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Punjab and Himachal in fight for control of Shanan hydropower project

Shanan hydropower project.

Shimla:  Sharp differences have arisen between Punjab and Himachal Pradesh over the British era Shanan hydropower project in the Joginder Nagar area of Mandi, the second biggest district in Himachal Pradesh.

The 110-MW project located in Himachal Pradesh territory is managed by the Punjab State Electricity Board (PSEB). It serves to meet the peak power demand in Punjab and the national grid while generating an income of Rs 200 crore annually.

The tussle has arisen as the project is on a 99-year-old lease which expires on March 2, 2024 after which the project should legitimately return to Himachal Pradesh, but Punjab has indicated that it would not hand over the project to the native state after the expiry of the lease period.

“I have raised the issue with Union Energy Minister R.P Singh. Soon, I will also write to Prime Minister Narendra Modi giving the full facts and history of the project. We will not extend the lease of the project and Punjab should amicably hand over the project to us. I have also made a request to Punjab Chief Minister Bhagwant Singh Mann on the issue,” Himachal Chief Minister Sukhwinder Singh Sukhu told India Narrative.

The state government has submitted all records relating to the project and lease agreement to the Centre seeking its intervention.

The Punjab government has recently taken a decision to sanction Rs 200 crore for the refurbishment of the Shanan hydropower project and setting up a solar power station at the site. This long-term investment plan is seen as a clear indication by the Himachal government that AAP-ruled Punjab does not want to hand back the project after the lease expires in the coming months.

Commissioned in 1932, the project  which is one of India’s oldest power houses, used to supply power to undivided Punjab including Lahore and Delhi before Independence.

In 1925, a lease was executed between Raja Jogendra Sen, the then King of Mandi, and Colonel BC Batty, Chief Engineer of the undivided Punjab government at the time.

After the reorganisation of states in 1966, the Shanan powerhouse was given to Punjab by the Centre.

The project originally was of 48 MW capacity, but the Punjab government enhanced its capacity to 60 MW in 1982. Later, another 50 MW was added to enhance its capacity to 110 MW.

Apart from this, the Punjab government has also opposed the Himachal Pradesh government’s move to levy water cess on hydropower projects located in the state. The Punjab assembly was the first to pass a resolution terming the move as illegal as it will impose an additional financial burden amounting to Rs 1200 crore per annum on the state.

“This new levy is not only an infringement of the exclusive rights of the state over its natural resources, but will also result in an additional financial burden for the generation of power,” the resolution said.

Recently when the Central government decided to  waive off the conditions of seeking No-Objection Certificate (NOC) for drawing water by Himachal Pradesh for Water Supply and Irrigation schemes based on the Bhakra Beas Management Board (BBMB), Chief Minister Mann shot off a letter to Prime Minister Narendra Modi opposing the move.

“It is unfortunate that the Union government had issued directions to the Chairman of Bhakra Beas Management Board (BBMB) in this regard on May 15, 2023,” Mann wrote in his letter.

Vide these directions, the Government of India has directed BBMB Chairman to do away with the present mechanism of NOC with the condition that the cumulative drawal by the Government of Himachal Pradesh, is kept below their analogous share in power i.e. 7.19% as decided by Supreme Court.

Sukhu has termed the objections as unreasonable as they involve the state’s right to use BBMB water within its territorial jurisdiction. The way things are shaping up, it appears that there are chances of the two states getting embroiled in a prolonged legal battle.