Shimla – Hydro Power producers in Himachal Pradesh have agreed to pay a 12% royalty to the state government, but Chief Minister Sukhvinder Singh Sukhu has issued a stern warning: if the companies fail to meet additional conditions, the government will not hesitate to take over the projects.
During the Question Hour in the Himachal Pradesh Legislative Assembly, the Chief Minister responded to a question from MLA Kewal Singh Pathania, criticizing the previous government for what he described as the sale of the state’s interests. Sukhu pointed out that the former administration had failed to secure favourable terms in agreements with power companies, leading to significant financial losses for Himachal Pradesh.
Under the Congress government’s new policy, major power projects, including the Dhaulasidh, Sunni, and Luhri projects, currently operated by Satluj Jal Vidyut Nigam Limited (SJVN), will be taken back after 40 years of operation. The same rule will apply to the Dugar project, which is currently under the National Thermal Power Corporation (NTPC).
Sukhu specifically criticized the previous administration for its handling of the Luhri project, which was inaugurated by Prime Minister Narendra Modi. He stated that the terms set by the former government allowed the state to receive only 4% free electricity from the project after 10 years, 8% between 11 to 25 years, and 12% from 26 to 40 years. According to Sukhu, these terms were highly unfavourable and caused considerable financial harm to the state.
The Chief Minister also highlighted similar issues with the Dhaulasidh and Sunni projects, where power projects were handed over to companies for 40 years without sufficient compensation. Additionally, the previous government waived the Goods and Services Tax (GST) for these projects and did not collect any funds under the Local Area Development Authority (LADA), effectively giving away valuable water resources without ensuring adequate returns for the state.
To address these issues, the current Congress government has raised the matter with the central government. Chief Minister Sukhu recently met with Union Energy Minister Manohar Lal Khattar to inform him of the state’s decision to reclaim the three SJVN projects.
With power companies now agreeing to pay a 12% royalty, the state government has insisted that they must also comply with other conditions. If the companies fail to reach an agreement that meets the state’s requirements, the government is prepared to take control of the projects to safeguard Himachal Pradesh’s interests.
