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INTER STATE AGREEMENT DATED 14.01.1945 ON MACHRUND HES

Agreement between the Goverment of Madras and the Goverment of Orissa regarding the development of Hydro Electrical Power at the Duduma Falls on the Machkund River.

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• The goverment of Madras and the Goverment of Orissa agree that the Power resources at the Duduma Falls should be developed without delay to the fullest and for the maximum benefit of both provinces
• • The Government of Madras shall have full right to the use of 50% of the ultimate power developed at the Duduma falls as well as of that developed at each.
  • The Goverment of Orissa shall have full right to the use of 50% of the ultimate power developed at the Duduma Falls as well as of that developed at each stage.
• The two Goverenment agree that, based on present conditions and knowledge, the Goverment of Madras will be in a position to use power to greater extent and at a much earlier date than the Goverment of Orissa. The. The two Goverment accordingly agree to develop Power jointly at the Duduma falls on the terms and conditions laid down hereinafter.
• The Goverment of orissa shall transfer to the goverment of Madras for a Period of 99 years from the date of signing of this agreement its right of use of 20% ultimate power developed as well as of that developed as well as of that developed at each stage.
• In consideration of the transfer of the said 20% the Goverment of Madras shall pay annually to the Government of Orissa for 30 years commencing from the date of operation of the power plant an amount calculated at the rate of Rs20/- per Kilowatt, on 20% of the actual Maximum demand recorded at the power house during each financial year. After the expiry of 30 Years,the terms of payment shall liable to revision in such manner as may be mutually agreed upon between the two Goverment.
• On the expiry of the said period of 99 Years it shall be open to the Goverment of Orissa to take over the said 20% on Payment to the Goverment of Madras of the Proportion share of the capital cost as defined in the schedule, Less depreciation.
• The Goverment of Madras shall be responsible for the construction maintenance and operation of all civil words including dam and appurtenant works and of Hydro Electric Installation including Power plant and switchgear at the Duduma falls whether situated in the Province of Madras or Orissa. Each goverment shall be separately responsible for the constriction, maintenance and operation of the power transmission lines and distribution system within their respective territories.
• The General proposals of the goverment of Madra for the construction and development of the scheme as contained in their printed report of 1944 are hereby accepted by both governments subject to such modification as may be made by the Government of Madras in the interest of economy. The Goverment of Orissa agree that the Goverment of Madras may proceeded forthwith with the execution of the scheme in a manner which is in the options of goverment of Madra, best suited to meet the demand for power as and when its arises. Both goverments further agree to permit all engineer and employee to enter freely into all lands and property for the purpose of the scheme and of the transmission system. Each Goverment shall grant free right of way for all the transmission lines, Which may be necessary to transmit Power from the scheme to Places within the territory of the other Goverment.
• • The Goverment of Madras shall provide 70% and the Goverment of Orissa shall provide 30% of the capital cost of scheme. Interest during construction of any part of the scheme, till such time as that part comes into operation for generation or Power, shall be borne by the Government of Madras and Arise in the ratio of 70:30 respectively.
  • The cost of maintenance and operation charges as specified in the schedule shall be paid by the two Goverments every year in proportion to the maximum demand utilized by each goverment in the year. That is to say, Each Goverment shall contribute to the maintenance and operation cost as specified in the schedule every Year in the ratio of Maximum demand utilized by it in that year and from such contribution shall be paid the interest due to each Goverment in respect of its capital investment.
• The Goverment of Madras shall maintain accounts of capital expenditure and of maintenance and operation charges incurred by both the Goverment and attributable to the schme. The auditor general of India will be requested to arrange for the audit of the accounts relating to the scheme and prescribe the manner in which the accounts shall be dept. In respect of matters relating to accounts or the inclusion or the exclusion of any particular item of expenditure and of any dispute connected therewith the decision of the Auditor General shall be final and binding on the Two Goverments.
• The Goverment of Madras and Orissa shall be at liberty to Fix or modify their tariff rates for power supplied within their respective territories without interference from the other goverments.
• During construction as well as subsequent maintenance and operation 30% of the executive and supervisory staff as well as contractors and labourers shall be drawn from Orissa provided that suitable persons are available The goverment of Madras shall further afford full facilitates for the training. of Engineering and other personnel deputed by the Goverment of Orissa on construction maintenance and operation of the scheme.
• A Joint Board of control shall be set up as soon as practicable and all matters of major policy shall be referred to that Board. Representation on the Board shall be in Proportion to the capital contribution made by each Goverment.
• Both Goverment and the Joint board of control may at any time call for such information as may be require telationg to the scheme direct from wither Goverment or from the Joint Board of control and such information Shall be Furnished.
• An advisory Committee may be formed to advise the two Goverment in respect of the incidental matters connected with the resettlement of the dispossessed inhabitants,afforestation of the reserved areas in the catchments, construction of silt traps along the water course, terracing Podu cultivation on and formation of thick forest belts near the river margins and such other matters as may be referred to it for advice by either Goverment. The committee shall consist of two representatives nominate by the Government of Orissa, two representatives nominated by the Goverment of Madras and one representative nominated by a proprietor of Jeypore and estates.
• The Goverment of Orissa consents to the development of Power by the Goverment of Madras at the two power sites on the Sileru river at the expense and under the sole control of the Goverment of Madras, and to its full utilization by that Government for a period of 99 Years.
• During this period the Government of Madras will make Power available from these two sites to the consumers in arise on the same terms and condition as may be applicable from time to time to the consumers in Madras,
• Subject to the Provisions of Clause VII, the goverment of Madras undertake that the development at either of the two power sits on the Sileru river shall not affect adversely the Machkund Hydro Electric Scheme as generally outlined in their report of 1944.
• The Goverment of Madras shall deep separate accounts for the two sileru Scheme and shall furnish copies of accounts and progress reports to the goverment of Orissa every Years.
• At the expiry of the period of 99 years the Goverment of Orissa shall be entitled to claim up to 50% of the total output at these sites on payment of Proportionate share of the capital cost. Thereafter the two Goverment shall pay maintenance and operation charge in proportion to the power taken by them.

• The goverment of Madras and Orissa agree that any dispute arising in respect of this agreement including the interpretation of any of its clauses shall be referred to the Governor-General and his decision shall be final and binding on the two Goverment.