MoP Issues Supplementary Rules To Refine RoW Compensation

Transmission

The Ministry of Power (MoP) has released supplementary guidelines for awarding compensation related to Right of Way (RoW) transmission lines. These guidelines aim to address transmission-related challenges in both urban and rural areas by refining the compensation structure.

As per the latest guidelines, compensation will be based on Circle Rates, Guideline Value, or Stamp Act Rates of the land. However, if the market rate exceeds these standard rates, the land value will be determined based on the prevailing market rate, ascertained by the District Magistrate, District Collector, or Deputy Commissioner in a manner specified by the respective State Government.

Union Minister for New and Renewable Energy, Prahlad Joshi, recently shared data, that the Right of Way (RoW) compensation guidelines were initially developed to ensure the timely development of power transmission infrastructure. This was developed to evacuate 500 GW of renewable energy by 2030. The Ministry of Power revised the RoW guidelines in June 2024, linking compensation to the market value of land. For the tower base area, compensation was been increased from 85% to 200% of the land value, while for the RoW corridor, it has been raised from 15% to 30%.

Key Issue

MoP’s latest notification, many States have yet to specify a method for determining market rates. This has led to concerns among landowners that compensation is still being offered at lower Circle Rates, significantly below actual market values.

The problem is particularly severe in urban and semi-urban areas, where District Collectors struggle to establish a fair market rate. While land under RoW corridors in rural areas can still be used for agriculture, urban and urban-planning areas often face land-use restrictions, preventing development. This has made the 30% RoW compensation for rural areas inadequate for urban and urban planning zones, where landowners experience higher opportunity costs. After careful review, the Central Government has introduced supplementary guidelines to standardize the market rate determination process for RoW compensation in ISTS (Inter-State Transmission System) projects.

The regulation clarified, “These supplementary guidelines apply to ISTS transmission lines in cases where landowners dispute compensation due to Circle Rates being lower than Market Rates.” MoP added that State Governments may either adopt these guidelines in full or introduce modified versions as per their requirements. The guidelines are particularly relevant in cases where States have yet to define a process for determining market value.

Land Valuation Methodology

The MRC will determine the land market rate based on the following methodology:

• If the difference between the two valuations is less than 20% of the lower value, the average of the two valuations shall be taken as the reference market rate.
• If the difference exceeds 20%, the MRC may negotiate to determine a reference market rate.
• If negotiations fail, the MRC shall engage a third valuer, and the reference market value shall be determined as the average of the two closest valuations.
• The assessed reference market rate shall serve as the basis for market rate determination by the MRC.
• The professional fees/charges of the land valuers shall be borne by the TSP and included as part of the RoW compensation cost.

Compensation Rates

The rule mentioned that the compensation for the tower base shall be as per RoW Guidelines dated June 14, 2024.  Whereas, the Compensation for the Right-of-Way (RoW) corridor for ISTS lines will be awarded at 30% of land value in rural areas, 60% of land value in municipal corporations and metropolitan areas notified by the State Government and 45% of land value in municipalities, nagar panchayats, and all other urban-planning areas notified by the State Government