Suruchi Kotoky and Ishaan Chopra
The Ministry of Power recently, on June 14, 2024, issued revised guidelines for determining the amount of compensation regarding the right of way (“RoW”) for transmission lines under Section 67
(Provision as to opening up of streets, railways, etc.) and Section 68 (Overhead Lines) of the Electricity Act, 2003, read with provisions under the Indian Telegraph Act, 1885 (“Guidelines”). These are in addition to the compensation for normal crop and tree damages and supersede all previous guidelines on the subject matter.
What’s New ?
Right-of-way (RoW) issues have long been a material concern for the infrastructure industry, particularly the renewable energy sector in India, along with the challenges related to connectivity
and evacuation infrastructure. This has often caused uncertainties in cost estimation, project timelines and execution. These Guidelines are a guidance note aimed at reducing these challenges, particularly by focusing on the compensation process during the construction of transmission lines. By standardizing the compensation calculation method, the Guidelines aim to bring consistency across various projects and regions. These Guidelines may not only mitigate commercial risks to a certain extent, but will also be helpful for the compensation process. These Guidelines will indeed be helpful for the smoother implementation of renewable energy projects in India and in supporting the country's sustainable energy goals.
The Guidelines are to be adopted by States/UTs, either in their entirety or with modifications. In the absence of state-specific guidelines, these Guidelines shall apply.
Applicability: Compensation is payable only for transmission lines with a tower base voltage level of 66 kV and above.
Government Authority: The District Magistrate/District Collector/Deputy Commissioner will be the authority responsible for determining compensation.
Determination of Compensation: Compensation shall usually be based on the circle rate/guideline value/stamp act rates of the land. In the event that the market rate exceeds the circle rate/guideline value/stamp act rates of the land, the land value shall be determined based on the prevailing market rate as ascertained by the competent Government Authority and in the manner specified by the State Government.
Tower Base Compensation: Compensation for the tower base area, as per the prescribed specification, shall be 200% (two hundred percent) of the land value.
RoW Corridor Compensation: Compensation for the RoW corridor, as defined under the Central Electricity Authority (Technical Standards for Construction of Electrical Plants and Electric Lines) Regulations, 2022 (“CEA Regulations”), shall be 30% (thirty percent) of the land value, with no construction activity permitted within the RoW of the transmission line. States/UTs are empowered to decide a higher rate depending on the area and urgency of the work.
Alternate Compensation: In areas where landowners have accepted alternate compensation by the concerned Corporation/Municipality under the Transfer of Development Rights (TDR) policy in the State/UT, the licensee/utility shall deposit the compensation amount, as determined under the Guidelines, with the concerned government authority.
Areas with RoW Constraints: The Guidelines provide for the cost comparison matrix of various technologies stipulated under the CEA Regulations, which can be used in areas with RoW constraints. This matrix will enable the relevant stakeholder to choose the most cost effective technology for their project.
Landowner Identification: The names of landowners whose land falls within the transmission lines’ RoW will be documented during a check survey, and as per the process given under the CEA Regulations.
Compensation Payment: There will be a one-time, upfront payment of compensation. Wherever possible, payment of compensation will be through digital means such as Aadhaar Enabled Payment System (AEPS) and Unified Payments lnterface (UPl).
Standard Operating Procedure (SOP): An SOP has also been annexed at Annex III with the Guidelines for the reference of States/UTs and transmission developers.