Shimla, Jul 21 (IANS): Construction of a hydroelectric project in Himachal Pradesh to provide drinking water to Delhi has led to another political spat between the hill state and the central government. Himachal Pradesh has said it will not bear the project expenditure.

"The central government should meet the entire expenditure on account of 40MW Renuka hydel project (in Sirmaur district)," a government statement quoting Irrigation and Public Health Minister Ravinder Singh Ravi said here Thursday.

Ravi met Union Minister for Water Resources Pawan Kumar Bansal in New Delhi Wednesday.

"As the project is being constructed in the state, it's the legitimate right of the state that it gets the entire income from it as the water will be utilised (commercially supplied) in Delhi," the minister said.

He said around 2,000 people would be displaced due to the project and they should also be appropriately rehabilitated and compensated.

The Rs.2,700 crore ($560 million) Renuka dam, mainly funded by the central government, is to be built on a tributary of the Yamuna river.

The Delhi government has already given Rs.300 crore to the Himachal Pradesh Power Corporation Limited (HPPCL), a public sector undertaking executing the project, to start the dam construction work.

As per an initial agreement between Himachal Pradesh and Delhi, the hill state will bear the cost of installing the electrical and mechanical equipment, including turbine generators.

Chief Minister Prem Kumar Dhumal said in November last year that the Delhi government should not expect any cooperation in the Renuka project unless it stops charging extra commission from the state's apple growers.

He alleged the Delhi government was asking Himachal's apple farmers to shell out extra money at the capital's wholesale fruits and vegetables market in Azadpur.

"How is Delhi expecting that we will quench their thirst by providing them water when they are fleecing our apple growers?" he said.