High Court dismisses petition challenging Himachal Hydro Policy

Shimla: In agreement with a states right to make changes in policy that are dictated by economic needs, the High Court here rubbished a petition challenging changing a policy for allocating hydropower projects from memorandum of understanding agreements to one of competitive bidding.

Dismissing the petition of three power companies, Aleo Manali Hydro Power Pvt Ltd, Starsilver Mercantile Co and Sinner Engineering File Works, Justice Kuldip Singh observed that larger public interest overrides individual interest, while upholding the 2009 Hydro Power Policy of Himachal government.

On economic policy matters state cannot be forced to stick to policy framed at one point of time, the judge observed.
Senior counsel RL Sood, along with counsel Jyotsna Rewal Dua had sought the courts intervention for securing three power project on basis of the earlier hydro power policy of 2006 and challenging the 2009 policy.

Whereas the 2006 policy had a provision that empowered the government to allocated projects with a generation potential upto 100 MW by way of signing a memorandum of understanding agreement with the project developer, the changed 2009 had done away with the discretion and made it mandatory to allot all project above 5 MW of generation potential through international competitive bidding.

The project developing companies had petitioned that their project sites had been inspected under 2006 policy norms and since the state announced the changed policy in February, 2009 their projects be governed by the earlier policy and treated as self identified projects.

The private companies even held out that the 2009 policy guidelines were discriminatory and they could not be allowed to usurp the Intellectual Property Rights of the petitioners.

The government issued fresh notice inviting proposal in August 2010, after cancelling the earlier policy guidelines.

Representing the state, advocate general RK Bawa along with additional advocate general, Ruma Kaushik contented that the policy decision taken by the government to go for bidding rather than MoU was taken after considering the financial future of the state.

Noting that the financial future of the state was largely dependent on revenues from harnessing its power resources, the judge upheld the governments right to change policy and dismissed the petitions.

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