Punjab will soon pay its share of Rs 62.42 crore to Himachal Pradesh for execution of Rs 400 crore Shah Nehar irrigation project in Kangra district in the state, following Union government's intervention, sources said.
The Union government has decided to release the funds to Himachal Pradesh through the Planning Commission from funds available for Punjab, official sources said.
The matter has been hanging fire for over two decades.Despite several round of meetings between representatives of Union Water Resources and Expenditure department of Finance Ministry and Planning Commission, the matter could not be resolved.
Finally a meeting of representatives of concerned ministers and Planning Commission was held recently in which representatives of both the states were kept out and it was decided that the funds would be made available to Himachal soon through intervention of Planning Commission, official sources said.
The agreement for execution of Shah Nehar project was signed in August 1983 between the governments of Himachal and Punjab.
The estimated cost of the irrigation project, which was supposed to cover 15,287 hectare area, was Rs 142.32 crore in 1997 and an expenditure of Rs 74.04 crore was incurred upto March 2003, but Punjab released only Rs 29.52 crore against its share of Rs 88.49 crore.
With time and cost over-runs, the project slated to be completed in 2002-03 was already running 12 years behind schedule and its cost has increased to Rs 400 crore.
During the finalisation of annual Plan for Himachal in March 2012, Planning Commission Deputy Chairman had then stated that the matter of Shah Nehar has been resolved and the demand of Himachal to provide one time grant of Rs 62.42 crore was being considered favourably.
Punjab, which maintained that the project would benefit only Himachal and should be treated as an exclusive project of the state, had stopped contributing its share.
The Union Water Resource ministry, which was also funding both the states, had released funds under accelerated irrigation programme.
Himachal being a special category state was getting funds in ratio of 90 per cent grants and 10 per cent loan while the ratio for Punjab was 70:30.
The total expenditure upto 2007-08 was 103.75 crore and against eligible central assistance of Rs 93.38 crore, only Rs 30.96 crore was released and Himachal was yet to receive the balance amount of Rs 62.42 crore.