An issue which has been fiercely pulsating between India and Pakistan over the Kishanganga hydropower project is expected to get the final verdict before the end of this month. In September 2011, Hague's Permanent Court of Arbitration (PCA) issued an interim order to India for suspending the construction of any permanent head works on the Kishanganga project. Despite losing the Baglihar and Chutak hydropower cases, there is definitely a sense of cautious optimism in Pakistan over the expected final decision on the project. As the India-Pakistan relationship lurches from tumultuous to uncertain over the water issues, India needs to be agile and assume leadership in cooperative and collaborative arrangements for hydropower development in the Indus basin.

Construction of the Kishanganga project started in 2007 and is expected to complete by 2016. It is located on the river Kishanganga, a tributary of river Jhelum, in Baramulla district of Jammu & Kashmir. Almost a year later, Pakistan started constructing the Neelum Jhelum project on the Neelum River, located in Pakistan Occupied Kashmir, with a capacity of 969 MW and presumed annual benefits of Rs 45 billion. Both follow similar principle of design and operation i.e. to divert a portion of the water to the power station before it is discharged back into the river. Pakistan fears that the Kishanganga Project will divert a portion of the Kishanganga (Neelum River in Pakistan) which will reduce power generation at the Neelum-Jhelum Hydropower Plant. Therefore, in 2010, it appealed to the International Court of Justice for resolution of the conflict under the provisions of the Indus Waters Treaty (IWT).

While both the countries have substantial arguments for justifying their respective hydropower projects, the issue appears to be more critical for Pakistan for two main underlined reasons. First, Pakistan's power shortage has reached an average of 12-13%, according to an official source. The average energy consumption in Pakistan is around 2.5 barrels of oil equivalent, which is way below the world average, but not far from India at 2.8 barrels/ person. A recent research report by the Sustainable Development Policy Institute in Pakistan suggested that the only way out of this crisis is to aggressively invest in hydropower development, besides improving fuel efficiency and introducing smart girds. Federal government of Pakistan plans to build five new dams with a total capacity of 20,000 MW to meet the growing power demand. Therefore, the mega hydropower projects in Pakistan hold critical significance to meet the threshold developmental objectives.

Second, emotional overtones over the Indus Waters have been more of an existential issue than any other. Nothing arouses the sensitivities of India and Pakistan as the dispute over shared water. Kishanganga project is another case in point, besides Baglihar, Chutak and Nimoo Bazgo hydropower projects. According to the provisions in IWT, the country that completes its project first will secure priority rights to the river. Hence, Pakistan has been vying to complete the Neelum Jhelum project before its Indian counterpart.

Unfortunately, there have been major delays in the construction of the projects on both sides of the border. In India, the environmental and social concerns raised over the project have spurted internal conflict over the Kishanganga project. One the other hand, in Pakistan, Neelum Jhelum project is halted due to lack of financial assistance and other obstructions caused by technical and administrative issues. Interesting to note is the lack of environmental and social objections in Pakistan over the project. Lack of data on environmental and social assessments have left a blurred picture on the adverse impacts of the Neelum Jhelum project.

Notwithstanding the political conflict stirred by the dispute which invariably gets more attention, the cumulative impacts of both the project need deeper consideration. What will happen to the Indus basin watershed with two giant hydro-power projects lined next to each other? In the race of getting the righteous claim over the shared resource, ecological integrity of the basin may face threat in the future. This calls for mutual and collaborative development of the hydro-potential in the Indus basin. India, being an upper riparian and less dependent on the Indus waters as compared to Pakistan, needs to re-invent the role and scope of its leadership for an integrated regional hydropower development.

Sonali Mittra, Observer Research Foundation