Land acquisition for high voltage transmission lines : the protection of private land sought for transmission lines : an analysis of the change from protection by a liability rule to protection by a property rule

Abstract

This project analyses two mechanisms for acquiring land for high voltage transmission lines - that in place prior to corporatisation in 1987 and the one implemented since. The pre corporatisation mechanism protects private land sought for transmission lines by a property rule (land can be acquired without the consent of the landowner). Under the post corporatisation mechanism private land is protected by a property rule (acquisition can only take place with landowner consent). It is shown that the change from the protection of private land by a liability rule to a property rule has wide ranging implications for the number and type of land acquisitions that take place, as well as raising policy questions of wider significance. Four factors are found to significantly vary with the change from liability rule to property rule protection; the possibilities for landowner holdout, transaction costs, externalities, and values incorporated into each mechanism. In conclusion, the necessity of looking for alternative mechanisms which combine features of both the property and liability rule mechanisms is argued.