Should this be capitalised or expensed?

Hello, lets say a plant is being constructed and pipes need to be placed underground. Where the pipes are being placed there needs to be a safety zone running alongside these pipes. However, within this zone there are residents who have erected houses illegally. The company who owns the plant now has to spend lets say 1 million to relocate these residents who have been occupying the space for quite a long time. My question is should that 1 million be expensed or capitalised? I personally think it should be expensed since whether the people move or not the plant can still be built thereby obtaining economic value. However I’m being told that it should be capitalised since it would fall under site preparation costs.