Himachal Govt all set to hike free power royalty

Subhash Rajta

Shimla, June 18

The state government is all set to enhance the free power royalty charged from all hydroelectric projects. The current free power royalty is 12 per cent for the first 12 years, 18 per cent for the next 18 years and 30 per cent for the last 10 years. The proposed new slabs are 15 per cent for the first 12 years, 20 per cent for the next 18 years and 30 per cent for the last 10 years for all projects.

“As per the directions of Chief Minister Sukhvinder Singh Sukhu, the hydropower policy is being amended to change the free power royalty slabs. The Chief Minister feels the state’s share should increase once the project is free from liabilities like interest and debt repayment and is earning profit,” said a senior official.

Interestingly, the government wants to apply the proposed free power royalty rates to hydropower projects being run by Central Public Sector Undertakings (CPSUs) as well. While there are three ascending royalty slabs for private projects, the CPSUs like the SJVN give free power at a flat rate of 12 per cent for the entire duration of the project. “The policy is being amended to increase the rate and apply it uniformly to all hydropower projects, whether owned by a private player or the CPSUs,” the official said.

The government seems to be of the view that the current policy is skewed in favour of the projects run by the CPSUs vis-à-vis private players. The private power producers pay royalty as per three ascending slabs and their projects are also returned to the state after 40 years. The CPSUs, on the other hand, pay royalty at a flat rate of 12 per cent, and have the ownership of the projects for an indefinite period. Besides, there’s no provision for free power royalty from the commissioned projects of the Bhakra Beas Management Board (BBMB). “The government will stake claim to free royalty charge from BBMB projects as well,” he said.

According to sources, the Chief Minister has directed the department to approach the Union Ministry of Power to increase the free power share from the projects, which had completed their debt servicing period.