Himachal: Water cess to be rationalised on pattern of Uttarakhand

Shimla, August 22

The state government has decided to rationalise water cess imposed on 172 hydroelectric power projects on a par with Uttarakhand. The decision was taken at a Cabinet meeting chaired by Chief Minister Sukhvinder Singh Sukhu here today.

Relaxation goes

The Cabinet decided to withdraw the relaxation of staggered free power royalty given to four hydroelectric power projects allotted to the SJVN and the NHPC

The decision to rationalise water cess has been taken on the request of the power producers, who had urged the government to reduce rates, and on the recommendation of a committee constituted to look at the issue closely.

Besides Himachal, Uttarakhand, J&K and Sikkim are also charging water cess from power producers.

The imposition of water cess on 172 hydroelectric power projects in Himachal has been challenged in court but the state government is hoping to get a revenue of about Rs 2,000 crore from it every year.

Despite the directives of the Central Government, around 140 power producers have already registered with the Jal Shakti Department for the payment of water cess. The state government is hoping that when rationalised, the power producers will agree to pay the water cess.

Aimed at enhancing revenue, the Cabinet decided to withdraw relaxation given for staggered free power royalty in favour of four hydroelectric power projects allotted to Satluj Jal Vidyut Nigam Ltd and the National Hydro Power Corporation.

The Cabinet decided to make major changes in the power policy to protect the interests of the state. The four hydroelectric power projects to be impacted by the decision are the 210 MW Luhri Stage-I, 66 MW Dhaulasidh, 382 MW Sunni Dam and the 500 MW Dugar project.

The Cabinet also decided to fix the MoU period with the power producers for 40 years, after which the hydroelectric projects would revert to the government free of cost and free from all encumbrances and liabilities. However, the royalty payable to the state in case of an extended period would not be less than 50 per cent.

The amendments to the Swaran Jayanti Energy Policy would also pave the way for enhancing royalty in the form of free power from hydroelectric projects. Once the amendments are carried out, the royalty from hydroelectric projects shall be charged at the rate of 15 per cent for the first 12 years, 20 per cent for the next 18 years and 30 per cent for the remaining 10 years.