Official sources said the newly-built reservoir of the 4.8 MW Aleo hydropower project being constructed by the Aleo Manali Hydropower Pvt Ltd, just three km from here, burst during a trial Sunday morning.
However, there was no casualty as the water of the collapsed dam entered the Beas river downstream.
The reservoir with a carrying capacity of 12,000 cubic metres was filled almost 95 percent for the first time.
Residents blamed the project promoters for using substandard material.
Sub-divisional Magistrate Vinay Dhiman told IANS there was no intimation to the government about the filling of the reservoir by the project promoters.
“If there is any lapse on the part of the promoters, a case would be registered against them,” he added.