Himachal: Power producers resist govt move to levy land revenue on hydro projects

The state government’s decision to levy land revenue on hydropower projects is set to run into rough weather, with independent power producers as well as Central public sector undertakings opposing the move and warning of legal recourse if required.As per the notification issued by the government, hydropower projects will have to pay land revenue based on the average market value of the land, with the levy ranging between one and two per cent, depending on valuation.Making it clear that payment of land revenue is not permissible under the existing framework, an official of Sutlej Jal Vidyut Nigam said the company would approach the court if pressured to comply. “Central PSUs can pay land revenue only if both the state and the Centre agree. The Central Electricity Regulatory Commission will also have to examine how this amount can be factored into the tariff. Unless all three stakeholders are on the same page, there is no question of a CPSU paying land revenue,” the official said.He further pointed out that any such levy would ultimately be passed on to consumers through higher tariffs. “No company will pay it from its profits. According to the government’s own assessment, we may have to pay over Rs 200 crore annually. Absorbing this amount will severely affect the company’s development and expansion plans,” he said.Independent power producers have also expressed strong reservations, stating that there is no financial headroom to bear additional levies. “The tariff for commissioned projects is fixed for 40 years. Asking us to pay anything over and above existing liabilities is simply not viable,” said Rajesh Sharma, president of the Bonafide Hydro Developers Association.He added that the sector was already under strain due to repeated natural disasters. “We suffered heavy losses in the floods of 2023 and 2025 without any compensation. Insurance premiums have risen sharply and wage costs have increased. There is no scope to pay any additional amount and if forced, we will move the court,” Sharma said.Notably, the state government had attempted to impose a water cess on hydropower projects in 2023, but the move was struck down by the court as unconstitutional.

Himachal: Power producers resist govt move to levy land revenue on hydro projects

Subhash Rajta

Tribune News Service

Himachal: Power producers resist govt move to levy land revenue on hydro projects

Subhash Rajta

Tribune News Service

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