The agreement has also acquired political significance in Himachal Pradesh. Of the six governments that signed it, five are governed by the BJP, while Himachal is the lone Congress-ruled state. Sukhu has sought to project the agreement as an example of his government negotiating with the Centre and five states ruled by the BJP to protect Himachal’s financial and resource interests.
The Congress dispensation in Himachal has been highlighting the agreement through government hoardings carrying large photographs of Sukhu. The publicity campaign presents the pact as an achievement of his tenure and an evidence of the state government’s successful negotiations over a major national project.
Sukhu has also sought to link the agreement to his government’s broader argument that Himachal must secure greater financial benefits from projects that use its land and water resources.
“During the BJP tenure (from 2017 to 2022), the Jairam Thakur government failed to protect the interests of the state. They agreed to spend Rs 800 crore on this project, but when the Congress came to power, we decided that we will not spend a single penny on this project,” Sukhu said shortly after the agreement was signed.
“The project will be built on our land, water which will be used for generating power and to fulfil the needs of other states is also of Himachal. Villages and people who will be displaced when the project is constructed are also of Himachal. Then why should we bear the cost?” he said.
BJP’s pushback
The BJP has, however, rejected the Congress government’s bid to seek credit for the deal. “The ambitious Kishau dam project for Himachal Pradesh is also an example of the capable leadership, foresight and wisdom of Prime Minister Narendra Modi and Union Home Minister Amit Shah. Because of their efforts, the path towards the construction of the Kishau dam has become easier,” Jairam Thakur said.
Randhir Sharma, BJP MLA and party spokesperson said Sukhu was “forgetting a main fact”. “When BJP was in power in Himachal Pradesh, two main beneficiary states of this multipurpose project — Rajasthan and Delhi — were governed by the Congress and AAP. Both parties had then declined to bear the costs of the project… Sukhu did not fight anywhere for the rights of the state,” Sharma said.
Officials, however, point to a distinction between the earlier arrangement and the terms of the current agreement.
“Sukhu has weightage in his attacks on BJP for reportedly not advocating the rights of the state during its tenure on this specific project. Although no MoU was signed when BJP was in power from 2017 to 2022, the then government under Thakur had approved in the state Cabinet that the cost of the project would be shared by Himachal and Uttarakhand 50:50. As per the new agreement, now we will not share any cost,” an official said.
Under the funding arrangement announced by the Centre, 90% of the project cost will be borne by it, while the remaining 10% will be shared by the participating states. The arrangement also provides for Himachal’s share of water to be allocated to Delhi and Rajasthan, with the two states sharing the cost of the power component associated with Himachal’s share.
Officials said the change in the financial arrangement could be significant for Himachal, given that the project cost is expected to rise over time.
“The Rs 15,624-crore cost of the project is at the present time and this will increase in the coming years. It is a national interest project and will take a huge amount of time to complete. The cost will also increase with the passage of time. From this point of view, the agreement is a big relief for the state. Besides this, the power component is also in favour of the state,” the official said.
The Kishau project has remained pending for years amid disagreements over financial and other terms. The latest agreement changes the financial equation for Himachal, giving the Sukhu government an opportunity to argue that the state has reduced its exposure to the project while retaining its share of the benefits. The Congress has thus also got a political boost in the run-up to the state Assembly elections slated for November 2027.
Himachal Pradesh CM Sukhvinder Singh Sukhu hails ₹15,624-crore Kishau dam agreement as 'milestone', asserts state will bear zero financial burden. (File) 
Share
