Power ministry revises compensation guidelines for transmission line right of way

The Ministry of Power has updated its guidelines for compensation related to the right of way (RoW) for transmission lines. The aim is to bring uniformity, streamline procedures, and ensure timely resolution of land acquisition issues in transmission projects.

New compensation structure

The revised guidelines introduce a two-part compensation mechanism. Landowners will receive:

• 100% compensation for the tower base area based on land value.
  
  
• Pro-rata compensation for the line corridor, depending on the extent of land impacted.
  
  

The land value will be determined using the higher of either the notified circle rate or the average sale deed rate of similar land in the area from the past year. These guidelines will apply only to future projects where physical work has not yet started and compensation has not been disbursed.

Addressing compensation concerns in urban areas

To tackle concerns over inadequate compensation for Inter-State Transmission System (ISTS) lines—especially in urban areas where circle rates are lower than market rates—the government has introduced supplementary measures.

A Market Rate Committee (MRC) will determine land value. This committee, chaired by the District Collector, will include landowner representatives and the transmission service provider. Two independent valuers, empaneled by the Insolvency and Bankruptcy Board of India (IBBI), will assess the market rate. If their valuations differ by less than 20%, the average will be taken. If the difference is greater than 20%, a third valuer will be engaged. The transmission company will bear the valuation costs.

Compensation rates

The compensation for RoW will vary by location:

• Rural areas: 30% of land value
  
  
• Municipal corporations and metropolitan areas: 60% of land value
  
  
• Other urban areas (municipalities, nagar panchayats): 45% of land value
  
  

Implementation and tariff adjustments

Construction can proceed even if compensation is pending, as long as the MRC finalizes the market rate within a month. States can either adopt these guidelines or modify them if they do not already have a framework in place.

Additionally, any extra compensation costs due to these new rules will qualify for tariff adjustments under the “Change in Law” clause of the Central Electricity Regulatory Commission (CERC).

With these updates, the government aims to ensure fair compensation, particularly in urban areas where landowners face higher opportunity costs due to restricted land use.