Legal Battle brews over Himachal’s move to reclaim SJVN Hydropower projects

Shimla, Apr 7,

A legal confrontation appears imminent between the Himachal Pradesh government and public sector undertaking SJVN Ltd, following the state’s decision to take over three hydroelectric projects currently under execution by the PSU.

The Himachal Pradesh Cabinet, in a meeting held on April 5, approved the takeover of the 382 MW Sunni Dam, 210 MW Luhri Stage-I, and 66 MW Dhaulasidh hydroelectric projects—all being developed by SJVN Ltd.

In response, SJVN, a Central Public Sector Enterprise, has decided to challenge the move in the High Court, calling the decision “unfortunate” and asserting that it will continue with the construction work, which is nearly 60% complete.

Ajay Sharma, Director (Personnel), SJVN, warned that halting work at this stage would lead to significant cost overruns and result in higher electricity tariffs. “Stopping construction will make power more expensive,” he said, adding that the company had moved forward with the projects based on concessions offered by the previous BJP-led government.

According to Sharma, the earlier government had waived the free power obligations for the initial years and allowed SJVN to retain ownership of the projects beyond the usual 40-year handover period. These relaxations, he argued, were crucial to project viability. “Without them, the tariff would have ranged between ₹8 to ₹8.50 per unit. The concessions brought it down to ₹5.50–₹5.75, making it feasible,” he explained.

Specifically for the Luhri Stage-I and Dhaulasidh projects, Sharma stated that tariffs would have touched ₹10 per unit in the absence of concessions, and the Government of India would not have granted investment approval unless the tariff was around ₹5.30 per unit.

The Congress-led Himachal Pradesh government, under Chief Minister Sukhvinder Singh Sukhu, has demanded a revised power-sharing agreement with private and central agencies executing hydroelectric projects in the state. This includes 12–30% free power for the state and a return of project ownership after 40 years.

Further intensifying the situation, the government is also planning to reclaim the 500 MW Dugar and 180 MW Baira Suil projects from the National Hydroelectric Power Corporation (NHPC) on similar grounds, citing unfair and outdated agreements.

The issue has been compounded by the fact that SJVN had commenced construction work without a formal Implementation Agreement (IA), which was delayed due to the 2022 Assembly elections.

With no resolution in sight, the matter now appears to be heading to court. SJVN maintains that transferring partially completed projects to another entity is neither practical nor financially sustainable.

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The HimachalScape Bureau comprises seasoned journalists from Himachal Pradesh with over 25 years of experience in leading media conglomerates such as The Times of India and United News of India. Known for their in-depth regional insights, the team brings credible, research-driven, and balanced reportage on Himachal’s socio-political and developmental landscape.

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Himachalscape bureau

The HimachalScape Bureau comprises seasoned journalists from Himachal Pradesh with over 25 years of experience in leading media conglomerates such as The Times of India and United News of India. Known for their in-depth regional insights, the team brings credible, research-driven, and balanced reportage on Himachal’s socio-political and developmental landscape.