- Historical significance- The project holds significance as it is used to supply electricity to undivided Punjab and Delhi before India’s Independence.
- Post partition- The supply to Lahore was discontinued and transmission line was halted at Verka village in Amritsar.
- Punjab Reorganisation Act, 1966- During the reorganization of States in 1966 the hydel project was allocated to Punjab by a notification issued on 1967 by the Union ministry of irrigation and power.
- Punjab approached the Supreme Court with a plea to ensure that the hydropower project stays with it even after the expiry of lease.
- Due to this, Centre has issued a directive that ordered to maintain the status quo on the Shanan hydropower project favouring Punjab.
- The Centre directed both States to maintain status quo with regard to functioning of the plant after the expiry of lease period till a final decision is taken by Ministry of Power.
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- Himachal Pradesh had been waiting for the lease to expire, keen to claim the power plant after several attempts failed in the past.
- The project was allocated to Punjab in 1966 when Himachal Pradesh was a Union Territory at that time.
- In 1971, Himachal Pradesh became a full-fledged State and the demand to hand over the project gained momentum.
- Himachal Pradesh has contended that the land belongs to it and the entire project is within its boundaries, and it was wrongly given to Punjab.
- The State also alleged that the project is in a poor condition, they argue that Punjab is not adequately repairing or maintaining it.
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