Himachal Gets 18% Royalty from Karcham-Wangtoo Project

Shimla, July 16 (PTI) JSW Energy's Karcham-Wangtoo hydroelectric project will have to raise royalty to 18 per cent from 12 per cent at present to Himachal Pradesh after the Supreme Court passed an order in favour of the state government, a spokesperson said here on Wednesday.

"The Supreme Court has given a historic decision in favour of the state government regarding royalty from the Karcham-Wangtoo hydroelectric project. Now, JSW Energy will have to pay 18 per cent royalty to the state instead of 12 per cent from this 1,045 MW capacity project," the spokesperson said.

The project on the Sutlej River was developed by Jaypee Group, which sold it to JSW Group in 2015.

The government would get annual additional revenue of about Rs 150 crore.

In addition, the decision of the apex court will be proved to be a milestone for other projects that have completed 12 years, and the state government is optimistic that this decision will bring an income of more than Rs 250 crore per year to the treasury, a statement issued here said.

The decision of the Supreme Court superseded the Himachal Pradesh High Court's May 2024 order, in which the company was allowed to pay only 12 per cent royalty, he said, adding that it would not only increase the income of the state but also give the people of Himachal the real benefit of their resources.

The new policy of the state government mandates 12 per cent royalty for the first 12 years, 18 per cent for the subsequent 18 years and 30 per cent for the next 10 years in power projects.

According to the agreement between the state government and the company in 1999, royalty was fixed at 12 per cent for the first 12 years of the project and then 18 per cent for the remaining 28 years.

After the project started operating in September 2011, the company paid a 12 per cent royalty for 12 years, but refused to pay an additional 6 per cent royalty from September 2023.

The dispute reached the Himachal Pradesh High Court, and the decision was given in favour of the company. The state government had challenged the decision in the Supreme Court.