NZIER report on compensation for transmission infrastructure
NZIER report on compensation for transmission infrastructure
NZIER report on compensation for transmission infrastructure
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1.3 Problem definiti<strong>on</strong><br />
Many landowners are unhappy with the amount of compensati<strong>on</strong>, and payment<br />
methods, <strong>for</strong> transmissi<strong>on</strong> <strong>infrastructure</strong> built <strong>on</strong> their land. 8 Three key issues have<br />
been identified by landowners and Federated Farmers:<br />
Compensati<strong>on</strong> <strong>for</strong> transmissi<strong>on</strong> <strong>infrastructure</strong> does not accurately reflect the cost<br />
of land and additi<strong>on</strong>al financial and time costs <strong>on</strong> farming imposed by the<br />
<strong>infrastructure</strong> (or negative externalities such as impact <strong>on</strong> views and health<br />
c<strong>on</strong>cerns)<br />
Easements benefit Transpower by reducing the cost of transmitting electricity, yet<br />
landowners, who have their property taken <strong>for</strong> these easements, do not benefit<br />
(and are possibly left worse off)<br />
Transpower <strong>on</strong>ly pays compensati<strong>on</strong> in a lump-sum whereas some landowners<br />
would prefer to receive rental or periodic compensati<strong>on</strong> which adjusts with<br />
changes in land value or operati<strong>on</strong>al costs.<br />
These issues are c<strong>on</strong>cerned with both the efficiency and equity of compensati<strong>on</strong>. An<br />
accurate appraisal of all relevant easement costs is needed <strong>for</strong> the sake of efficiency<br />
(the first of the above three issues). How any surplus is shared between Transpower<br />
and landowners, and the opti<strong>on</strong> <strong>for</strong> periodic payments are equity arguments,<br />
although outcomes to date appear to have been determined by relative negotiating<br />
powers.<br />
8 See <strong>for</strong> example, Kissun. S Pyl<strong>on</strong>s cloud dairy future in Dairynews June 2009 pg 5.<br />
<str<strong>on</strong>g>NZIER</str<strong>on</strong>g> – Compensati<strong>on</strong> <strong>for</strong> transmissi<strong>on</strong> <strong>infrastructure</strong> 9