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MOSL: UTILITIES-Right of Way remains a major challenge

UTILITIES: Right of Way remains a major challenge

 

We attended Powerline’s conference on ‘Transmission Lines, Substation & Towers’ to understand the execution environment for transmission projects. In recent times, project execution timelines have shortened (~18 months) to match with planned renewable capacities. Our interactions suggest that such timelines are aggressive, leaving little scope for errors. While technological developments and early planning would support execution, obtaining (a) Right of Way (RoW) and (b) statutory clearances remains the major hindrance. Key takeaways from the conference: 

Shortened execution timelines necessitate early planning

Given the short gestation period of renewables and the strong emphasis on their commissioning (66.5GW envisaged by Dec’21), the execution timelines for the associated transmission infra projects have shortened. The recent bids have indicated timelines of ~18 months. Accordingly, completing checks during the RfQ and bid stage has become crucial. In fact, project developers noted that the work related to design planning/testing and foundation is being prepared at an earlier stage (before the SPV takeover). While projects can be commissioned in the stipulated timeframe, developers believe that it is imperative to remain ahead of schedule given little room for errors. 

Obtaining RoW is becoming difficult though

RoW, however, continues to be a major challenge. Power Grid (PWGR) noted that obtaining RoW is becoming increasingly difficult, given (a) high population density, (b) use of land for infra projects and (c) locals demanding their rights. Besides, obtaining statutory clearances (forest, environment) has become more stringent. We note: a MoP guideline in 2015 notified the compensation payable towards (a) the tower base area (at 85% of land value) and (b) RoW corridor (max. 15% of land value). However, project developers noted that it is not yet a policy/an act. Given the lack of uniform policy, states remain free to deliberate on the compensation. Further, at times, ascertaining the land owner becomes an issue, leading to delays in disbursement.