An IDC Analysis


New Delhi, 24 January 2005

There is great interest in bringing about rapprochement between India and Pakistan and though Kashmir is the main bone of contention the waters of the upper reaches of Chenab and Indus rivers that run through India and then into Pakistan is yet another issue. In fact the Indus Water Treaty has the sanction of the World Bank and has worked thus far with minor irritants but these issues can blow up.

To many military minds in India President Musharraf has been an astute leader for Pakistan. He has beefed up his nuclear defences for a first strike capability, improved the economy and got USA to hold his hand all the way. India by its "no first use", nuclear policy could be lax in its nuclear defence preparations as it takes years to operationalise a system of nuclear release and there are few visible signs that the Armed Forces are in the grid. Hence researchers must look in to the water issues also as Musharraf can bowl googlies and Pakistan is good at cricket. Alok Gupta explains the Baglihar project where a dam is proposed by India in Kashmir on the Chenab River.


Baglihar Project –– The Recent Bone of Contention between India and Pakistan

By Dr. Alok Kumar Gupta*

The Problem

Baglihar Hydro Electric Power Project (BHEP) is constructing a dam on river Chenab in Jammu and Kashmir, which would produce 450MW of electricity for the people of the state. The one billion dollar project is scheduled to become operational from December 2007. Almost 33 percent of the work stands completed. The Baglihar dam is located in Chanderkote in Doda district of Jammu and Kashmir. At the heart of the dispute is the design of the project, which according to Pakistan, provides for submerged gated spillways and, therefore, allows Indian control over Pakistani waters in breach of the Indus Water Treaty signed between India and Pakistan in 1960, brokered by the World Bank. Under the Treaty, India has rights over the waters of the Ravi, Sutlej and Beas rivers while Pakistan has rights over the waters of the Indus, the Chenab and the Jhelum. All the rivers flow from India to Pakistan.

Recent Meeting

A secretary-level meeting took place on January 4–6, 2005 between India and Pakistan to resolve the contention. The meeting was initially scheduled for two days –– January 4 and 5, but was extended by a day since the two delegations could not hammer out a solution. The 12-member Indian team led by Secretary (Water Resources) VK Duggal and the Pakistani delegation headed by their Secretary (Water and Power) Ashfaq Mehmood had held “focused” discussions on six technical areas identified on the first day of the talks. The six technical areas under discussion include the gated spillway and the level of intake tunnels.

The three-day talks failed to resolve the issue as both sides stuck to their positions. Subsequently, Pakistan decided to formally approach the World Bank over the issue requesting for appointment of neutral experts to resolve the dispute. On January 18, 2005 Pakistan formally lodged a petition with the World Bank seeking the appointment of a “neutral expert” under the Indus Water Treaty to sort out the Baglihar dam issue. This is the first time since the last 45-years of the Treaty that Pakistan has approached the WB to intervene. The decision has created a new conflict point in the Indo–Pak relations with enough potential to derail the ongoing composite dialogue between the two countries.

Claims and Counter-Claims

According to Navtej Sarna, spokesperson Ministry of External Affairs, “This is the first time that such detailed technical discussions took place. We found them very useful and some convergence has appeared. We feel that further discussions should take place and have offered Pakistan further discussions on the issue.” … “We believe that the data that we have given to Pakistan should convince them that the technical parameters of the project do not violate the Indus Water Treaty provisions. We believe that further technical discussions would be useful as these talks have been. So this is our offer,” Mr Sarna said. However, if Pakistan was still to choose to go to the World Bank disregarding the Indian offer for further technical discussions, India would respond appropriately, was later stressed by Mr. Sarna.

India, thus, offered to continue the technical discussions for another week but the Pakistani team said it would do so only if construction was stopped at the site. The Indian side, which returned to the table on January 5, 2005 with responses to the six specific technical issues raised by Pakistan, made detailed presentations on the next day. But the stalemate continued as Pakistani negotiators stuck to their objections against the design specifications of the plant. Pakistan was of the view that the presentations only suggested that India was building a ‘‘huge dam’’ and not a run-of-the-river project.

Water and Power Secretary Ashfaq Mahmood said Pakistan has done “everything and shown flexibility” to resolve the issue bilaterally. According to Mahmood, Pakistan had waited for five years, during which it twice decided to approach the World Bank, but dropped the idea. “This was the final attempt but the situation is the same. So, the next step is obvious –– go for appointment of neutral experts,” he further added. He was of the opinion that Pakistan had been talking to India in good faith, hoping that the Baglihar issue would be resolved bilaterally, but expressed regret that India had been “talking and constructing” at the same time.

But Mr. Duggal, the Indian negotiator, sounded hopeful. “The talks were held in a constructive and positive manner...I would say that talks have moved very well.” He said the Indian stand on the Baglihar project was clear: that it was a run-of-the-river project and was fully compatible with the provisions of the Indus Water Treaty between the two countries. India had proposed fresh technical talks to Pakistan on the power project as mentioned earlier. However, now that the matter has been referred to World Bank, it remains to be seen what turn it is going to take.

Pakistan’s Contentions

According to Pakistan India had proposed construction of the dam in 1992 and began building it in 2000 even though it had not approved the design as required by the Indus Water Treaty. Consequently, Pakistan wanted India to halt the ongoing work on the dam. The main reasons given by Pakistan were:

  • It will stop the flow of water into its rivers;

  • It violates the 1960 Indus Water Treaty;

  • It maintains that under the Treaty the use of the Chenab waters is its exclusive privilege and a ‘big dam’ on the river is against the letter and spirit of the Treaty;

  • The gated structure would provide India the capability to manipulate the flow of water to Pakistan’s disadvantage.

Pakistan has decided to invoke Article 9(2)(a) of the 1960 Indus Water Treaty, which provides for settling disputes through neutral experts or arbitration if they cannot be resolved between the two Indus Water Commissioners. Pakistan insists that there can be no turning back. Though Pakistan had never done so with other projects in J&K, particularly Tulbul, which had been hanging fire for more than 17 years.

India’s Contention

India’s contention is that the 450-megawatt power project does not propose to store water and will not disrupt flows. India is unhappy with the turn of events and insists that there were no grounds for apprehension that the dam violated the 1960 Indus Water Treaty between India and Pakistan. It also claims that the neutral experts, if appointed, would also arrive at the same conclusion. Taking cue from the fate of the Tulbul project, India had refused to accede to Islamabad’s request for stopping the construction work till a mutually acceptable settlement was reached. Pakistan asked India to stop work on Tulbul Project for three months but the project has not taken off again since India stopped construction, as a goodwill gesture, seventeen years ago.

In the recently concluded bilateral talks between India and Pakistan on the Baglihar project the Indian side presented quite detailed technical information to the Pakistani side to convince them that there was no ground for any apprehension that the project violated the Indus Water Treaty or any of the technical parameters in the Treaty. The Indian spokesman insisted that this was the first time that such detailed technical discussions were held. On the contrary, the Pakistani side had been maintaining that this was the second time when such Secretary-level detailed technical talks were held.

Jammu and Kashmir

The Government of Jammu and Kashmir accused Pakistan of creating obstacles in the functioning of Baglihar power project. Jammu and Kashmir Finance Minister Muzaffar Beig reacted in the newspapers, “The neighbouring country should not jeopardize our power project. It is built on our river — Chenab. Do Kashmiris have no right on their own waters?” “In fact, it (Baglihar) should not have formed part of the talks between the two sides,” Beig said. Kashmir is facing a huge power shortage but has the potential to generate as much as 15,000 MW to its current production of just 600 MW, the minister said, adding if this continues, then “we would not be able to use our resources.” “If Pakistan claims that it has the interests of the Kashmiri uppermost in its mind, then it should not create obstacles in the functioning of the Baglihar Project, set up by the Government of Jammu and Kashmir”, Beig added. Meanwhile, on January 9, 2005, Jammu and Kashmir Power Development Corporation (JKPDC) signed an agreement with a consortium comprising nine big financial institutions for raising a loan of Rs 17.70 bn (Rs. 1770 crore) for timely completion of the project. The consortium comprises of the Power Finance Corporation (PFC), Rural Electrification Corporation, HUDCO, J-K Bank Limited, Union Bank of India, UCO bank, Central Bank of India, Indian Overseas Bank and Canara Bank.

World Bank’s Stand

The World Bank (WB) after receiving the letter from Pakistan, in its official release said, it would examine the procedures laid down by the Treaty. According to the release the Bank is not a guarantor of the Treaty, but a signatory for certain specified purposes. The release also mentions that many of the purposes for which the WB signed the Treaty have been completed. There were now three remaining responsibilities for the Bank under the Treaty relating to the settlement of differences and disputes. According to the Bank, disagreements by the parties on the interpretation of the provisions of the Treaty are classified into three categories:

  1. Questions are examined by the permanent Indus commission;

  2. Differences by neutral experts; and

  3. Disputes by a court of arbitration.

According to the Bank, the first step under the Treaty was to resolve any “question” through the Permanent Indus Commission itself. If the “question” was not resolved there, it became a “difference” and was referred to a neutral expert, to be appointed by the two countries, or by a third party agreed upon by the two countries. In the absence of such an agreement, the WB, in consultation with the two countries, will appoint the neutral expert. The decision of the neutral expert on all matters within his competence shall be final and binding. The second residual responsibility of the Bank is to manage a trust to meet the expenses of a neutral expert. Finally, the Bank has the responsibility to establish a court of arbitration. If the “difference” does not fall within the mandate of the neutral expert, or if the neutral expert rules that the “difference” should be treated as a “dispute”, then a court of arbitration will be established. Under the Treaty, the WB has a role in the establishment of such a court.

Strategic Implications

Pakistan seems to be worried that the project could present a strategic threat, giving India the control over waters vital to agriculture in Punjab province of Pakistan. It may not have a direct impact on the ongoing composite dialogue process between the two countries but will most certainly be an irritant. Nevertheless, it has all potentiality to derail the ongoing dialogue process between the two countries, as one can comprehend from the given history of relations between the two neighbors. Pakistan, true to its nature, once again is failing to show signs of mature diplomacy. Pakistan seems to be trying to use the issue as a pretext for castigating the image of India in the eyes of the international community. If Pakistan is so interested in resolving the issue why did it not take the matter relating to the Tulbul project to the World Bank. Such bilateral issue must be resolved amicably in the interest of Kashmiri people in particular and the general masses of both the countries in general, rather than getting it internationalized to bully India.

There has been a marked improvement in the recent past in the overall environment and it seems that both the countries have moved away from the tense phase when armies from both the sides were placed in an eyeball to eyeball situation on their respective borders. The announcement relating to confidence building measures is still awaiting articulation and implementation. Under such circumstances both the countries are required to be possessive about the development and maintain the growing bonhomie. A mature diplomacy is an immediate imperative.


  1. Amit Baruah, “Indo-Pak talks on Baglihar dam fail”, The Hindu (New Delhi), January 08, 2005.

  2. Rajiv Sharma, “India proposes fresh talks on Baglihar, Pakistan to move World Bank”, Tribune News Service, January 11, 2005.

  3. “New Delhi to take appropriate action if Pakistan approaches World Bank”, The Tribune, Chandigarh, January 11, 2005.

  4. “JKPDC raises Rs. 17.70 bn loan for Baglihar project”, Business India, January 09, 2005.

  5. Muralidhar Reddy, “Baglihar Project: Expert Verdict binding on India, Pakistan”, The Hindu (New Delhi), January 11, 2005.

  6. Luv Puri, “J& K resents Pak. Opposition to Baglihar project”, The Hindu (New Delhi), January 11, 2005.

  7. Muralidhar Reddy, “Baglihar needs to be resolved: Musharraf”, The Hindu (New Delhi), January 20, 2005.

  8. Muralidhar Reddy, “Pakistan goes to World Bank”, The Hindu (New Delhi), January 19, 2005.

  9. Amit Baruah, “Pakistan decision on Baglihar unjustified”, The Hindu (New Delhi), January 19, 2005.

  10. “Baglihar: World Bank receives Pakistan’s request”, The Hindu (New Delhi), January 20, 2005.

*The author is a Lecturer, Faculty of Policy Sciences at National Law University, Jodhpur.

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