Empowering MSMEs with News & Insights

Problems of land acquisition major bottlenecks for new power plants

Updated: Aug 02, 2013 06:12:55pm
image
New Delhi, Aug 2 (KNN) The problem of land acquisition has been identified as one of the major reasons for the shortfall in the capacity addition to power generation.

“Half of the loans sanctioned for power projects remain unutilised because of delays in land acquisition, forest and other clearances. As a result, banks are not prepared to increase their exposure to the power sector, which leads to further delays in project completion. This negatively impacts the growth of Boiler Turbine Generator (BTG) and Transmission and Distribution (T&D) equipment industry,” said a notification from the Indian Electrical Equipment Industry Mission Plan 2022 of the government. 

The Mission which was launched by the Ministry of Heavy Industries and Public Enterprises has recommended earliest enactment of the Land Acquisition Bill which would make the process of acquiring fair and fast.

It said, the acquisition of government forest and private land is very cumbersome and a long drawn process. The existing land acquisition act has several flaws.

There is time gap between the projects conceived, tender awarded and land acquired. As a result of the delay, cost of construction, power plant equipment, etc., shoots up and at times the project itself becomes unviable at the quoted tariff. Due to the outdated Act, private developers face such problems.

Further it said, the state governments are able to acquire land much quicker for the development of industrial estates, metros, highway projects and power plants as people do not raise objections.

It recommended that the state government should acquire the land for the power project being constructed by the independent power producers and also negotiate at its own terms with land owners as per the policy adopted by respective state governments.

They should solve issues of resettlement and rehabilitation associated with projects through the developer.

Moreover, once the state government decides on the land compensation, resettlement and rehabilitation policy for the project site, the cost of same along with overhead cost and escalation provision, etc., can be indicated in the tender.

This will enable developers to pay the state government upfront on being awarded the power project.

The Mission Plan further suggests that if a developer wants to acquire more land than that estimated by Central Electricity Authority (CEA) then additional land should be acquired by the developers on their own. (KNN/GUNJ)

COMMENTS

    Be first to give your comments.

LEAVE A REPLY

Required fields are marked *