SHANAN HYDROPOWER PROJECT

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Context

The Centre recently ordered that status quo be maintained on the Shanan hydropower project, over which Punjab and Himachal Pradesh have made competing claims. Punjab has moved the Supreme Court over the issue.

Details

Shanan hydropower project

• The Shanan hydropower project (on the Uhl River, a tributary of the Beas River ) is a 110 MW power project located in Mandi district, Himachal Pradesh, India. It was commissioned in 1932.
• It is the first hydroelectric power project of India in megawatt capacity.

What is the issue?

• The British-era 110-MW hydel project, situated at Jogindernagar in Mandi district, was leased to Punjab in 1925. The lease agreement was signed between the then ruler of Mandi, Raja Joginder Bahadur, and Col BC Batty, a British representative and Chief Engineer of Punjab. The 99-year-old lease came to an end on March 2 2024.
• In the past few years, Himachal has contended that the project should stay with it once the lease ends.

What claims does Punjab have over the Shanan project?

• The project used to feed the undivided Punjab and Delhi before Independence. After partition, supply to Lahore was discontinued and its transmission line was stopped at Verka village in Amritsar.
• During the reorganisation of states in 1966, the hydel project was given to Punjab, as Himachal Pradesh was then a Union Territory.
• It was allocated to the state by a central notification issued on May 1, 1967 by the Union ministry of irrigation and power.
• This stated that Punjab’s legal control over the project was under the provisions of the Punjab Reorganisation Act, 1966 read along with the 1967 notification.
• The Himachal government has alleged that the project is in a poor condition as Punjab is not repairing or maintaining it. 

What did Punjab say in the SC plea?

• In its suit in the SC, Punjab has contended that it is the owner and is in lawful possession of the Shanan Power House Project, with all assets currently under formative control of the state government through the Punjab State Power Corporation Ltd (PSPCL).
• The government has sought a “permanent Prohibitory Injunction” restraining the Himachal Pradesh government from disturbing the “lawful peaceful possession and smooth functioning” of the project.
• The state has also made the Centre a party.

What has the Centre done?

• A day before the 99-year-old lease was to come to an end, the Centre ordered status quo on the project as an interim measure to keep the project working.
• The order, issued by the Ministry of Power, Government of India, stated that, “In the exercise of the powers under Sections 67 and 96 of the Punjab Reorganization Act, 1966 read with Section 21 of the General Clause Act, 1887, it is hereby directed that the State Government of Himachal Pradesh and the State Government of Punjab shall maintain status-quo with regard to the functioning of the 110 MW Shanan Power House, after the expiry of the lease period on 02.03.2024 till a final decision is taken by this ministry.

What do the orders mean?

• The orders have clearly stated that “The issuance of this order is entirely in the nature of the interim measure and shall not be treated as a basis of any claim or interest and parties are expected to proceed further on all matters concerning the settlement of the dispute in such manner as they may deem fit and within such legal framework as may be appropriate.
• Such a measure or a step by way of removal of difficulties would be the maintenance of the status quo obtaining as of today so as not to disrupt, the functioning of 110 MW Shanan Power House, and whereas maintenance of the status quo is in the public interest.