. 4) Agrarian common land nor communal property (which cannot be transferred or prescribed). 5) Privately-owned property consists of everything not of public dominion (of the Federation, States or Municipalities), nor agrarian common land nor communal property (which cannot be transferred or prescribed). This privately-owned property forms the subject matter of private operations, and is governed under the Civil Codes of each of the States. Public Registers The ownership of real estate is entered in sundry Public Registers, depending on the type of property in question. These Registers are public, and serve to make know the action taken in connection with real estate. For example, the following Registers exist: 1) The Public Register for Property carried in each State of the Mexican Republic (and at times in certain Municipalities), which records the properties belonging to individuals. Entered here are the details of the property, such as location, surface area and boundaries and the name of the owner, the action under which ownership was acquired (purchase/sale, inheritance), mortgages or seizures in force over the property and any limitations which may exist in the dominion (for example, a right of way). Public Registers 2) The National Agrarian Register is where the documents recording property operations, amendments and rights over common lands and community lands are contained, together with legal or official resolutions which recognize, create, amend of terminate common land or communal land rights and the guaranties conferred over agrarian property. 3) The Federal Public Property Register records the titles of ownership and possession of properties belonging to the Federal Government, together with the decrees incorporating or releasing certain properties from public dominion. Other Registers 4) Special registers exist for other types of property (assets), such as the National Public Maritime Register, which lists the matriculations of Mexican naval vessels and artifacts; the Mexican Aeronautical Register, which records the documents by means of which Mexican civil aircraft are acquired, transferred or encumbered and the matriculation certificates: the Industrial Property Institute in which patents, trademarks and trade names are entered; and the Public Copyright Register, for recording copyrights. 5) There are also Registers of Persons, such as the Merchants' Register (not very common), and the register for associations and corporations. The Public Register for Commerce lists business associations (the most common being the stock company). The most important information regarding corporations is noted, such as name, domicile, purpose and by whom it is represented. Right of way: normative frame The legal frame for the Right of way is conformed by the following laws: Constitución Política de los Estados Unidos Mexicanos Artículos 25, 27, 73, 115, 121 Ley Federal de las Paraestatales Ley de Desarrollo Sustentable Artículos 1, 11, 46, 58 Artículos 2, 3, 6, 9, 13 Ley del Equilibrio Ecológico y Protección al Ambiente Ley de la Comisión Reguladora de Energía General de Aguas Nacionales Ley General de Desarrollo Forestal Sustentable Right of way: normative frame (Cont.) Ley General para la Prevención y Gestión Integral de los Residuos Programa Nacional de Medio Ambiente Código Penal Federal. Códigos civiles federal y estatales Plan Nacional de Desarrollo. Ley Orgánica de Petróleos Mexicanos y Organismos Subsidiarios. Ley del Servicio de Energía Eléctrica Ley General para la Prevención y Gestión Integral de los Residuos NORMAS OFICIALES MEXICANAS Comparative normativity: Concept Main law for R/W Exploitation regime Participation in profits of land owners Mexico Regulatory law of Article 27 Exclusive for the Sate None. They´ve got a unique payment May be transferred by state to particular. The states charges rights equivalent to 30% as royalties Long term rent contract; considered as an associated The State regulates and promotes the interstate commerce of oil. Government awards concessions to particulars to exploit oil and charges rights as royalties Long term rent contract; considered as an associated Venezuela Organic law of hydrocarbons US Organic Law of energy Dept. State awards concessions to Norway Proposal Nr 43 for energy acts particulars to exploit oil and charges rights as royalties Long term rent contract; considered as an associated Council issues rules so that private companies can have the right to Arab Supreme Council of Petroleum explore an exploit hydrocarbons and Emirates charges rights as royalties Long term rent contract; considered as an associated Article 27 This article states that the property of all land and water within national territory is originally owned by the Nation, who has the right to transfer this ownership to particulars. Hence, private property is a privilege created by the Nation. Expropriations may only be made when there is a public utility cause. The State will always have the right to impose on private property constraints dictated by "public interest". The State will also regulate the exploitation of natural resources based on social benefits and the equal distribution of wealth. The state is also responsible for conservation and ecological considerations. All natural resources in national territory are property of the nation, and private exploitation may only be carried out through concessions. Acquisition of land for right of way The constitution of a right of way involves: • Acquisition of lots • …from several owners • …different uses To develop an specific type of infrastructure Ways of acquisition • Easements • Superficial occupation • Buy • Expropriation Superficial occupation • Permanent installations of infrastructure built on or under surface of land • Defined time length agreed with the owner. In case of social land the time can not be longer than 30 years. • Does not allow the use of the land by the owner. • Ownership is not transferred. Buy • Normal buy-sell operation • Mainly used for roads deployment Expropriation (condemnation) Expropriation in Mexico is ruled by two laws:: • Article 27 of the Mexican Constitution • Expropriation Law This legal frame is applicable to every expropriation, regardless the end use of the Expropriated good nor the type of ownership, including private and social owned land (Ejidos) The following chart shows some of the important differences found between private and social owned land: Expropriation CONCEPT SOCIAL LAND PRIVATE PROPERTY Petitioner Secretaría de la Reforma Agraria, as requested by interested institution Ministry of the interested institution Negotiation Leaders or representatives of the community One to one Options other than expropriation Only in case the land has been converted into private. The first sale is still considered as social land Buy To probe that all negotiation instances were used. Main requirement for the To probe that the lot is specifically technical file for ideal for the proposed usage and to condemnation public service. To probe that all negotiation instances were used. To probe that the lot is specifically ideal for the proposed usage and to public service. Expropriation CONCEPT SOCIAL LAND PRIVATE PROPERTY Most common source of inconformity Value of the land Value of the land Most common source of attack to the process Value of the land Suitability Value of the land Usual time length to get the public usefulness decree Usual time length if a writ of amparo is held Most common inconformity when the expropriation is executed One year two – five additional years Payment terms One – three years two – five additional years Payment terms Public usefulness declaration In order to start an expropriation process there should be a public usefulness declaration. • This declaration must follow the steps shown in the chart below: • Application together with technical report and project affectations report. It must describe every single lot • Public information (20 days for allegations) • Allegations (15 days for applicant to accept or rebate) • Reports to other public organisms (20 days report, 15 days to rebate report and 15 days to respond rebates • Resolution: about 6 months after application • Administrative and Contentious resources RIGHT OF WAY ACQUISITION PROCESS PROPERTY RECORDS RESEARCH EJIDO REVIEW OF OWNERSHIP STATUS LAND USAGE PERMITS PRELIMINARY PROJECTS AND SITE SELECTION ENVIRONMENTAL IMPACT ASSESSMENT MASTER APPRAISAL COST – BENEFIT STUDY EXECUTIVE PROJECT BUDGET NEGOTIATION NO ACCEPTED NEGOTIATION FIRST ROUND ACCEPTED OPPORTUNITY VALUE ACQUISITION OF RIGHT OF WAY NEGOTIATION 2ND ROUND ACCEPTED COMISION FEDERAL DE ELECTRICIDAD (CFE) The CFE electricity transmission and distribution network is formed by more than 770.4 thousands of kilometers for different powers: PEMEX Petróleos Mexicanos (trademarked and better known as Pemex, Mexican Petroleum) is the Mexican state-owned petroleum company. Its operation is done throughout four subsidiaries: • Pemex Exploración y Producción –PEP-(exploration and production) • Pemex Refinación (Oil Refinery) • Pemex Gas y Petroquímica Básica (Gas and basic petro chemistry) • Pemex Petroquímica (Petro chemicals) PEP Their main activities are oil and natural gas exploration and exploitation; conveyance, storage in terminals and first hand commercialization; these are carried out daily in four geographic regions comprising the total Mexican territory: North, South, Northeast Offshore and Southeast Offshore. Worldwide speaking PEP has the third place on crude production, the first in offshore hydrocarbons production, the ninth in crude reserves and the twelfth in incomes. PEP infrastructure Pemex Refinación Pemex Pemex's Refinación (Pemex-Refining) subsidiary which is a processes, transports and markets a wide range of products derived from crude oil, including gasoline, jet fuel, diesel, fuel oil, asphalts, LPG, lubricants and other refined oil products. Pemex Refinación infrastructure Pemex Gas y Petroquímica Básica Pemex Gas y Petroquímica Básica (Pemex) is Pemex’s subsidiary which processes, transports and commercializes natural gas, liquid hydrocarbons (such as liquefied petroleum gas or LPG) and basic petrochemical products, such as ethane, natural gasoline and sulphur. Likewise, Pemex Gas offers its industrial clients several services, among them the hedge prices of natural gas. Pemex Gas infrastructure Pemex Petroquimica PEMEX Petrochemicals, produces, commercializes, and distributes High, and Low Lineal Density Polyethylene, Ethylene Oxide, Glycol, Vinyl Chloride, Ethylene, Ammonia, Methanol, Styrene, Benzene, Toluene, Xylem, Para xylene, Propylene, Orthoxylene and Acrylonitrile to satisfy the demand in the national market and a part of the international market. Their main activity are petrochemical non basic processes, derived from the first transformation of PEMEX Natural Gas, Methane, Propane and Naphtha Pemex Petrochemicals infrastructure Ducts infrastructure The overall length of ducts amounts to more than 41 thousand kilometers, having Refining and Gas almost 70% of it. SUBSIDIARY PEMEX EXPLORACIÓN Y PRODUCCIÓN PEMEX REFINACIÓN PEMEX GAS TYPE OIL GAS OIL POLY DUCT GAS PRODUCTS PEMEX PETROQUÍMICA TOTAL LENGTH (km) 4,852 7,656 5,213 8,958 10,307 3,659 742 41,387 SECRETARÍA DE COMUNICACIONES Y TRANSPORTES The Ministry of Communications and Transportation (SCT) is in charge of highway infrastructure, transportation (road, aerial, maritime, train) and communications. Road infrastructure CONAGUA (NATIONAL WATER COMMISSION) Water in Mexico is considered a national asset. Water administration corresponds to the President of Mexico, who delegates it to the National Water Commission. The National Water Commission (CONAGUA) is an administrative, normative, technical, consultative and decentralized agency of the Ministry of the Environment and Natural in charge of: a) Administration of the National Waters. b) Management and control of the hydrologic system. c) Promotion of social development in water related issues. MAIN AQUEDUCTS BY HYDROLOGIC REGION Aqueducts length accounts for more than 3 thousand kilometers with an overall capacity of more than 112 cubic meters per second. Main aqueducts and their lengths are: NO AQUEDUCT HYDROLOGIC REGION LENGTH (KM) CAPACITY (L/S) YEAR OF COMMISSION ING 1 Río ColoradoTijuana I Península de Baja California 130 4,000 1982 2 VizcaínoPacífico Norte I Península de Baja California 206 62 1990 3 Sistema Cutzamala IV Balsas 162 19,000 1993 4 Sistema Cutzamala XIII Aguas del Valle de México 162 19,000 1993 5 Linares Monterrey VI Río Bravo 133 5,000 1984 6 El CuchilloMonterrey VI Río Bravo 91 5,000 1994 SUPPLIES TO Ciudades de Tijuana y Tecate y al poblado La Rumorosa en Baja California. Localidades de Bahía Asunción, Bahía Tortugas y poblados pesqueros de Punta Abreojos en Baja California. La Zona Metropolitana de la Ciudad de México con agua de las presas Valle de Bravo, Villa Victoria y El Bosque, entre otras. La Zona Metropolitana de la Ciudad de México con agua de las presas Valle de Bravo, Villa Victoria y El Bosque, entre otras. Al área Metropolitana de la ciudad de Monterrey, N.L., con agua de la presa Cerro Prieto. Al área metropolitana de la ciudad de Monterrey con agua proveniente de la presa el Cuchillo. MAIN AQUEDUCTS BY HYDROLOGIC REGION NO AQUEDUCT 7 Lerma 8 Lerma 9 ArmeríaManzanillo ChapalaGuadalajara Presa Vicente GuerreroCiudad Victoria UxpanapaLa Cangrejera YuriviaCoatzacoalcos y Minatitlán Río HuitzilapanXalapa Chicbul-Ciudad del Carmen Conejos-Médanos 10 11 12 13 14 15 16 HYDROLOGIC REGION VIII Lerma Santiago Pacífico XIII Aguas del Valle de México VIII Lerma Santiago Pacífico VIII Lerma Santiago Pacífico IX Golfo Norte LENGTH (KM) CAPACITY YEAR OF (L/S) COMMISSIONING SUPPLIES TO Ciudad de México con agua de los acuíferos localizados en la zona alta del Río Lerma. Ciudad de México con agua de los acuíferos localizados en la zona alta del Río Lerma. Ciudad de Manzanillo, Colima. 60 14,000 1975 60 14,000 1975 50 250 1987 42 7,500 1991 54 1,000 1992 X Golfo Centro 40 20,000 1985 X Golfo Centro 64 2,000 1987 X Golfo Centro 55 1,000 2000 Ciudad de Xalapa de Enríquez, Ver. XII Península de Yucatán VI Río Bravo 122 390 1975 25 1,000 2009 Localidades de Sabancuy, Isla Aguada y Ciudad del Carmen, Campeche. Ciudad Juárez, Chih. La zona metropolitana de la ciudad de Guadalajara con agua del Lago de Chapala. Ciudad Victoria, Tamaulipas con agua proveniente de la presa Vicente Guerrero. 22 industrias ubicadas en la parte sur del estado de Veracruz. Ciudades de Coatzacoalcos y Minatitlán, Ver. con agua del Río Ocotal y Tizizapa. Dynamic of right of way To understand the challenges associated to the acquisition of right of way in Latin America first of all it is necessary to recognize that the idiosyncrasy is determined by huge social, economic, cultural and normativity diversities Dynamic of right of way Some statistics of the region are: • Life expectance 57.2 to 81.1 years • Mortality index: 4.2 to 9.1 / 1000 • Hospital beds: 0.7% to 8.4% • Illiteracy index: 1.6% to 43% (Population with 15 years or more) • Education expenses (% GDP): 1% to 9.8% • Electric power consumption / inhabitant: 82 to 4,558 kw/h Main players Currently the main players are still the government ministries and institutions, being private investment mainly in projects for roads and gas. Main players In terms of kind of land acquisition the projects are: Type of project Buy Expropriation Superficial ocupation Easements Usufruct Roads X X Electricity X X X X X Oil and gas X X X X X Water X X X X X Other players Starting in 1995 private investment is permitted for projects involving right of way. Among them it are worth mentioning: Sector Type of projects # of concessions Electricity Generation for self consumption, renewable energy More than 500 Gas and basic petrochemicals Transport, storage and distribution of gas and petrochemicals 27 for transport Water Aqueducts; currently two important projects on going. One in Jalisco awarded to Abengoa, a spaniel corporation and one in Veracruz. 2 Oil, oil derivatives Outsourcing contracts for the construction of ducts; ROW design, engineering by Pemex. 1 Dynamic of right of way • Legislations at different stages. • Legislations with different levels of actualization. • Disperse or no systemized legislation. • Legislative multiplicity at different levels of government: federal, state, municipality. • Susceptible to political influences. Communities • Communities do not trust authorities nor companies. • Information regarding ducts are scarce and previous bad experiences with similar projects. • Negotiation process with frequent delays and unachieved. Payments were not fulfilled. • Concern about safety of the community for the duct and potential accidents. • Perception of big impact to community life and structure versus scarce direct benefits; this results in demands of better compensations. • Politicization of projects resulting in significant community division (pro and against the project) • Geographic disperse communities and towns Communities • Activism is present in projects Ownership • Excessive division of land. Too many owners and negotiations. • Land tenure frequently associated to a social justice sense. • Frequent cases of irregular occupation of land, including invading, irregular possession, judicial embargoes, etcetera. • Lack of legislation and special judicial procedures to warrant implementation of agreements and judicial resolutions. • External activism. Negotiation To analyze the negotiation process it is very important to highlight the fact that up-to-date it is a very asymmetric practice, since the owners of the land area are mostly passive players who are affected by other decisions, being social activism a resource to be considered by them. Negotiation Once the fact that their land is going to be a right of way for a project is accepted, it comes out the issue of the value that is offered to them. The normativity issued by the National Institute for Administration and Appraisals for National Goods, Indaabin, states that the appraisal must consider the soil usage considering the parcel as it is before the infrastructure project, but it also states that the appraisal must consider the highest and best use. These two statements might be the clue to understand the source of so many conflicts derived from the land value in negotiations. A possible source of conflicts in expropriation processes is that Indaabin is the only institution that can issue appraisals, what might be considered a interest conflict, since this institute is part of the Federal Government. Negotiation Here we consider worth explaining a very important difference between the Mexico procedures for acquisition of right of way and those from the US: • Right of way include only the land that will be conforming the right of way, this means that there are no excess properties that should be resold. As a result of this criteria the parcels end somehow mutilated and with limitations to be exploited with the usual business. This consideration is true for all of the acquisition alternatives mentioned above. Negotiation ROW acquisition operations are quiet the same than those in other countries, but there are differences that are worth highlighting: • During negotiations there are important players that are very focused community negotiations known as lobbyist, who are in charge of specific research in the target area to identify conflictive communities, on going judicial procedures, political trends in the municipalities in the track. • Contracts, administrative permits, legal critical path are very specific as result of the huge differences in normativity requires law consulting services that are highly specialized HISTORY CASES INFRASTRUCTURE PROJECTS IN MEXICO IRWA Conference, June 23rd/25th, La Yesca Dam La Yesca is one of the largest dams in Latin-America and it is part of Hydroelectrical National system “La Yesca” Localization Land acquisition Negotiations were conducted on a one-on-one basis. When the acquisition were in xxx % there was an stagnation in negotiations mainly due budget exhaustion and both sides expectations: according to master appraisal CFE was paying too high and the owners thought that they were not being paid on a fair basis. We want to highlight the negotiating position of owners, since the negotiations were for buying their land they felt no need to sell having as result rising of expectations of value. Analysis of alternatives. Bringing into the analysis the owners negotiating position, the importance of those specific parcels for the project (they were the land for the dam’s arch) several alternatives were considered assessing social, economical and political impacts, as well as threats for the projects to evaluate the advisability of an opportunity value payment. Next char shows the different options that were analyzed. These options result from the normativity accepted by CFE Pago de Valor de oportunidad Continuar con adquisición Expropiación Propietario no acepta oferta CFE Cambiar de sitio Direct cost of project commissioning on time Losses due to delay in commissioning and selling electricity are obviously increased directly related to project delay. Next charts show annual losses and also the amount that should be paid if any option is selected: CONCEPT AMOUNT UNITS Unitary price (Kw-h) 953.27 $/KWh Installed capacity at projects end 750.0 MW 5,922.07 hours Billable capacity 4,441,553.24 MWh Billable amount 4,234.0 Billable operating hours Other expenses (/factor) Annual cost (millions pesos) Years Amount Millons Pesos Opportunity value payment 507.7 0 0.0 (As % of overall sales) Expropriation 507.7 2 1,015.4 Change the site 507.7 3 1,523.1 Direct cost and expenses (operation) Operation Depreciation Administrative expenses 3,181.1 451.5 93.7 75.1% 10.7% 2.2% Total 3,726.4 88.0% Benefit 507.7 12.0% Patrimonial damage to CFE Damages to CFE patrimony estimated assuming that several parts of the project should be remade. Next chart summarizes these costs: Concept Total Estudios sociales y ambientales Costo de ingeniería Proceso de licitación Costo Total Pago de Valor de oportunidad - - - - Expropiación - - 15,000,000 15,000,000 26,875,500 107,216,000 15,000,000 149,091,500 Cambio de sitio Delay In any option in which a delay in project execution the possibility exists that negotiations are longer and that owners pretensions become higher: Opportunity Value Land value Other goods than land amount 22,228,241.90 8,786,927.30 Total: Asked by owners Opportunity value: 31,015,169.20 54,100,000.00 23,084,830.80 LOSSES DUE TO DELAY IN SALES PATROMONY DAMAGE TO CFE TOTAL (millions pesos) (millions pesos) (millions pesos) 0 0 23.1 Expropriation 1,015.40 15 1,030.4 Change the site 1,523.10 149.1 1,672.2 Opportuniy value La Yesca Damp. Continuar con adquisición Propietario no acepta oferta CFE Pago de Valor de oportunidad Expropiación Cambiar de sitio International Mexico City Airport, AICM. April 2001 newspapers in Mexico City published the decision to build a new airport for Mexico City in the area where it used to be the Texcoco Lake. Overall area is 5,500 ha (11,000 acres) form which two thousand would be for the airport and the rest for remediation and ecological protection areas. The investment was estimated in 3 thousand millon dollars. This project was affecting 15 ejidos in the municipalities of Texcoco and San Salvador Atenco in the State of Mexico and 4 thousand ejidatarios that owned that land and 2 thousand possessors of land considered to be non-urbanizable. The land was for agricultural uses, being 900 has irrigated. AICM. AICM. ATENCO TEXCOCO CHIMALHUACÁN AICM. NUCLEO AGRARIO SAN FRANCISCO ACUEXCOMAC NUMERO DE NUMERO DE EJIDATARIOS POSESIONARIOS EN LA RECONOCIDOS EN ADATEADATE-PROCEDE PROCEDE 329 0 SUPERFICIE PROMEDIO POR EJIDATARIO Y POSESIONARIO (HA.) (1) 0.83 COL. FRANCISCO I MADERO 111 120 1.47 SAN LUIS HUEXOTLA 195 7 1.21 SAN CRISTOBAL NEXQUIPAYAC 350 51 2.31 SAN BERNARDINO 210 0 1.73 SANTA ISABEL IXTAPAN 330 303 2.54 SAN MARTIN NEZAHUALCOYOLT 73 5 3.69 TOCUILA Y SUS BARRIOS 499 0 1.76 SAN SALVADOR ATENCO 489 619 1.12 SANTIAGO CUAUTLALPAN 210 0 1.39 S. FELIPE Y STA. CRUZ DE ABAJO (2) 140 N.D. 3.01 SANTA MARIA CHIMALHUACAN 650 871 0.83 LA MAGDALENA PANOAYA 373 119 0.81 3,959 2,095 TOTALES AICM. AGRICULTURAL STATUS * Agricultural use land, some of it with scarce vegetation. * Flat topography, with water levels that allow litlle lagoons with plants which tolerate excess of water. * Scarce vegetation areas formed by grass somehow resitent to salinity. * Land unuseful for rain irrigated agriculture because of low yields. THESE LANDS ARE UNUSEFUL FOR AGRICULTURE AND ARE VERY LIMITED FOR CATTLE BREEDING AICM. October 2002 the governmental institution in charge of appraisals (CABIN) issued and appraisal to estimated the amount of payments starting from a commercial agricultural value of 7.2$/m2 for rain irrigated land and 25$/m2 for irrigated land, even though ate the peripheries of the Texcoco Lake there was offer of land for residential uses in the range of 15.00- 50.00 $/m2. In terms of land acquisition impact in the whole project it represented 2% of the investment, and if the expectations of ejida land owners were flfilled it had been 8%. AICM. When expropriation decrees were published it was formed and organization opposing to it. It was named “Movimiento en Defensa de la Tierra”- land defense movilization, als known as “los Macheteros de Atenco” – Atenco´s machete men. This group made front with some violence to the government of the State of Mexico. The following days there were statements from different government offices and levels taking hands off the conflict. Some days after, the Minister of Agrarian Reform stated that low prices estimated were issued by CABIN, whose president stated that they were qualified by law to estimate the value, but it corresponded to the Government Ministry to conclude with the price. Two days later the project was cancelled , but it is still undecided where the new airport is going to be. Conclusions • Acquisition of right of way is considered to be a very important milestone in the development of a project. • The planning of the projects must consider the social factor as a very important issue. • Work with communities at the early stages of the project is advised Conclusions • The value of the land is the most common source of conflicts during negotiation, since owners suffer different affectations: – They must sell in a compulsory way part of their parcel. – The rest of the parcel is mutilated and the usual activities must be adjusted. – The value usually does not reflex the new situation of the property that would be the usage as part of the right of way. – Owners are always an affected part which is out of the business and not and associated with whom right of way operators make • There is an importan opportunity in the ROW industry, since the rules changing now allow private investors to take part of the industry. Contact: Guillermo Manning: gmanning@rdabogados.com.mx) Carlos Sandoval Miranda carlossandovalmiranda@yahoo.com Jesus Sandoval Sevilla: jesus.sandoval@caltia.mx