In a major relief to Himachal Pradesh, the Supreme Court on Friday brought the curtain down on a decades-long inter-state energy dispute over the payment of dues arising from Bhakra Beas Management Board projects since 1966, under which the hilly state will get 11,973 MU of electricity from Punjab and Haryana.
A bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and V Mohana accepted the Centre’s cashless proposal on payment of dues in energy terms to Himachal Pradesh by Punjab and Haryana.
The top court said the arrangement will be as per a 2011 apex court verdict settling power dues arising out of Bhakra Nangal and Beas hydro projects since 1966 in favour of Himachal Pradesh at the rate of 7.19 per cent.
It said Punjab and Haryana will pay Himachal Pradesh 11,973 million units of electricity over 20 years. The Punjab Government initially opposed the Centre’s proposal for payment of energy arrears in 15 years, but later sought the implementation of the plan over 30 years, while Himachal Pradesh sought implementation within 10 years.
Under the proposal, an adjustment of around Rs 420 crore towards historical capital costs incurred in the construction of the dams has been factored into the settlement, and Himachal Pradesh will not have to pay anything to Punjab and Haryana.
The original entitlement was calculated at 13,066 million units by the Central Electricity Authority.
According to the 2011 decision of the apex court, the share of Himachal was fixed at 7.19 per cent, while that of Punjab and Haryana was fixed at 51.80 per cent and 37.51 per cent, respectively.
Rajasthan’s share largely remained unaffected, while the share of Chandigarh was fixed at 3.50 per cent.
According to the 2011 decision, Himachal was to get a share in the Bhakra project from November 1, 1966, the Dehar project from November 1977, and the Pong Dam project from January 1978.
On August 12, the Centre informed the top court that the Punjab government is very close to agreeing to its proposal on payment of dues to Himachal Pradesh.
The Centre’s proposal said, “Punjab and Haryana will provide 13,066 MU of energy arrears to HP at 871 MU per annum over 15 lean seasons (October-March), in the inter-se ratio of 58:42 (Bhakra Nangal project) and 60:40 (Beas projects). HP to pay BBMB-determined charges for the year in which each tranche is received.
“HP’s liability (7.19 per cent of composite Punjab) towards the capital cost of Bhakra Nangal and Beas projects – being the unreimbursed share of loan servicing by Punjab and Haryana since 1966-67 – be assessed at Rs 420.7 crore (Punjab: Rs 249.2 crore; Haryana: Rs 171.5 crore).
“The capital cost liability could be considered to set off against part of HP’s energy arrear receivables. At the rate of Rs 3.85 per unit, the units to be offset are approximately 1093 MUs,” it said.
According to sources, the Bhakra Beas Management Board (BBMB) is paying a 7.19 per cent share of Himachal Pradesh’s electricity from Bhakra Beas projects after November 1, 2011, while Punjab and Haryana have not paid the outstanding dues of BBMB projects for the previous period, which come to 13,066 million units.
Under the proposal, since no consensus was reached among the parties on the rate of electricity to be applied, the Centre had suggested payout to Himachal by Punjab and Haryana in energy terms.
The Himachal Pradesh government had all along maintained that the state was entitled to the arrears on the terms decided by the apex court in 2011.
After failing to settle an inter-state dispute about allocation of assets for decades following the Punjab Reorganisation Act, 1966, Himachal had moved the apex court in 1996 through an original suit, pleading that as a successor state, it was entitled to 7.19 per cent share in the BBMB projects.
After the Centre failed to settle the dispute between the two neighbouring states out of court, the top court on September 27, 2011, passed a decree.