25273 1/12/2005 13:52 05NEWDELHI303 Embassy New Delhi CONFIDENTIAL "This record is a partial extract of the original cable. The full text of the original cable is not available.
" "C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 000303
SIPDIS
E.O. 12958: DECL: 12/11/2015TAGS: PREL, ETTC, ECON, PK, IN, INDO-PAKSUBJECT: INDIA VERY CONFIDENT IT IS RIGHT ON BAGLIHAR DAM
Classified By: PolCouns Geoff Pyatt, Reasons 1.4 (B,D).
1. (C) Summary: In a January 12 meeting with PolCouns, MEAJoint Secretary (Pakistan, Afghanistan, Iran) Arun K Singhwas brimming with confidence that India was in the right onthe Baglihar Dam issue. If Pakistan went forward witharbitration, as it has suggested, India is ready, and will bevindicated, he stated. New Delhi believes the dispute haslittle to do with water, and is primarily a political issueraised by Islamabad to prevent India from completing projectsthat benefit Kashmiris, as the hydroelectric project isdesigned to do. Singh did not see the dispute as derailingthe Composite Dialogue. The World Bank tells us arbitrationis terra incognita for them, suggesting that this case couldeasily continue for a long time, given the manyhypotheticals. End Summary.
2. (C) J/S Arun Singh was unusually confident about India'sposition on Baglihar in a January 12 conversation withPolCouns and Poloffs (other topics septels). ""We have lookedat the dam several times, and our technical and legal expertssay it is treaty compliant,"" he stressed. After the mostrecent round of discussions January 4-7 yielded no results,India had proposed fresh technical talks, on the grounds thatthey could lead to a further convergence of views. MEASpokesman Navtej Sarna told the press on January 11 that theGOI had provided volumes of data beyond treaty requirements,which ""should convince (Pakistan) that the technicalparameters of the project do not violate Indus Waters Treatyprovision."" Singh found it unfortunate that Islamabad seemsprepared to go forward with arbitration, but predicted that""they will be disappointed.""
3. (C) Singh attributed the Pakistani position onarbitration to politics, which he saw as outweighing thetechnical issues. Pakistan wants to prevent water projectsin J&K, he continued, in order to block anything thatbenefits Kashmiris. He asserted that the Baglihar Dam wouldhave a major positive impact on electricity supplies in thestate, which suffer from chronic power shortages. This wouldhave major political benefits for New Delhi, which it wouldnot forego, especially after investing so much in theproject. The Pakistani position was a signal to Kashmiristhat Islamabad has a veto on development in J&K, he stated,which India could not accept.
4. (C) Looking back historically, the Joint Secretary sawthe Dam as analagous in some respects to the WullarBarrage/Tulbul Navigation Project, which the GOI delayed forseveral months as a favor to Benazir Bhutto, not as a treatyprovision. Once the GOI stopped it, he continued, Islamabad""had what it wanted,"" and refused to engage substantivelyafter that. India will not make the same mistake again.Singh recalled that the Indus Waters Treaty had worked verywell so far, and even held up during the 2002 Indo-Pakcrisis, when the Baglihar Dam was also a bilateral problem.
World Bank View---------------
5. (C) In a January 12 conversation with D/Polcouns, a WorldBank New Delhi official who is very familiar with the caseobserved that Pakistan is very serious about seekingarbitration because it sees the bilateral process as goingnowhere. The arbitration process would have to follow astrict series of steps, which could drag on for a year orlonger, but inasmuch as the two sides have never gone thisroute in the past, it is terra incognita. There are hundredsof hypotheticals that could influence the process, and no onecould predict its course, he stated.
Comment-------
6. (C) We have rarely seen Arun Singh more confident on anissue than this one. He was beyond comfortable, indicatingclearly that the GOI has done its homework and is preparedfor arbitration, should it come to that. The MEA attitudethat the dispute is ""not about water,"" however, but aboutKashmir politics, is simplistic because whatever the meritsof this case, water is a factor in Pakistan. In contrast toPakistan, where the dispute is reportedly regularly a frontpage item, in India the story is buried deeply in the papers,and has little public resonance.
7. (C) While it may be preferable for the case to beresolved bilaterally, several years of talks and muchposturing on both sides have shown few results. It isencouraging for Indo-Pak normalization that the parties havea neutral mechanism to decide the outcome, but thehypothetical World Bank timeline for arbitration suggeststhat the dispute could hang over the Composite Dialogue forquite some time, whether it has a direct effect on it or not.Given the local World Bank office's lack of independentviews on this looming dispute, Mission would appreciateWashington perspectives on the views of IBRD headquartersregarding process, timeline, and the status of the Bagliharproject.MULFORD"