Electricity transmission lines are vital for delivering power, but their presence on or near a property can significantly impact land use and market value. In Nepal, valuers must take into account the Right of Way (RoW) of both high-tension and medium-voltage electricity lines when conducting property valuations. This article provides a comprehensive overview of RoW requirements and their implications for real estate valuation.
Understanding Right of Way (RoW)
The Right of Way is a legal provision that allows utility companies—such as the Nepal Electricity Authority (NEA)—to install and maintain power lines over privately owned land without acquiring ownership. Although the landowner retains title, strict limitations are placed on how the land within the RoW can be used.
Right of Way Widths by Voltage Level in Nepal
Different voltage levels require varying clearances to ensure safety, ease of maintenance, and protection of life and property. The following table outlines typical RoW widths applicable in Nepal:
| Voltage Level | Clearance on Each Side | Total Right of Way Width |
|---|---|---|
| Up to 11 kV | 1.25 meters | 2.5 meters |
| 11KV to 33 kV | 2 meters | 4 meters |
| 66 kV | 9 meters | 18 meters |
| 132 kV | 9 meters | 18 meters |
| 220 kV | 15 meters | 30 meters |
| 400 kV | 23 meters | 46 meters |
Implications of RoW on Property Valuation
1. Land Use Limitations
Construction of buildings, tall trees, and other permanent structures is prohibited within the RoW. This permanently reduces the usable area of a land parcel, especially in residential or commercial zones.
2. Reduced Property Demand
Properties located directly under or adjacent to transmission lines often suffer from lower demand due to health concerns, electromagnetic radiation fears, visual obstruction, and noise from power lines.
3. Difficulty in Securing Loans
Land affected by RoW is often rejected by banks for collateral purposes. This financing barrier further lowers the market utility and overall demand for such properties.
4. Compensation Provision
Currently, Nepal’s legal framework provides 10% of the market value as compensation for land affected by RoW, in accordance with the Land Acquisition Act, 1977. However, stakeholders frequently argue that this amount is not enough to offset the long-term disadvantages caused by land-use restrictions.
5. Depreciation and Valuation Adjustments
Valuers typically apply depreciation factors in the range of 10% to 30%, depending on the voltage level and extent of RoW impact. For example:
- 11 kV and 33 kV lines may cause 5–10% depreciation in rural areas.
- 66 kV and 132 kV lines may result in a 15–20% reduction.
- 220 kV and 400 kV lines may justify a 25–30% reduction, especially in urban or residential zones.