Dispute over Ranjit Sagar Dam: J&K claims 20% share, Punjab demands ₹973 crore dues

A fresh inter-state dispute between Jammu & Kashmir and Punjab has surfaced over the sharing of hydropower and financial obligations linked to the Ranjit Sagar Dam and the Shahpur Kandi project after the J&K Chief Minister Omar Abdullah recently told the Assembly that he would personally take up the Ranjit Sagar Dam issue with Punjab Chief Minister Bhagwant Mann, stressing that J&K’s rightful 20% power share and rehabilitation commitments cannot be ignored.

Thereafter, Punjab has shot a letter to J&K’s Jal Shakti Department seeking Rs.973.44 crore as its outstanding share for construction of the two projects. Of this, Rs.301.02 crore has been sought as J&K’s share in the Ranjit Sagar Dam and Rs. 672.42 crore for the construction of the Shahpur Kandi Dam project.
J&K’s demand is rooted in its claim that parts of the dam’s reservoir and associated infrastructure fall within its territory, entitling it to a proportion of the power benefits.

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However, Punjab has pushed back strongly. Officials from the Punjab government have stated that any allocation of free power to J&K must be contingent upon the Union Territory contributing financially to the projects.

The Shahpur Kandi Dam, a downstream project linked to the Ranjit Sagar infrastructure, has itself been a subject of prolonged disputes between the two states. While agreements have been signed in the past to resolve water-sharing issues, the question of power-sharing and financial liability remains contentious.

Omar Abdullah had said that Jammu & Kashmir will actively pursue its pending claims related to the Ranjit Sagar Dam with Punjab, announcing that he will take up the matter directly with his counterpart Bhagwant Mann to ensure the 1979 agreement is implemented in letter and spirit, including the 20 percent power share, compensation and jobs for affected families. “The agreement between the two states is a sovereign commitment that must be honoured in letter and spirit”.

He said that as per the 1979 agreement, J&K is entitled to 20 percent of the total power generated at Thein Dam and Shahpur Kandi Barrage at bus bar cost. He added that a power sale agreement between Punjab State Power Corporation Ltd (PSPCL) and J&K Power Corporation Ltd (JKPCL) was signed on 11 October 2019, for the sale and purchase of power from the Ranjit Sagar Dam project. However, no power is currently being injected into J&K’s system due to lack of transmission infrastructure. The provisional tariff payable to PSPCL stands at Rs. 3.5 per kWh.

On compensation to project-affected families, the Chief Minister said the total compensation amount stands at Rs.85.48 crore, out of which Rs.71.15 crore has been released by the Punjab Government, leaving a pending amount of Rs.14.32 crore.
However, citing Clause 1 of the agreement signed between Punjab and J&K on 20 January 1979, Punjab has pointed out that as per the Clause 10% of the total cost of the project towards the irrigation share was to be paid by J&K to Punjab.