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SENSITIVESIPDIS

E.O. 12958:  N/ATAGS: ECON, ETRD, EAID, EFIN, ENGY, PKSUBJECT: WATER DISPUTE BETWEEN PAKISTAN AND INDIA

1. (SBU) Summary: Construction on the first phase of the BagliharHydroelectric Power Project, on the Chenab River in theIndian-administered state of Jammu and Kashmir was completed inAugust.  Since then, Pakistan claims that water shares, as laid outin 1960 Indus Water Treaty, have been drastically reduced, and thatIndia has illegally filled the dam, contrary to a previously agreedupon schedule.  Since 1999, Pakistan has raised concerns that thedesign parameters of the dam are illegal under the treaty.  IndianPrime Minister Manmohan Singh is reported by the media to haveinvited Pakistan's Water Commissioner to inspect the Baglihar dam,however no official visit has been scheduled to date.  End Summary.

WATER SCARCITY IN PAKISTAN- - - - - - - - - - - - - -

2. (SBU) Pakistan claims that under the 1960 Indus Water treaty,Pakistan should receive 55,000 cusecs of water however Pakistan'sshare was drastically reduced within recent weeks and hassignificantly damaged crop production.  Pakistan further claims thatthey received less than half of their allotted share of water withonly approximately 13,000 cusecs during the winter (October-March)and a maximum of 29,000 cusecs during the summer (April-October).India claims that any reduction in water levels is due to droughtconditions in the catchment areas of the Chenab River.  Pakistaniofficials agree that the flow was lower than normal but suspectIndia of foul play since India did not give Pakistan water inflowand outflow data and managed to fill the Baglihar Dam within onemonth of completion.

3. (SBU) Pakistan's Commissioner for Indus Waters, Syed Jamait AliShah, told EconOff that under the Indus Water Treaty, India andPakistan's commissioners were supposed to agree to a schedule forfilling the dam.  Pakistan made a request to solidify agreement on aschedule in February 2008, with similar requests made again in Mayand June.  According to Shah, Indian counterparts sent an email onAugust 7 stating that they will tentatively be filling the damAugust 10 through August 31, 2008.  However, on August 19,Pakistan's water flows were suddenly reduced by 20,000 cusecs andPakistan believes this reduced flow is due to India's illegalstorage of 0.2 million cubic acre-feet of water in the dam.Pakistan protested officially through the Ministry of ForeignAffairs on September 4, 5 and 12, but has not yet received any replyfrom the Government of India.  Commissioner Shah said that ""Pakistanwould have facilitated India filling its dam by agreeing to useChenab water and releasing more water in river Ravi and Sultej, amechanism that has been successfully tried before.""  Shah furtherclaimed that ""water experts from the Indian side were significantlydeficient in performing their duties and it would not be verydifficult for Pakistan to prove that India was holding waterillegally when it gets to arbitration.""

4. (SBU) Media reports that on September 24, on the margins of theUnited Nations meetings, Pakistan's President Asif Ali Zardariraised the issue with Indian Prime Minister Manmohan Singh who haspledged to resolve the water dispute with Pakistan in the spirit ofthe Indus Water Treaty.  Singh invited Pakistan's Water Commissionerto visit India in October to inspect the controversial Baglihar Damproject on the Chenab River.  Commissioner Shah further remarked toEconOff that he had ""not received an official invitation to visitthe dam site yet"" but noted that ""I will go if and when the Indianspermit me to come.""

Design Controversy and Verdict-------------------------------

5. (U) Baglihar Dam, also known as Baglihar Hydroelectric PowerProject, is a run-of-the-river power project on the Chenab River inthe southern Doda district of the Indian-administered state of Jammuand Kashmir.  The project was conceived in 1992 and approved in1996.  Construction began in 1999, with the first phase scheduled tobe complete in 2004.  Disputes on specification delayed the firstphase of the project, which was just completed in September with aninstalled capacity of 450 mega watts at a cost of USD 335 million.India has not announced when the second phase will begin but plansincluded expansion to 900 mega watts of installed capacity at anestimated cost of USD 1 billion.

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6. (U) After construction began in 1999, Pakistan raised concernsthat the design parameters of Baglihar Dam violated the Indus WaterTreaty of 1960.  The Indus Water Treaty provided India withexclusive control to three eastern rivers - the Sutlej, the Beas andthe Ravi - while Pakistan gained exclusive control over threewestern rivers - the Indus, the Jhelum and the Chenab.  The IndusWater Treaty contains provisions allowing India and Pakistan toestablish river-run power projects with limited reservoir capacityand flow control needed for feasible power generation.  Pakistan hasnot objected to several run-of-the-river projects undertaken byIndia, however concerns were raised over Baglihar.  Pakistan claimedthat some design parameters exceeded what was needed for feasiblepower generation and that India would gain an excessive ability toaccelerate, decelerate or block the flow of the river.

7. (U) Between 1999-2004 India and Pakistan held several rounds oftalks on the design of projects without agreement and after thefailure of these talks on January 18, 2005, Pakistan raised sixobjections to the World Bank, a broker and signatory of Indus WaterTreaty.  In April 2005, the World Bank decided that Pakistan's claimconstituted a ""Difference"", a classification between the lessserious ""Question"" and the more serious ""Dispute"" under the IndusWater Treaty.  In May 2005, Professor Raymond Lafitte, a Swiss civilengineer, was appointed by the World Bank to adjudicate thedifference.

8. (SBU) Lafitte declared his final verdict on February 12, 2007,and partially upheld some of Pakistan's objections, such asdeclaring that the storage capacity of Baglihar Dam be reduced by13.5 percent, the height of the dam structure be reduced by 1.5meters and the power intake tunnels be raised by 3 meters, therebylimiting some flow control capabilities compared to the earlierdesign.  However, Lafitte rejected Pakistani objections on theheight and gated control of the spillway and declared that theseconform to the present engineering norms.

9. (SBU) Both Pakistan and India agreed that they will abide by thefinal verdict and the World Bank's final report acknowledged India'sright to construct gated spillways and allowed storage of 32.58million cubic meters as opposed to India's demand for 37.5 millioncubic meters.  The report also recommended a reduction of the heightof the dam from 4.5 meters to 3.0 meters.

10. (SBU) Comment: Indian claims that the Chenab River had lesswater this year is true to some extent, but the fact that Indiafilled Baglihar with 0.2 million cubic acre-feet of water is alsotelling.  This may be a reason India has not shared water inflow andoutflow data with Pakistan and  Pakistan's multiple requests toagree to a schedule to fill the dam fell on deaf ears.  Restarting aComposite Dialogue is perhaps the only way to find an amicablesolution to this and many other potential disputes between theneighbors.  As economic woes in Pakistan continue to intensify,domestic agricultural production becomes more essential for foodsecurity and water becomes a more highly sought commodity across theline of control.

PATTERSON"