En bloc expropriation: Which megaprojects will it benefit and how will agreements be made with the owners?| Land expropriation | Justiprice | Bulk release

The execution of large public infrastructure works—such as the Peripheral Road Ringwhich requires the acquisition of almost 2,350 homes—frequently face a problem: the release of land for execution. An owner’s refusal to have his house expropriated can delay work for months or even years if the case goes through arbitration. For this reason, the government has approved a new legal mechanism that will allow block expropriations when several properties are within the outline of a project.

The objective of the measure is expedite the execution of infrastructure works and reduce the delays that usually affect megaprojects roads, railways, among others. Likewise, it provides additional incentives to owners to favor direct treatment.

Through Legislative Decree 1726, which modifies Legislative Decree 1192 (Framework Law of acquisition and expropriation of properties and release of interferences), the executing units are authorized to group contiguous properties that are necessary for a work instead of negotiating and expropriating each property individually, as is currently the case.

“Now, a set of properties can be treated as a territorial unit. This measure represents a great solution to reduce the frequent delays in the appraisal of land and in the negotiation of compensation with the owners,” explained El Comercio to El Comercio. attorney Irving Barahonaspecialist in administrative law.

Likewise, the rule maintains the obligation to compensate the owners according to the commercial value of the property and establishes that the entire procedure must respect due process with notification and the possibility of observations. Furthermore, direct agreement will be prioritized before applying expropriation.

What projects will the block expropriation benefit?

“It can primarily benefit large-scale public infrastructure projects in which land release has historically become a bottleneck. For example, construction or widening of important roads; express routes; urban road rings; mass transportation project areas, such as trains and subways; and, something that is often overlooked, such as hydraulic and drainage works“said Collantes.

Along these lines, Barahona mentioned what are the 5 mega-projects in Lima and other regions of Peru that could benefit with this new mechanism:

• The New Central Highway: A megaproject that will connect Lima with the center of the country. This mechanism will expedite the sanitation of the large number of properties required along its extensive route in the mountains.
• Line 2 of the Lima Metro: Our first subway train in the capital, whose pace of progress depends directly on the rapid delivery of areas on the surface to build stations and ventilation shafts.
• The Peripheral Road Ring (Lima and Callao): A huge highway designed to connect Ate with Callao in half an hour. This project has faced very complex delays in its land expropriation stage, which can be overcome with this new approach.
• Expansion of the Jorge Chávez International Airport: A vital work for air connectivity in the Callao region, which constantly requires managing the timely release of large surrounding areas.
• Majes Siguas II (Arequipa) and Chavimochic III (La Libertad): Gigantic agricultural and irrigation projects in the south and north of the country. As they involve huge areas of land, they will benefit substantially from group or sector sanitation.

In an interview with RPP, Christy García GodosManager of Institutional Relations of Sociedad Concesionaria Anillo Vial, declared that the State only owns 25% of the 2,350 properties necessary for the Peripheral Road Ring megaproject. “We are already carrying out the definitive engineering studies, the environmental impact study and also doing the entire property release process. We are in the pre-construction phase,” he told RPP.

He added that the goal is to begin the execution of the works on section 1 in the first quarter of 2027 and section 3, towards the third quarter of the same year.

The rule in detail

Christian Collantes Rojasa lawyer specializing in construction law and founding partner of STC Abogados, explained to El Comercio that this measure is not a new way of expropriating, but rather a new alternative procedure within the existing legal framework.

“Instead of managing property by property to have land available for an infrastructure project, several properties are grouped within an area or block and the entire group of land is released together. This serves to address one of the biggest problems faced by public works: the delay and high costs when negotiating one by one with each owner,” he explained.

In this way, the State will be able to delimit an area or polygon of intervention, called a block. “To determine the block, the similar characteristics of the type of soil must be considered, among others, in accordance with the provisions of the special regulations on the matter, similar zoning characteristics, the existence of technical and/or legal limitations and/or restrictions, or other conditions and/or restrictions that the Active Subject determines at its discretion.“, reads the standard.

The State will publish a pre-registration in the official newspaper El Peruano with the identification of the properties, the affected areas in square meters of each property and the names and surnames or company name of those affected.

Owners who do not appear in the list will have a period of ten business days to request any correction or rectification of any omission, as well as their incorporation before the issuance of the final register.

• Block publishing: The State will publish in the official newspaper El Peruano, in a newspaper with greater circulation and in regional media the list of properties that are part of the block.
• Census: Personnel from the State or the concessionaire will visit the area to verify who lives there and what legal conditions the property is in.
• The ‘letter of intent’: Owners will receive formal notification at their address.
• Quick response: The owners have 10 business days to respond if you accept direct treatment.

Collantes highlights public participation, as it will allow for greater transparency in agreements with owners and not relegate their fundamental rights.

On the other hand, Barahona highlighted a legal mechanism that provides greater protection for the work area. “To avoid last minute interference that delays projects, the figure of preventive annotation in the Public Registries in favor of the State is established.. Its direct effect is to force public service companies, individuals and other entities to refrain from installing or requesting new infrastructure in the area where the work will be carried out.”, he highlighted.

What financial bonuses can I receive if I agree to sell my property?

Collantes highlighted that the rule establishes clear economic incentives for owners to promote the voluntary agreement:

• Additional 20%: If the owner accepts the direct deal, they will receive an additional 20% of the appraisal value.
• Additional 30%: if the owner delivers the property early, he will receive 30% of the appraisal value.

Will my property and that of my neighbors on the same block have the same value?

The construction law specialist explained that not necessarily all properties in the same block will have the same value.

“There must be an examination in which an appraiser determines the value of each property even though they are part of the same block. Not all of them will be worth the same, because not all buildings are made with the same material, have the same amount of square meters, among other issues.“, held.

Therefore, for the block release to work, Collantes stated that there must be transparency, absolute certainty of value and fair compensation.

“The real impact of this rule will actually depend on the capacity for execution, coordination and synergies between various public entities. Not only are the Ministry of Transportation and Communications and the Ministry of Economy and Finance involved, but also the Superintendence of National Assets, the municipalities depending on the location of the block of properties. This is what will avoid conflicts and delays,” he asserted.