Context:

Recently, the Centre ordered that the status quo be maintained on the Shanan hydropower project, over which Punjab and Himachal Pradesh have made competing claims.

About Shanan Power Project

• The 110 MW Shanan power project was envisaged by Col. Battye, the then Chief Engineer of the Government of Punjab, in 1922
• On Lease: It was leased to Punjab in 1925 for 99-years. 
  • The first stage (48 MW) of the project was commissioned in 1932. 
• Signed by: The lease agreement was signed in 1925 between the then ruler of Mandi, Raja Joginder Bahadur, and Col BC Batty.
• Utilisation: According to the agreement, water for the project was to be utilised from Uhl River, a tributary of Beas River, in lieu of which the state would receive 500kW free electricity.
• Location: It is situated at Jogindernagar in Mandi district, Himachal Pradesh.

Issues Over Shanan Power Project

• Lease agreement Termination: 

  • On March 2, 2024 after a period of 99-lease years. 

• Punjab’s Claims:

• • Legal Control: 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. 
  • Assets Control: Punjab has contended, with all assets currently under formative control of the state government through the Punjab State Power Corporation Ltd (PSPCL).
    • Punjab claimed that the Project has been in possession, control and management of the Project since its inception in 1932.

• Himachal Pradesh’s Allegation: 

  • The Shanan Power House is situated in Himachal’s territory, hence the state should has full rights on this project.
  • The Himachal government has alleged that the project is in a poor condition as Punjab is not repairing or maintaining it.

• Centre’s Interim Measures: 

  • An Interim Measure: 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.
  • Legal Framework: Both parties are expected to proceed with 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.
  • Public Interest: Such a measure or a step by way of removal of difficulties would be the maintenance of the status quo so as not to disrupt the functioning of Shanan Power House.

• Legal Action: 

• • The Supreme Court will on April 8 take up the application by Punjab government seeking to restrain the Himachal Pradesh government from taking possession of 110-MW Shanan hydel on expiry of its 99-lease period.

News Source: The Indian Express