Context: 

Punjab and Himachal Pradesh are set for a face-off as the 99-year lease on the Shanan hydropower project situated at Jogindernagar in Mandi district of Himachal Pradesh.

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. 
• The first stage (48 MW) of the project was commissioned in 1932. The project was constructed following the execution of the lease agreement in 1925.
• It was given to Punjab on 99-year lease by the then ruler of Mandi, Raja Joginder Singh Bahadur, which would end on March 2, 2024.
• The Shanan project was allocated to the State of Punjab in accordance with the provisions of the Punjab Reorganisation Act, 1966. 
• Under the Act, the Shanan project was allocated to Punjab State by the Ministry of Irrigation and Power, Government of India.
• Himachal Pradesh wants the project handed over to the State expiry of the lease period. 
• The Punjab Government is prepared to take legal recourse to retain it saying that the project is in continuous ownership and possession of the Punjab Government.

News Source: The Hindu