Land costs may bite Bharatmala: Icra

Mumbai: Land acquisition is likely to become a major hurdle for the Centre’s ambitious Bharatmala project that involves building around 83,000 km of national highway by FY2022.

According to Icra, fragmented land holdings, lack of clear land titles, dependence on local authorities, inadequate land acquisition plan at the time of preparing detailed project reports and lack of methodology for compensation are the major difficulties faced during land acquisition.

In about 80 per cent of the delayed road projects, the reason for delay is attributable to unavailability of right of way, which is the responsibility of the awarding authority.

Another major challenge for Bharatmala according to Icra is compliance to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 which led to increase in compensation by four times the market value in rural areas and twice the market value in urban areas.

This has resulted in a steep increase in acquisition cost to around Rs 2.50 crore per hectare currently (as against Rs 0.90 crore per hectare in FY14). Land acquisition cost as a percentage of total project cost for the NHAI projects was at 9 per cent in 2009, which increased to 16 per cent in 2012.

For some of the recent expressway projects, the land acquisition cost is estimated to be in the range of 37-55 per cent of total project cost.

The total land requirement for Phase-I is estimated to be in the range of 70,000-75,000 hectares.

“Securing such huge land parcels by complying with the RFCTLARR Act in its current form is going to be a challenge. The government made an unsuccessful attempt to amend the Land Bill in 2015 by easing land acquisition norms for infrastructure projects (including PPP). Therefore, the success of the programme critically hinges on the pace of land acquisition along with other requisite approval,” ICRA said.