The sources said, non-payment of a huge sum of money demanded by underground groups was believed to be the reason behind the crime. Loktak Project, which supplies power to Manipur and some neighbouring States, is run by the National Hydroelectric Power Corporation (NHPC). Project sources said, Mr. Sher, who hails from Kashmir, had earlier received ‘money demand letters’ from some underground groups including banned Kanglei Yawol Kann Lup (KYKL), recently.

The KYKL, Oken faction, has claimed responsibility for the killing of chief engineer Sher, saying he was gunned down for not complying with its demand for payment of "taxes". Mr. Sher, despite knowing that the KYKL had been collecting "taxes" from both State and Central government officials stationed here for some years, refused to comply with its tax demand, KYKL (Oken) said in a statement.

On the other hand, Janata Party State unit general secretary Loitongbam Iboyaima Singh demanded imposition of President’s rule in Manipur while condemning the killing of Loktak Project chief engineer Subhash Chandra Sher by unidentified gunmen. "The State government had utterly failed to protect lives of innocent and law-abiding citizens," Mr. Singh said in a statement. If somebody could be killed by activists just because he could not pay money, what was the use of having a ministry which could not protect its citizens, Mr. Singh wondered while referring to reports that non-payment of a huge sum of money demanded by underground groups was believed to be the reason behind Mr. Sher’s killing. He said under the present circumstances, no free and fair elections could be possible in Manipur without imposition of President’s rule.

Meanwhile, panicked NHPC officials at Loktak may go for mass deShertation, if security measures are not tightened.The brutal killing of the NHPC chief engineer has created fresh stir amongst the affected lot, living in hostile terrains.

The NHPC officials claimed this killing was nothing new. The militant outfits in the region — 44 in all — always issue veiled as well as direct threats to the local officials to shell out money. The money that the outfits extort from the plum companies and their officials are utilised to build up their arsenal. The matter becomes worse when the NHPC management and the ‘local authorities’ — who are responsible to maintain law and order — fail to beef up the security in and around the NHPC area and for the Sherving personnel of the project.

Prior to the killing of the engineer at Manipur, the NHPC had brought the issue of rampant threats by the militants to the notice of Ministry of Home Affairs.The terror tactics employed by the militants included stopping of project vehicles plying from Loktak Project office to Leimatak Power House, on November 30 last year and threatening drivers.

December 10 onwards, only a school bus belonging to the project was allowed to ply. Even the principal of Kendriya Vidyalaya at the project complex was threatened and accosted twice on December 6 and 20. On December 22 the militants lashed out warnings to the Leimatak Power House staff asking them to desist their duty. They also accosted a senior medical officer to fulfill their demands.

Joint Secretary (North-East) G. K. Pillai of Home Ministry took note of these high-risk threats. He faxed an urgent action plan to the Chief Secretary and Director-General of Police of Manipur on December 28 and called for a review of security situation in the State. Mr. Pillai, in his faxed letter, asked to "ensure at least three companies of CRPF to be deployed at the strategic places of Leimatak, Jeevan Nagar and Loktak water barrage".

He also called for "deployment of a battalion of Manipur Rifles temporarily for combing operations in the area".   Though the Joint Secretary had sought a reply within a week on the actions taken, Special Secretary at Home ministry R. D. Kapur sent a faxed reminder on December 30, two days after the Joint Secretary’s letter was despatched.

In the faxed message to the Chief Secretary, Director-General of Manipur Police and Secretary to the Chief Minister, the Special Secretary sought "intimation of the actions taken as the matter was urgent". But the NHPC officials had a different tale to tell. The CRPF forces, which were long deployed in the area, were removed from the spot — days before the chief engineer’s murder at Loktak.

The NHPC Officers’ Association demanded adequate security measures after the murder of the chief engineer. The association has threatened mass deShertion if the demand is not met. And any mass deShertion by NHPC staff would affect the NHPC projects and the worst sufferers in that case would be the ‘Seven Sisters’.