27 January 2005	Thursday	16 Zilhaj 1425

ISLAMABAD, Jan 26: The Indian move to build a water storage and power generation facility on River Neelum in occupied Kashmir in violation of the Indus Waters Treaty would cause Pakistan a water shortage of about 8-9 per cent.

Sources told Dawn that a meeting held here on Wednesday was informed about different aspects of the Kishanganga project. The meeting was presided over by Secretary Water and Power Ashfaq Mehmood and attended by senior officials of the GHQ, Pakistan Commission for Indus Waters, the Indus River System Authority, ministry of foreign affairs and irrigation departments of Sindh and Punjab.

The sources said the meeting was informed that the diversion of River Neelum through a 22km-long tunnel could reduce water flow of River Jhelum in Azad Kashmir by 27 per cent, besides affecting the power generation capability of the Neelum-Jhelum project.

The sources said that the Indian project could reduce Pakistan's total water availability from an estimated 154 MAF (million acre feet) to about 140 MAF per year and leave unutilized a significant portion of the Mangla dam's storage capacity.

The meeting was convened on reports that India had completed work on more than 16 kilometres of the 22km-long diversion tunnel. The tunnel constitutes 50 per cent of the Kishanganga project.

The sources said India had also allocated funds for the project and was in the process of floating tenders to award a contract for the main storage and power generation component.

The meeting considered various proposals to stop India from continuing with the project and decided that other proposals would be discussed in subsequent inter-ministerial meetings and briefings to the president and the prime minister which would be held shortly.

The meeting was also informed that the finance ministry had rejected a request from the power ministry to provide government guarantees to raise about $100 million foreign exchange component of the $1.6 billion Neelum-Jhelum hydropower project that Pakistan planned to build on River Neelum in Azad Kashmir.

The power ministry sources said the finance ministry was of the opinion that under the government policy, the ministry had no powers to extend guarantees and hence a special approval would have to be obtained from the cabinet or the Economic Coordination Committee of the cabinet.

It is learnt that the power ministry has moved a summary to the ECC and the matter is expected to come under discussion in the forthcoming ECC meeting. The federal government has already asked Nespak to complete formalities for holding international bidding of the Neelum-Jhelum project by the end of March.

The future of the Kishanganga water storage and hydroelectric project and the proposed Neelum-Jhelum hydropower project are inter-related. If Islamabad does not start work immediately on the Neelum-Jhelum hydropower project, it is obliged under the Indus Waters Treaty to allow India to use this water for power generation without storage. The sources said that Pakistan had already lost its prior right of objection to the project.