Shanan Hydropower Project

The Centre on Friday (March 1) ordered that status quo be maintained on the Shanan hydropower project, over which Punjab and Himachal Pradesh have made competing claims.

What is the history of the Shanan hydropower project?

1. This hydroelectric project, a 110-MW British-era hydroelectric project, has been a source of dispute between Punjab and Himachal Pradesh.
2. Located in Himachal Pradesh, on the Uhl River, a tributary of the Beas River.
3. Presently, the project is controlled by Punjab Power Corporation Limited (PSPCL).
4. The project is a profitable venture, generating an annual revenue of Rs 200 crore.
5. The original lease agreement was signed in 1925 between Raja Joginder Bahadur (then ruler of Mandi) and Col BC Batty, a British representative and Chief Engineer of Punjab.
6. The 99-year lease agreement expired on March 2, 2024.
7. Himachal Pradesh claims that once the lease expires, the project should come under its control and has announced that it will not allow Punjab to claim ownership of the project after the lease period.

What are the claims made by both States over the Shanan hydropower project?

Punjab claim

Himachal Pradesh

The Shanan Hydropower Project holds historical significance as it supplied electricity to undivided Punjab and Delhi before India's independence. After the partition of India, the electricity supply to Lahore was discontinued, and the transmission line was halted at Verka village in Amritsar. During the reorganization of states in 1966, the Shanan Hydropower Project was allocated to Punjab by a notification issued in 1967 by the Union Ministry of Irrigation and Power. Punjab approached the Supreme Court with a plea to ensure that the hydropower project remains with the state even after the expiry of the lease agreement. In response to the legal dispute, the Centre issued a directive maintaining the status quo on the Shanan Hydropower Project, favoring Punjab. The Centre directed both Punjab and Haryana to maintain the current operational status of the plant after the expiry of the lease period until a final decision is taken by the Ministry of Power.

Himachal Pradesh was waiting for the expiry of the lease to claim the power plant after several failed attempts in the past. In 1966, when Himachal Pradesh was a Union Territory, the project was handed over to Punjab. The demand to transfer the project to Himachal Pradesh gained momentum in 1971 when it became a full-fledged state. Himachal Pradesh claims that the land belongs to it as the entire project is located within its borders and was mistakenly given to Punjab. The state further alleged that the project was in poor condition, arguing that Punjab was not adequately maintaining or repairing it.

What are the claims made by Punjab under Article 131?

• The Punjab government has filed an original suit against the Himachal Pradesh government and the Center under Article 131 of the Constitution.

Article 131 deals with original jurisdiction of the top court in a dispute between the Centre and one or more states or a dispute between two or more states.

1. The Punjab government claims that it is the rightful owner and currently has lawful possession of the power plant.
2. Punjab has requested for a permanent injunction to restrain the Himachal Pradesh government from disturbing their lawful occupation and smooth functioning of the project.
3. The Punjab government is asking the Supreme Court to make the Himachal Pradesh government promise not to send any officers or teams to take over and run the project.

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