WHY IT IS IN NEWS?

• Punjab, Haryana and Himachal Pradesh are locked in a legal wrangle over payment of compensation relating to Bhakra-Nangal and Beas power projects.
• The Supreme Court has asked Attorney General l to look into the prospect of an amicable settlement of the decades-old dispute over payment of compensation relating to the Bhakra-Nangal and  power projects.  

Backdrop

• The current dispute is an offshoot of the September 2011 verdict of the apex court
• In an original suit filed by Himachal Pradesh in 1996, seeking 7.19 percent of the total power generated from three hydro power projects, Bhakra-Nangal-Beas Projects, situated in its territory with effect from November 1, 1966.
• The apex court in its verdict had partly allowed Himachal Pradesh’s claim and directed the Centre to calculate the compensation amount and submit a report in consultation with the three states.
• The apex court had on August 7, 2014, asked the Attorney General to assist in the matter to resolve the issue amicably. 

2011 decree

• Himachal Pradesh has claimed that a compensation amount of Rs. 4,249.45 crore is payable to it from Punjab and Haryana for the short supply of electricity from the date of actual supply and its entitlement, as per the apex court verdict.
•  The hill State had stated it was entitled to Rs. 2,724 crore on account of the Bhakra projects, Rs. 1,033.54 crore in respect of Dehar Power project and Rs. 491.89 crore with regard to the Pong Power project. 

WHAT DO PUNJAB AND HARYANA SAY 

• The compensation amount claimed by Himachal Pradesh was disputed by Punjab and Haryana
• They that if it was entitled to 7.19 per cent share of the total power from the projects with effect from November 1, 1966, then it should also share the construction cost of these projects.  

HISTORICAL BACKDROP

• The Bhakra dam across the river Satluj was proposed in the year 1944 in the then Bilaspur State. The construction of Bhakra dam resulted in submergence of a large territory of the Bilaspur State but benefited the then Province of Punjab.
• The then Raja of Bilaspur had agreed to the proposal for construction of the Bhakra dam only on certain terms and conditions including payment of royalties for generation of power from the water of the reservoir of the Bhakra dam.
• However, the formal agreement between the Raja of Bilaspur and the province of Punjab, could not be executed as the Bilaspur State ceded to the Dominion of India in 1948.
• In 1954, Bilaspur and Himachal Pradesh were united to form a new State of Himachal Pradesh under the Himachal Pradesh and Bilaspur (New States) Act, 1954.
• In 1966, Parliament enacted the Punjab Reorganisation Act, which bifurcated the erstwhile State of Punjab into two States of Punjab and Haryana, and transferred some territories of the erstwhile State of Punjab to the Union Territory of Himachal Pradesh.
• With effect from January 25, 1971, Himachal Pradesh became a full-fledged State by the State of Himachal Pradesh Act, 1970.

Submergence of land

• The apex court in its 2011 verdict had noted that the construction of Bhakra dam had brought lot of benefits to the country and neighbouring States like Punjab, Haryana, Rajasthan and Chandigarh, but also resulted in submergence of 27,869 acres of land in the erstwhile Bilaspur State out of the total 41,600 acres.
• This resulted in loss of cultivated and uncultivated land to a total extent of 1,03,425 acres which needed to be compensated by neighbouring States.

ABOUT BHAKRA NANGAL DAM

• Bhakra Dam is a concrete gravity dam on the Sutlej River in Bilaspur, Himachal Pradesh in northern India. The dam forms the Gobind Sagar reservoir.
• The dam, located at a gorge near the (now submerged) upstream Bhakra village in Bilaspur district of Himachal Pradesh of height 226 m
• Described as "New Temple of Resurgent India" by Jawaharlal Nehru,the first prime minister of India, the dam attracts tourists from all over India. Bhakra dam is 15 km from Nangal city and 20 km from Naina Devi town.
• The Bhakra-Nangal multipurpose dams were among the earliest river valley development schemes undertaken by India after independence though the project had been conceived long before India became a free nation.