New Delhi: The implementation of the revised Land Acquisition Bill is likely to prove a double whammy for the government and people alike. Though the proposed change is likely to bring a smile on the faces of land owners but at the same time it is expected to make power plant installation process a costly affair.

Already suffering from shortage of coal, the power plants would have to shell out 25 percent more and may eventually lead to rise in power tariffs giving a big jolt to the common man’s pocket.

According to the Power Ministry, the cost of installing a new power plant of 1,000 mw capacity is about Rs 4,000 crore which may escalate to 4800 crore after the new Land Acquisition Bill.

Meanwhile, the Power Ministry is preparing its analytical report on the affects of the revised Bill to be sent to the Prime Minister Office.

The Power Ministry believes that the implementation of the revised Bill may prove to be a hurdle for the upcoming power projects in the 12th Five Year Plan starting from April 2012.
Moreover, the public company NTPC may be the worst sufferer of the new Bill. At present, it owns power plants of 34,854 mw capacity and aims to increase it to 1,28,000 mw by 2032.

NTPC spends about Rs 300 crore for land acquisition for power plant of 1000 mw capacity which may rise to 1200 crore after the implementation of the new bill.

However, the additional rise in expenditure to bear the burden of providing one-time compensation to land owing families, employment and pension will hit the power companies hard. This will collectively result in the setting up of power companies costlier by 25 percent.

In the 12th FYP, the government wants to increase its power capacity by one lakh mw while work has already started to achieve capacity of 65,000 mw.  The land acquisition process has not yet taken off for the remaining capacity which may come as an expensive change.