Uttarakhand plans to levy green tax on hydel projects

Even as the hydropower sector has taken a beating in Uttarakhand, the government is planning to impose a surcharge or green tax on all the hydel projects which are in production, a move decried by companies.

A total of 3,100 megawatt (MW) of power is being produced in Uttarakhand where nearly 70,000 million cubic metres of river water is being used, according to an official estimate. The hydropower sector, however, had turned negative after a series of hydel projects was scrapped last year.

A decision to levy surcharge was taken by a high level meeting here late last evening, presided by chief minister Ramesh Pokhriyal Nishank, an official statement on Wednesday said.

However, the statement did not give details of the exact surcharge to be imposed on the hydel projects in the state where companies like GVK, Lanco, Reliance Power, GMR, Uttarakhand Jal Vidyut Nigam (UJVN), THDCIL are developing new projects.

A proposal for imposing surcharge was put forward by the irrigation department which was accepted in principle by the chief minister, the statement added.

When contacted, irrigation secretary P C Sharma told Business Standard the department is preparing a draft irrigation Act through which the new surcharge will be imposed.

Sharma also claimed that surcharge is being levied in Jammu and Kashmir at 25 paise per cubic metre of water, being used by the companies for generating hydropower. On the same pattern, Uttarakhand can also generate a revenue of Rs 1,700 crore every year, Sharma claimed.

However, the move was opposed by top officials of a host of hydropower companies. “This initiative will further spoil the hydropower sector. We should allow such surcharge only when the sector gets a boost. Before taking any such step, the government must give details regarding steps it took to give help the hydropower sector,” said a top official of UJVN.