176424    11/3/2008 10:33    08ISLAMABAD3456    Embassy Islamabad    UNCLASSIFIED//FOR OFFICIAL USE ONLY    08ISLAMABAD3169    "VZCZCXRO1589 RR RUEHLH RUEHPW DE RUEHIL #3456/01 3081033 ZNR UUUUU ZZH R 031033Z NOV 08 FM AMEMBASSY ISLAMABAD TO RUEHC/SECSTATE WASHDC 9582 INFO RUEHRC/DEPT OF AGRICULTURE WASHDC RUEATRS/DEPT OF TREASURY WASHDC RHEBAAA/DEPT OF ENERGY WASHDC RUEHRC/USDA FAS WASHDC 4273 RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL RHMFISS/CDR USCENTCOM MACDILL AFB FL RUEKJCS/SECDEF WASHINGTON DC RUEHKP/AMCONSUL KARACHI 0543 RUEHLH/AMCONSUL LAHORE 6277 RUEHPW/AMCONSUL PESHAWAR 5121 RUEHNE/AMEMBASSY NEW DELHI 3972 RUEHBUL/AMEMBASSY KABUL 9341 RUEHIL/ODRP ISLAMABAD PK"    "UNCLAS SECTION 01 OF 02 ISLAMABAD 003456

SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ECON, ETRD, EAID, EFIN, ENGY, PK SUBJECT: PAKISTAN SEEKING WATER AS COMPENSATION IN DISPUTE WITH INDIA

REF: Islamabad 3169

1. (SBU) Summary: Faced with a 34 percent drop in water levels, Pakistan alleges that India did not release Pakistan's share of Chanab River water from the Baglihar Dam and after two recent delegations have unsuccessfully visited India to resolve the water dispute, Pakistan may seek compensation under the Indus Basin Water Treaty.  Officially, India dispels Pakistani claims but unofficially, the Indian side admits that ""structural constraints of Baglihar Dam and weather constraints"" have resulted in a reduction of Pakistan's share of water.  The water shortage will likely lower winter crop yields as irrigation levels are lower and has already resulted in increased blackouts due to reduced hydroelectric power generation.  Furthermore, this dispute is reigniting anti-India sentiment in Pakistan.  End summary.

2. (SBU) Two Pakistani delegations visited India during the time period of October 18 through October 25 to investigate Pakistan's allegations that India has violated the bilateral Indus Water Basin Treaty by releasing Pakistan's share of the Chanab River water.  In September, Pakistan's Indus Water Commission claimed India released 0.22 million cusecs (a cusec is one cubic foot) of water instead of the agreed 0.55 billion cusecs due to India's unscheduled filling of the reservoir above the newly constructed Baglihar Dam in India. The first delegation, headed by Pakistan Indus Water Commissioner Jamaat Ali Shah, visited the Baglihar Dam site for inspection of the actual water levels between October 18 and October 20.  Shah subsequently led another GOP delegation to attend a regularly scheduled meeting of the Permanent Indus Water Commission between October 22 and October 25.

3. (SBU) Water Commissioner Shah told EconOff on October 31 that ""after the visit to Baglihar Dam the Pakistani side does not have any doubt that the Indian side did hold Pakistan's share of the water"" in September while the reservoir was filled.  He maintained that the Indian side only provided daily water discharge data from Baglihar Dam and refused to give the raw hourly data saying ""they do not see the need for it.""

4. (SBU) Shah said that officially the Indian side dispelled Pakistani claims that India illegally held water and did not agree to pay compensation to Pakistan.  Unofficially, the Indian side agreed that ""structural constraints of Baglihar Dam and weather constraints"" due to reduced rainfall resulted in a reduction of Pakistan's share.  Shah reported to EconOff that at a dinner for the Permanent Indus Water Commission meeting hosted on October 23, Indian Water Secretary Mr. Panjiar told Pakistan's Ambassador to India Shahid Malik and Commissioner Shah that the decision to pay compensation has to be taken at the highest levels of government and the Water Commissioner cannot make such a decision on behalf of India.

5. (SBU) Publicly, Shah has told the local media that bilateral talks were ""not inconclusive"" but maintained that after a verification of Pakistan's assessment the Indian authorities would have to increase the release of water as compensation.  Shah said he ""told the Indian counterparts that Pakistan is ready to facilitate resolution by not labeling the issue a 'violation' of Indus Water Treaty.  Instead the Indians can say that 'upon Pakistan's request, India has agreed to release extra water' because the farmers are hurting on the Pakistani side.""  He referenced a similar arrangement in 1987 when India held water to fill the Salal Dam on the Chanab River.

6. (SBU) Privately, GOP officials acknowledge they are very worried about future plans for India to build numerous other dams (reportedly up to eight additional dams) on the Chanab River and the likelihood that water scarcity driven by India's increased usage will become a more frequent occurrence in Pakistan.  GOP officials also privately acknowledge that any dispute resolution can be more effective and more quickly obtained if Pakistan seeks increased water inflows as compensation rather than a monetary value.

7. (SBU) Pakistan has invited Indian officials to visit Head Marala; the water gauge point on the Pakistani side, to measure the water received from India but dates for the Indian delegation's visit are not confirmed yet.  Shah said ""we are willing to share raw hourly

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data with the Indians to prove our claims"" that our levels have dropped significantly.

8. (SBU) Comment. Pakistan is facing a 34 percent water shortage which translates into lower crop yields for winter wheat as irrigation levels are lowered and has already resulted in extended blackouts across the country due to reduced hydropower production. This water issue has the potential to become an official 'dispute' under the Indus Basin Water Treaty if left unresolved and has already resulted in increased anti-India sentiment among the local population.  End Comment.

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