The Odisha government has issued a notice demanding Rs 233.11 crore from Vedanta Aluminium Limited for alleged unauthorized water extraction from the Bheden river system, a claim the company strongly refutes, asserting full compliance with regulatory standards.
The penalty encompasses base water charges, 2% interest, and a six-fold penalty for extracting over 30 lakh cubic meters of water monthly without authorization. Vedanta Aluminium has rejected the allegations, stating that the penalty is based on incorrect assumptions and that the company operates under valid water drawal agreements. Complaints from local villagers and subsequent field verification by the Water Resources Department led to the imposition of this penalty. The notice warns that non-compliance could result in action under the Orissa Irrigation Act and Rules, mandating an immediate cessation of water extraction activities.
The Odisha government’s notice to Vedanta Aluminium Limited, located in Jharsuguda, demands payment for unauthorized water extraction from the Bheden river system between May 2025 and April 2026. This demand includes base water charges, 2% interest, and a six-time penalty for lifting over 30 lakh cubic meters of water each month without permission.
According to the notice reviewed by Business Standard, the penalty was imposed following complaints from villagers and findings from field verification by Water Resources Department officials. The company allegedly extracted water without authorization for nearly a year.
In the notice issued by Jishu Krushna Beriha, superintending engineer of the Burla Irrigation Division, the deputy chief operating officer of Vedanta Aluminium has been instructed to pay Rs 233.11 crore within one month for “illegally lifting water” from Kheruwal Nallah, a distributary linked to the Bheden river, without permission from the Department of Water Resources.
The notice, dated April 29, emphasizes that such unauthorized extraction is a serious violation of the Orissa Irrigation Act and Rules, 1959 and 1961, as amended, and adversely impacts the rights and resources of the local community. It warns that failure to comply will lead to further action under the Orissa Irrigation Act and Rules, and the company has been directed to immediately halt all illegal water extraction activities from the river.
The Water Resources Department stated that complaints began in May 2025 when the district administration in Jharsuguda received allegations of unauthorized extraction. The issue re-emerged when villagers approached the Collector’s office on February 9 this year, prompting a discussion during a district-level revenue review meeting on April 7, which led to a field inspection.
Field verification by irrigation authorities allegedly confirmed that the company continued to draw water from the river channel without valid authorization. The calculation sheets attached to the notice detail that the charges were determined month-by-month using surface water rates, penal dues, interest, and outstanding amounts, resulting in a total liability of Rs 233.11 crore. The company was found to have extracted water from 32,14,080 cubic meters in May 2025 to 30,06,720 cubic meters in April this year.
Officials indicated that the penalty was imposed after confirming that the company had been extracting water without a sanctioned agreement from the Department of Water Resources, following a thorough assessment and calculations after the field inspection.
In response, Vedanta Aluminium has firmly contested the demand and denied any wrongdoing. The company claims that the penalty notice is based on “incorrect assumptions” and does not accurately represent the factual or regulatory situation. It asserts that it has been operating in compliance with applicable norms and that the calculations used by the irrigation authorities were flawed. Vedanta stated, “The company operates under valid and existing water drawal agreements with the Department of Water Resources, Government of Odisha, authorizing a total drawal of 112.9 cusecs of water, against which applicable charges are being regularly and duly paid. The actual drawal from the Hirakud reservoir is approximately 80 cusecs, which is well within the approved limits,” emphasizing its commitment to regulatory compliance and transparent engagement with statutory authorities.
