The government has started work on amending the Land Acquisition Act to accommodate a provision of compensation based on market rate.

Currently, the government is being forced to pay much higher than the market rate for land acquired for several infrastructure projects. Many transmission line, irrigation and road projects have been affected by land acquisition-related problems.

“Land acquisition-related problems have emerged as one of the biggest problems for development projects,” said Finance Secretary YubaraJ Bhusal. “That’s why we are in the process of amending the Land Acquisition Act with a clear provision that the land would be acquired at market price.”

Bhusal said the budget making and the Act amendment processes were being carried out simultaneously. “We plan to finalise the amendment to the Act by the time the budget is presented,” he said.

In March, Madhu Marasini, chief at the ministry’s international economic cooperation coordination division, had expressed his frustration on Twitter over the hefty compensation demanded by Sindhuli locals for 3.6 hectares of land that falls under the Khimti-Dhalkebar Transmission Line Project.

“Extremely disheartened. Rs 100 million has been sought from the World Bank as compensation for 3.6 hectares of land in Sindhuli for transmission line. How can I ask for assistance,” Marasini had twitted.

Other projects, including 132KV Thankot-Chapagaun-Bhaktapur Tranmission line, Kabeli corridor, Pokhara Regional International Aiport, Fast Track Project and Shikta Irrigation Project, are also facing land acquisition-related problems.

The government’s common minimum programme has also stated it would introduce a strong law to discourage obstructions in the construction of transmission lines in the name of land compensation or other pretexts. The current Act does not have a clear compensation provision.

The provision will be applicable not only to land acquired for development projects, but also for the purpose of collateral valuation by banks and financial institutions to provide loans.

Currently, a team led by the chief district officer (CDO) and represented by the chief of Land Revenue Office, the project in-charge (if the land is being acquired for a project), an officer designated by the CDO (if the land is being acquired for any other purpose) and an official from the District Development Committee, dominies the value of the land to be acquired.

“We are going to add representatives from banks and district chambers of the Federation of Nepalese Chambers of Commerce and Industry to ensure the valuation will be the same for banks too,” said Bhusal.

The government has also initiated consultations with experts on the proposed provision. According to former finance secretary Rameshwor Khanal, who was also consulted on the matter, said discussions were under way on a provision that if 70 percent of the people whose land would be acquired agree to the compensation, rest of the households also have to agree.

Experts say there is a trend of showing higher valuation of land, sometimes by influencing the CDO.

“Particularly, we suggested a compensation rate approved by 70 percent of the people should be made final,” said former NPC vice-chairman Shankar Sharma.

source: the kathmandu post,8 june 2014