New Delhi: In an attempt to address a pervasive issue holding up power transmission projects in the country — Right of Way (RoW) — the Ministry of Power has come up with guidelines to determine compensation for laying Inter-State Transmission System (ISTS), linking the compensation to market rate of land. According to the “RoW guidelines,” the government has proposed a mechanism for computing compensation value in cases where the market rate of land exceeds the circle rate. The circle rate is the minimum price at which a property can be registered during a transaction.
According to the old guidelines, compensation is ordinarily based on the Circle rates/Guideline value/Stamp Act rates. In such instances, the land value is determined based on the prevailing market rate as ascertained by the District Magistrate/District Collector/Deputy Commissioner in the manner as may be specified by the State Government. However, many states are yet to specify the manner of determination of market rate. In such states, land owners have raised concerns that compensation is still being proposed at unacceptable circle rates which are significantly lower than market rates, said the Ministry of Power. Therefore, a new set of guidelines for determining market rate of land in such cases was required. “This issue is more pronounced in urban and semi-urban areas, where District Collectors face difficulty in arriving at a fair market rate,” said the ministry.
The guidelines will only apply to cases where landowners have objected to the compensation being offered because circle rates are lower than market rates. “State governments may adopt these guidelines in their entirety or issue their own modified guidelines,” said the ministry. The government has directed the formation of a Market Rate Committee (MRC) which will be responsible for determining the market rate of land based on the valuation by independent land valuers. This committee will be chaired by the District Magistrate or District Collector or Deputy Commissioner and will have a representative of land owners and of ISTS Transmission Service Provider (TSP) as Members.
The MRC will appoint two land valuers — one nominated by the TSP and another nominated by the representative of the landowners. The land valuers must be empanelled with the Insolvency and Bankruptcy Board of India (IBBI) and must be from the same state or from adjoining states, in case an adequate pool of valuers is not available within the same state. The ministry has proposed a methodology for the calculation of market rate of land.
The compensation rates being offered would remain the same as was being offered under the previous version of the RoW guidelines dated June 14, 2024. Landowners will get 30 percent of the land value in rural areas, 60 percent of the land value in municipal corporations and metropolitan areas notified by the state governments and 45 percent of the land value for municipalities, nagar panchayats and all other urban planning areas notified by the state governments.
According to industry experts, RoW and compensation issues are one of the major problems delaying power transmission infrastructure in the country. The construction of ISTS infra needs to be speeded up to keep pace with renewable energy projects coming up in various parts of the country, which usually have a gestation period of two-three years. Transmission projects, on the other hand, take about four-five years. Under the new guidelines, the ministry has also directed the stakeholders to complete the determination of market rate for compensation within a month from the date of application by the TSP to speed up transmission projects.
