LAHORE, June 2: Pakistan and India will hold the next round of talks on the Kishan-Ganga project in the third week of July and if the talks fail the issue may be referred to a third party for arbitration.

The second round of talks between Indus commissioners of the two countries concluded here on Monday without any progress on objections to the project raised by Pakistan. The two sides discussed the issues of flushing of dam and gated or un-gated structure but failed to resolve them.

The Indian side, which promised to respond to the Pakistani request of setting a timeframe for the dialogue, agreed to meet again in the third week next month.

Technicalities of the Indus basin treaty invaded the dialogue when Pakistan insisted that its six objections had formally been converted into “questions for arbitration”. The Indian side, however, requested to treat them as mere objections, a step before invoking the third party arbitration.

The two sides stuck to their points of view, Pakistan treating them as questions and India as objections, and held two days of talks which proved to be inconclusive.

Pakistan’s Indus Commissioner Syed Jamaat Ali Shah told dawn that the process was inching towards conclusion. “Both sides have agreed that the issue should be resolved at the commissioners’ level and third party arbitration must be avoided. It reflects sincerity of purpose on both sides.”

The Indian side had revised the design after objections from Pakistan and made it a run-of-the-river project.

Pakistan also raised objections to the new design and insisted that under the Indus Basin Water Treaty India could not divert Kishan-Ganga water to Wuller barrage, where it was building an 800MW hydro-power project.

Pakistan raised six objections and then formalised them as questions which are now under discussion.

“Pakistan is ready to concede reasonable time so that the Indian side could come up with the required data, but the process cannot be allowed to linger on,” Mr Shah said. That was why Pakistan was asking for a timeframe as happened in 2004 and India revised the design in 2005, he added.

“Pakistan received data on all its objections but it was incomplete which gave way to fresh objections,” said an insider.

The issue appears to be going the Baghlihar way — the third party arbitration. The Indian side got away with the Baghlihar dam in spite of it being in clear violation of the treaty.

The Indians seemed more inclined towards arbitration than resolving the issue at the commissioners’ level, he said, adding that the optimism on the Pakistani side could be misplaced because the Indians were not expected to address all six objections during the July round.

“Pakistan should prepare for arbitration, but certainly after the July round.”