State to get Rs 250 crore more from Kinnaur power project

The state government will now get an additional income of Rs 250 crore from the 1,045 MW Karcham Wangtoo Hydroelectric Power Project in Kinnaur district after the Supreme Court gave a decision in favour of Himachal Pradesh.

The government had moved the Supreme Court seeking 18 per cent of free power from the project instead of the present 12 per cent, as per the initial agreement. The decisions could have far-reaching implications as some other projects would also now have to give in to the demand of the state government for enhanced royalty.

A spokesperson for the state government said that after the Supreme Court’s decision, the government would get an additional annual income of about Rs 250 crore from the Karcham Wangtoo project. “The decision of the Supreme Court will have far-reaching implications as the state government had sought enhanced free power from other power producers also. As such, the state government is likely to get an additional income of Rs 250 crore every year.

He said that Chief Minister Sukhvinder Singh Sukhu had flagged this issue and decided to fight the matter legally so that the state gets its legitimate right. This decision would not only increase the income of the state but also give the people of Himachal the real benefit of their resources, he added.

According to the agreement between the state government and the executing company signed in 1999, the royalty was fixed as 12 per cent for the first 12 years of the project and then 18 per cent for the remaining 28 years. The project started operations in September 2011 and the company paid 12 per cent royalty for 12 years, but refused to pay additional 6 per cent royalty from September 2023 onwards.

The dispute reached the Himachal High Court, which gave its verdict in favour of the power company. The state government challenged the High Court’s decision in the Supreme Court.

The spokesperson said that under Sukhu’s leadership, the government was continuously advocating effectively for the interests of the state and this court decision was a strong step in that direction. Himachal Pradesh had succeeded in regaining its rights, he added.

6per cent additional royalty not paid

• According to an agreement between the state government and the executing company, a royalty of 12 per cent free power for the first 12 years and then 18 per cent for the remaining 28 years from the 1,045 MW Karcham Wangtoo Hydroelectric Power Project in Kinnaur was fixed
• The project started operations in September 2011 and the company paid 12 per cent royalty for 12 years but refused to pay additional 6 per cent royalty from September 2023 onwards