'Secretary level talks between Indian and Pakistan on the Baglihar Hydroelectric Project were held at New Delhi on 22.6.2004. Mr Ashfaq Mahmood Secretary Water and Power led the Pakistan delegation and Indian delegation was led by Shri VK Duggal, Secretary, (Water resources). Prior to the meeting the Pakistan delegation called on Shri Priyaranjan Dasmunsi, Hon. Minister of Water Resources on 21^st June, 2004.

The talks were held in a very cordial and friendly atmosphere and in the spirit of goodwill and cooperation. The two Secretaries discussed ways and means to resolve technical concerns relating to the Project and shared their assessments on this issue. They will now report back to their respective governments.'(New Delhi June 22, 2004).

Following a reference to the World Bank, Ministry of External Affairs of India's (MEA) spokesman, in his statement on 18^th January, 2005 said: 'We do not believe that the reference to the World Bank was justified.'Irritation was more pronounced, when on 11^th January, 2005 the MEA Spokesman said, 'If Pakistan still chooses to go the World Bank, then we will respond appropriately.'

On 16th February, 2005, a month after the reference to the World Bank by Pakistan, Mr Shyam Saran, the Indian Foreign Secretary, made the following public statement:

'Our viewpoint is that last round of talks which was held between India and Pakistan was perhaps the first time that there was a really very intensive technical discussion. It was our sense, perhaps not shared by the Pakistani side, that some degree of convergence was achieved during these discussions. It was our assessment that if these technical discussions could be carried forward then perhaps the area of convergence could increase further. Perhaps, it was a sense on the Pakistani side that we were not going to get anywhere even if there were further discussions. As you are aware, a reference has been made by Pakistan to the World Bank. It remains our view that we should continue bilateral discussions, it remains our view that there are possibilities for us to be able to find greater convergence to these discussions.'

The Foreign Secretary seemed to express frustration at the reference to the World Bank but did not identify the exact areas of convergence. He acknowledged that this was the first time that technical discussions had taken place. But water issues cannot be treated as pure technical matters or divorced from political subtext.

According to Rajeev Sharma, 'Pakistan's objections were not really technical.' It only wanted to prevent India from doing a major project in Jammu & Kashmir even if it is permissible under the Treaty. Pakistan's decision according to him, to bring in neutral expert, 'will inevitably cast a shadow on the projects in Jammu & Kashmir.'(The Tribune, NOIDA, Jan 10, 2005). The same newspaper in its editorial characterised the dispute as 'essentially technical, rather than political.'Pakistan's decision will prove to be a potential headache for the Government of India.

As articulated by Professor Pushpesh Pant, such setbacks are normal in any peace process and should not dishearten any side. In fact it will convince Pakistani people that their government was not buckling under Indian pressure, thus arming it with more credibility. But credibility, without being put to use in resolving the issue to the mutual benefit of both the parties, is of no use.

Pakistan however offered whatever it could as a lower riparian to reach a settlement predicated upon suspension of work followed by a dialogue. But Indian desire to proceed with exploiting hydropower potential was too overwhelming.

What precisely are Pakistan's objections? They primarily relate to the design of the plant without questioning India's right under the Treaty to construct hydroelectric dams and the fear that the dam will cause a loss of 6,000 to 7,000 cusecs of water every day, equal to a 27 per cent decrease in the Jhelum River. Other experts say that the Baghlihar dam will have major security and economic implications for Pakistan owing to increased Indian control over its share of water supplies. According to this report the Project will tap around 7000 cusecs of water for irrigation purpose in the short term. This only confirms Pakistan's apprehensions regarding India's intentions on its storage potential. The electricity would meet 1/3^rd the total power requirement of the State.

Due to suspension of supplies for up to 28 consecutive days during certain months, the project can lead to acute water shortages. Some apprehensions expressed by Pakistan are:

Reference to the parts of Treaty that Pakistan referred to above find mention in Annexure D paragraph 8 and the relevant sub paragraphs 8(a), (c), (e) and (f) read as follows: -

India, and the State of Jammu and Kashmir are deficit in power and it seems that the Indian Government has taken a policy decision to increase the generation. 'Even as the Government of Pakistan is crying wolf over India's Baglihar, Wullar and Kishanganga Hydroelectric Power Project, the Indian government is reportedly planning to construct another three projects. J&K is reported to have about 15,000 MW of power potential. In the past two decades Indian Rs.40b have been invested in the power sector in the State’. (Daily Times, January 17, 2005). There is growing resentment amongst the people of the State over (the) government's failure to harness the enormous hydroelectric power potential.

This is why a number of other disputes seem to have emerged in public view, the Kishenganga hydroelectric project on Neelum River, which is a tributary to Jhelum, being one of them. The other projects are: Uri II on the Jhelum River in Baramulla District, the Pakul Dul and the Burser Dams, both on the Marusundar, a tributary of the Chenab River in Dhoda district. The Pakuldul and Burser dams are mega projects with a generating capacity of above 1000 MW each. According to another report, the Prime Minister's Office has not only approved more hydel projects but has matched the intention with money. These projects have been forwarded to the Cabinet for approval. An allocation of Rs.163 billion by the State of Jammu & Kashmir and Rs. 240 billion from the Prime Minister's construction plan have been earmarked. Ministry of Power has reserved about Rs. 120 billion for the three projects.

Chenab is one of the three western rivers allocated to Pakistan under the Treaty. It is an important water source for the Indus. Both the countries are planning a dam on the Neelum River, a tributary of River Jhelum.

Under Indus Water Treaty 1960, Article I the term 'Western Rivers' means the Indus, the Jhelum and the Chenab taken together. Article III provides for unrestricted use by Pakistan of 'all those waters of the Western Rivers which India is under obligation to let flow under the provisions' of the following paragraph, which lays down that India shall not permit any interference with these waters except for the specified uses like Domestic Use, Non consumptive Use, Agricultural Use and Generation of hydroelectric power as set out in Annex D.

Article III (4) reads:
'Except as provided in Annexure D&E, India shall not store any water of, or construct any storage works on, the Western Rivers.'Annexure D & E to the Treaty provide for exceptions to the use of Western Rivers by Pakistan.

The Treaty allows India generation of hydroelectric power as one of the uses. Annexure D applies to unrestricted generation of hydroelectric power. India is planning many more such projects.

Annexure D to Indus Water Treaty, 1960 applies with respect to the use by India of the waters of western rivers for the generation of hydroelectric powers under the provisions of Article III (2) (d) of the Treaty. The design, construction and operation of the plants shall be governed by provision of Annexure E (ibid). The design shall conform to the criteria laid down in para 8, part iii to Annex D and includes the requirement that the works shall not be capable of raising artificially the water level in the operating pool above the Full Pondage Level specified in the design. There shall be no outlets below Dead Storage Level.

Under the Treaty India can make only ‘Non-consumptive uses’, which include any control or use of water for navigation, floating of timber or other property, flood protection or flood control, fishing or fish culture, and other like beneficial purposes so that the water undiminished in volume within the practical range of measurement remains dormant in or is returned to the same river or its tributaries. Such use does not include agricultural use or use in the channels of hydroelectric power.

As soon as it found out Indian 'designs', Pakistan did not hesitate to ask for more information, and then raised objections as early as August, 1992. This should be enough to allay any suspicion that Pakistan's government was found not vigilant.

The project is divided into two phases and each phase is designed to produce 450 MW power. The first phase is likely to be completed within 2005. However, the MoU for construction of 450 MW Baglihar Project was signed on 11^th March, 1999 with Jaiprakash Industries Ltd., the biggest Indian hydropower construction company, and two other companies, Siemens and Hydro Vevey Ltd. Total cost of the project is Indian Rs.38b (less than a billion dollars) and the Indian government is providing massive assistance to the state government in completing the project. The state allocated Rs. 16b; the Indian government promised assistance of Rs. 22b.

The Project envisages the construction of a 308 meters high dam on River Chenab near the place known as Baglihar (see Map) with storage of 321,000 Acre Feet of which 291,000 acre ft. is dead storage capacity. Live storage, also termed as Pondage (Operational Pool), is 30,400 acre ft. This Pondage is required to supplement the discharge during low flow period. This is what Pakistan is opposing.

The Treaty has an excellent record of full compliance by both the parties and has held for the last 45 years and yet we may have entered a phase where water has acquired a new sense of urgency about shortages. Population explosion continuing apace in both the countries, water is going to come under intense pressure. The Treaty lays down an elaborate dispute resolution mechanism, which has not been necessary to invoke for the past 45 years. No difference between the two commissioners has, so far, graduated to a dispute, not even to the point of difference requiring reference to a neutral expert before this one.

India insists on bilateral discussion under Article VIII whereas Pakistan seeks recourse to Article IX. The latter provides for dispute resolution and involves third party involvement, which India religiously avoids in settling any dispute with any of her neighbours.

Under the Treaty, it is the Commission that shall first examine any issues arising. The Commissioners from both sides together form the Commission. This Commission, if it fails to reach an agreement, a difference will be deemed to have arisen. It may be noted that 'questions' remain questions so long as they are under discussion in the Commission. When they defy resolution, they become differences, which are then to be referred to the neutral expert.

Annex F to the Treaty prescribes the procedure to be followed in that case. If there is any difference, which in the opinion of either Commissioner falls within the scope of Article IX read with Annex F to the Treaty, then at the request of either Commissioner (in this case Pakistan's) a neutral expert will be appointed in accordance with the provisions mentioned in Annex F. The two governments may make appointment jointly, and failing which, by such person as may be agreed upon between the two governments. In the absence of such agreement the World Bank will appoint the neutral expert.

Annex G deals with the establishment of a Court of Arbitration. A Court of Arbitration shall consist of 7 Arbitrators including two appointed by each party, and three called the umpires, one from each of the following categories: -

It appears that sooner or later, the World Bank will have to fulfil its obligations under the Treaty. It cannot escape the responsibility by claiming that it is not a guarantor. That is precisely what its role was contemplated by the two parties before agreeing to subscribe to the Treaty. The appointment of a neutral expert is not going to be easy. Once the World Bank is referred to, and the two governments fail to jointly appoint one, the Bank, within one month after the date of request, shall appoint him. This provision is subject to an important caveat, which stipulates, 'Every appointment shall be made after consultation with each of the parties.'

According to reports, Pakistan's Ambassador to the U.S. met the World Bank President. A leading expert of the World Bank has predicted a prolonged and complicated legal battle. According to a report (31st January, 2005), the World Bank responded on 19th January, 2005 and made it clear that it is just a signatory and not a guarantor. The WB needs the approval of both countries and as such the process could be time consuming allowing India sufficient time to complete the project.

There has been no outcome yet. The World Bank is dragging its feet and has adopted the role of a conduit of messages between the two protagonists. The two governments may ultimately agree to finalise the services of one or more mediators. If and when the neutral expert agreeable to the two parties is found, the process will begin and in the meanwhile India will be busy changing realities on the ground. The provisions contained in paragraphs 3,4, and 5 of Article IX relating to the 'Dispute' shall not apply to any difference while it is being dealt with by a neutral expert.

In case the neutral expert determines that in his opinion the difference or a part thereof should be treated as dispute, then the dispute will be deemed to have arisen, which will be settled in accordance with paragraphs 3, 4 and 5 of Article IX.

Mr. T.C.A. Raghavan, Deputy High Commissioner of India, whom the author met recently, recently stated that the Project is not due for completion anytime soon and might get completed by Dec 2006. According to him about 60 per cent work on the Project has been completed. According to a newspaper report, Senator Khurshid Ahmad, on the other hand claims, that 85 per cent work on Baglihar has been completed.

Trevor D'Souza, in Business and Finance Review, 28^th February 2005, claims that 'The percentage of progress at stage I so far is 41 per cent for civil works and 63 per cent for hydro-mechanical works. Design and engineering 94 per cent, infrastructure works 99 per cent, river diversion works 88 per cent, dam and intake 17 per cent, waterways 60 per cent, powerhouse complex 90 per cent and pothead yard 13 per cent.

The completed structure so far comprises eight bridges, 30 km of roads, 10 km of tunnels, 300 m vertical shafts and 5 huge caverns plus camps, storehouses and workshops, offices, laboratory, hospital and complete facilities for production of aggregates and concrete and placement.’

When asked why India did not suspend work on the Project as demanded by Pakistan to provide for further bilateral discussions, Mr Raghavan referred to the Tulbul Project, which was suspended by India at the instance of Pakistan, and has remained so since then. Wullar Barrage Storage Project, which India prefers calling Tulbul Navigation Project, remains suspended since 1987. According to India Indian Rs.170 million has already been spent on the project. India does not want to repeat the mistake. Similarly, India does not want third party involvement because of sad experience with the Rann of Kutch and points to India's suspicions of the multilateral process.

Then there is another twist to the dispute. Kashmir is back again center stage. According to Dr. Syed Nazir Gilani (South Asia Tribune, 24 January, 2005), taking a position on the Baglihar dispute is full of risks. Gilani is Chair of International Kashmir Alliance and Advocate of the Supreme Court. He says that since Pakistan has moved to the World Bank, 'it is in our prime interest that we become a party without fail”. According to him the dispute is a blessing in disguise and has landed Pakistan in the soup by exposing its disregard for the welfare of the people of Jammu and Kashmir. The dispute has created an opening for the defence of Kashmir Interests. He holds that allocation of water under the Treaty was a breach of the Instrument of Accession of Kashmir with India 1948, which could not trade off a natural resource without fully assessing 'the jurisprudence of principality of water, and whether the water being allocated actually exists or may be taken without detriment to other users, the water or the environment.’

By concluding the 1960 Indus Water Treaty with India, Pakistan has, in practice, accepted the sovereignty of India over water resource and habitat. According to a Kashmiri website (jammu-kashmir.com/insights) accessed on 31^st January, 2005, J&K Assembly passed a Resolution on 3rd March 2003 asking New Dehli to reconsider Indus Water Treaty so as to safeguard the interests of the State. According to this report, Pakistan's opposition to the project amounts to playing with aspirations of the Kashmiri pe