Thiruvananthapuram: Promises of adequate compensation have not so far impressed the people likely to be affected by the SilverLine Project of the Kerala Rail Development Corporation Ltd (K-Rail). Even as protests intensify and spread across the state along the tentative route of the rail corridor, the authorities have come up with a "deferred payment scheme" for those who have to part with land for the project.

Under a compensation scheme being drawn up, landowners would be allowed to park a portion of their compensation amount with K-Rail in lieu of regular annual returns in the form of interest which is fixed on the basis of the market rate of the land from time to time.

The authorities are mooting this idea since it would help cut initial expenses for the project. Even otherwise a large amount of money has to be shelled out by K-Rail Limited as interest on a yearly basis under the scheme for those eligible for compensation.

Though it was projected in the feasibility study report that 40 percent of the compensation amount can be retained by K-Rail Limited in this way, the Detailed Project Report (DPR) estimated that only 11.41 percent of the total compensation amount could be raised in this manner.

Estimated compensation

The total amount to be spent for compensation is estimated to be Rs 13,362 crore. The DPR expects that of this total amount, Rs 1,525 crore (11 percent) can be collected through the deferred payment scheme. The recommendation contained in the feasibility report suggested an annual interest of 8.4 percent under this scheme. But the DPR is keeping silent on the matter. It is said that tax exemption will be given for the amount to be deposited under this scheme.

Though it was announced that the compensation rate for the acquired land would be four times the market value, this would not be applicable everywhere in reality since there is another clause that only those who hold land in places that are situated beyond 40 km from the town limit are eligible for such a compensation package.

There will be five slabs for fixing the market value for the acquired land in rural areas. Municipal corporations and municipalities are classified as urban areas and the compensation rate there would be two times higher than the market value.

How to arrive at compensation amount

In rural areas, the multiplying factor based on the market value of the land is fixed in the range of 1.20 to 2. Up to 10 km after the urban limit, the multiplying factor will be 1.2. Up to 10-20 km, it will be 1.4, up to 20-30 km, it is 1.6, and up to 30-40 km, it is 1.8. Beyond this limit, the multiplying factor will be 2.

As per the methodology planned, the market rate will be fixed by multiplying the fair value of the land by the multiplying factor. This amount will be given as compensation to the landowner.

In urban areas, the multiplying factor will be 1. In all urban areas, the same yardstick will be followed for fixing the compensation. But if there are buildings and trees in the acquired land, there will be changes in the compensation amount.