C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 000303

SIPDIS

E.O. 12958: DECL: 12/11/2015
TAGS: PREL ETTC ECON PK IN INDO PAK

SUBJECT: 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, MEA Joint Secretary (Pakistan, Afghanistan, Iran) Arun K Singh was brimming with confidence that India was in the right on the Baglihar Dam issue. If Pakistan went forward with arbitration, as it has suggested, India is ready, and will be vindicated, he stated. New Delhi believes the dispute has little to do with water, and is primarily a political issue raised by Islamabad to prevent India from completing projects that benefit Kashmiris, as the hydroelectric project is designed to do. Singh did not see the dispute as derailing the Composite Dialogue. The World Bank tells us arbitration is terra incognita for them, suggesting that this case could easily continue for a long time, given the many hypotheticals. End Summary.


2. (C) J/S Arun Singh was unusually confident about India's position on Baglihar in a January 12 conversation with PolCouns and Poloffs (other topics septels). ""We have looked at the dam several times, and our technical and legal experts say it is treaty compliant,"" he stressed. After the most recent round of discussions January 4-7 yielded no results, India had proposed fresh technical talks, on the grounds that they could lead to a further convergence of views. MEA Spokesman Navtej Sarna told the press on January 11 that the GOI had provided volumes of data beyond treaty requirements, which ""should convince (Pakistan) that the technical parameters of the project do not violate Indus Waters Treaty provision."" Singh found it unfortunate that Islamabad seems prepared to go forward with arbitration, but predicted that ""they will be disappointed.""


3. (C) Singh attributed the Pakistani position on arbitration to politics, which he saw as outweighing the technical issues. Pakistan wants to prevent water projects in J&K, he continued, in order to block anything that benefits Kashmiris. He asserted that the Baglihar Dam would have a major positive impact on electricity supplies in the state, which suffer from chronic power shortages. This would have major political benefits for New Delhi, which it would not forego, especially after investing so much in the project. The Pakistani position was a signal to Kashmiris that Islamabad has a veto on development in J&K, he stated, which India could not accept.


4. (C) Looking back historically, the Joint Secretary saw the Dam as analagous in some respects to the Wullar Barrage/Tulbul Navigation Project, which the GOI delayed for several months as a favor to Benazir Bhutto, not as a treaty provision. Once the GOI stopped it, he continued, Islamabad ""had what it wanted,"" and refused to engage substantively after that. India will not make the same mistake again.
Singh recalled that the Indus Waters Treaty had worked very well so far, and even held up during the 2002 Indo-Pak crisis, when the Baglihar Dam was also a bilateral problem.

World Bank View
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5. (C) In a January 12 conversation with D/Polcouns, a World Bank New Delhi official who is very familiar with the case observed that Pakistan is very serious about seeking arbitration because it sees the bilateral process as going nowhere. The arbitration process would have to follow a strict series of steps, which could drag on for a year or longer, but inasmuch as the two sides have never gone this route in the past, it is terra incognita. There are hundreds of hypotheticals that could influence the process, and no one could predict its course, he stated.
Comment
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6. (C) We have rarely seen Arun Singh more confident on an issue than this one. He was beyond comfortable, indicating clearly that the GOI has done its homework and is prepared for arbitration, should it come to that. The MEA attitude that the dispute is ""not about water,"" however, but about Kashmir politics, is simplistic because whatever the merits of this case, water is a factor in Pakistan. In contrast to Pakistan, where the dispute is reportedly regularly a front page 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 be resolved bilaterally, several years of talks and much posturing on both sides have shown few results. It is encouraging for Indo-Pak normalization that the parties have a neutral mechanism to decide the outcome, but the hypothetical World Bank timeline for arbitration suggests that the dispute could hang over the Composite Dialogue for quite some time, whether it has a direct effect on it or not.
Given the local World Bank office's lack of independent views on this looming dispute, Mission would appreciate Washington perspectives on the views of IBRD headquarters regarding process, timeline, and the status of the Baglihar project.
MULFORD