Indian Electrical Equipment Industry Mission Plan 2022

Indian Electrical Equipment Industry Mission Plan 2022 Recommends Acquisition of Land by the State Governments for Power Projects

The ˜Indian Electrical Equipment Industry Mission Plan 2022™ points to the fact that one of the major reasons for the shortfall in planned versus achieved capacity addition in power generation is the problem of land acquisition. 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 & Distribution (T&D) equipment industry, the Mission Plan 2022 document says. It further points that the acquisition of government forest and private land is very cumbersome and a long drawn process. The existing Land Acquisition Act has several flaws. In case of power plants awarded to IPPs (Independent Power Producers), land is to be acquired by them. Because of the outdated Land Acquisition Act, private developers face a number of problems so that there is a gap of years between the time the project is conceived, tendered and awarded and land is acquired. During this period, the cost of construction, cost of power plant equipment, etc., shoots up and at times, the project itself becomes unviable at the quoted tariff.

In the light of this, the ˜Indian Electrical Equipment Industry Mission Plan 2022™, which was recently launched by Minister of Heavy Industries & Public Enterprises, Shri Praful Patel, recommends enactment at the earliest of a Land Acquisition Act, which will make land acquisition process fair and fast. The Mission Plan also says that in the light of the fact that the State Governments are able to generally acquire land much quicker for the development of industrial estates, SEZs, Metros and highway projects and power plants as people do not raise many objections, hence the State Government should, inter alia: (i) Acquire the land (government / private / forest) for the power project being constructed by the IPP (like they are doing for other purposes) and also negotiate at its own terms with land owners as per the policy adopted by respective State Governments; (ii) Solve issues of resettlement and rehabilitation associated with projects through the developer. Once the State Government decides on the land compensation and R&R policy for the project site, the cost of same with overhead cost and escalation provision, etc., can be indicated in the tender so that developers can 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 the additional land should be acquired by the developers on their own.

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