Land price

One of the major cost considerations for any infrastructure project in Kerala is the land price and the
Rehabilitation prices. The Land and R&R cost is determined by “THE RIGHT TO FAIR COMPENSATION AND
TRANSPARENCY IN LAND ACQUISTION., REHABILITATION and RESETTLEMENT ACT 2013, herein referred
to as LA Act 13. The LA Act 13 compensates the land owners for Land, buildings, trees, livestock and crops
as per THE FIRST and SECOND schedule and the THIRD schedule (provision for infrastructural amenities).

As pe the LA act 13, the Final Award = [{Compensation} + {Solatium (100% of the calculated
compensation)}]

The Compensation = [{Market Value (determined as per the section 26)} * {Multiplication factor (1.00 to
2.00 for rural areas depending upon the distance from urban areas and 1.00 for urban areas)} + {Value of
assets (to be determined as per the section 29)}]. Here, Solatium means a gift or added compensation.

The basis of the compensation amount is to arrive at the “market price” of the land and is done as per
Clause 26 of the act at the district level, chaired by the District collector. Then this is confirmed at the
state level by a committee under the chairmanship of the Chief secretary.

Gist of Clause 26 is that the collector shall adopt the higher of (1) the market value specified in the Indian
Stamp act, 1899 (2) average sale price of similar type of land situated in the nearest village and (3) the
consenting amount of compensation as agreed upon under sub section (2) of section 2 in case of
acquisition of lands for private companies or for public private partnership projects.

The market value arrived at thus above is multiplied by a factor 1 to 2 based on the distance of project
form the urban area, as may be notified by the appropriate government i.e. GOK for this project. For this
project, the following multiplication factors is considered, 1 for urban area, 1.2 for project area between
1- 10 Kms from urban area and 1.4 of project area between 10- 20 Kms from Urban area. Then a solatium
of 100% of the compensation amount is added to arrive at the final compensation.

At this stage of Feasibility report, the average market price of various categories of land was arrived at
by enquiry with the NHAI authorities/ Deputy collector (LA) office, who are in the process of acquisition
of land as per the LA Act 2013, in different parts of Kerala. This the consultants would provide a realistic
value of the Land compensation and award for this feasibility report stage, when the registration prices
for the villages are not available.
Based on the NHAR experience, land cost or final award as per the LA Act 2013 adopted for the project is
given in the table below. The cost is given in lakhs per cent for easy understanding of the rate. Then the
market price which was used for arriving at these LA land final award adopted, is worked backwards from
the LA 2013 value and given in column (v). This is done as a cross check for the rate adopted and the
market price base is found to be in order with the general setting of Kerala.

LAND COST ADOPTED FOR PROJECT (Column iii) and BASE MARKET PRICE DERIVED BY APPLYING LA
2013 rules (Column (v)
Item Type of land Land final award or Price before Market value before the
land cost as per LA solatium multiplication factor (1.4 for
2013 adopted for Item (1), 1.2 for item (2 &3),
this project 1 for others)
(i) (ii) (iii) (iv) (v)
A (cost per cent in B=A/2 C= B/multiplication factor
Lakhs) (cost per cent in lakhs)
1 wet land/ land with no 3.00 1.50 1.07
road connectivity
2 Dry land 7.00 3.50 2.92

3 small towns 10.00 5.00 4.17

4 Mid -Large towns 20.00 10.00 10.00

5 CITY center Like 60.00 30.00 30.00

Ernakulam, Kozhikode
(which is rarely required
for the project)

As a matter of another check, the RFCTLARRA, 2013 compensation is widely conceived as 04 times the
market value for acquisition in rural areas and 02 times the market value in urban areas along with
value of assets as determined in the Act1. So, the above LA 2013 rates adopted for this ProJet is also
generally in line with the above consideration.

Based on the above rates adopted for the various categories of land, the cost per Km of the 25-meter
project is given below.

Calculation of Average price of land for the project corridor for arriving at LAND COST (FINAL AWARD)
Sl NO Type of land Land Rate adopted Cost per Km for 25 wide
(cost in Lakhs per corridors (in crores)
cent)
1 wet land/ land with no 3.00 18.53
road connectivity
2 Dry land 7.00 43.24

3 small towns 10.00 61.77

4 Mid -Large towns 20.00 123.55

5 CITY center Like 60.00 370.64

Ernakulam, Kozhikode
(which is rarely used for
the project)

At this feasibility stage, the alignment is considered passing through wet land/ land with no road
connectivity (50%), Dry land (30%), small towns 10% , Mid – large towns 5% and Government land 5%.
Based on this categorization of land parcels for the project, the approximate land cost or FINAL AWARD
cost is given below.

APPROXIMATE LAND COST (FINAL AWARD) FOR PROJECT

1 wet land/ land with no road connectivity 50.00% 4,883.23 Crores

2 Dry land 30.00% 6,836.53 Crores

3 small towns 10.00% 3,255.49 Crores

1
INSIDE RFCTLARR ACT 2013, State wise analysis of state land acquisition rules, notifications, draft acquisition rules
& new state land acquisition bills by AMIT KUMAR for National alliance for peoples movements ( year 2016)
 4 Mid -Large towns 5.00% 3,255.49 Crores
95.00% 18,230.74 Crores
Government land 5%

R& R Cost: Added to this is the R& R cost for the project. For this Feasibility report, the R&R cost is taken
as 10% of the Land cost (FINAL AWARD) taking cue from the G.O. (P) No. 470/2015/RD dated 19/09/2015,
vide para 14. So, the R&R cost is taken as 1823.07 Crores for this project.

LAND & R&R cost:

The total land and R&R cost for this project is thus calculated as

1 Land cost (FINAL AWARD) 18,230.74 Crores

2 R&R cost@ 10% land cost 1,823.07 Crores
Total cost 20,053.81 Crores