Senate Standing Committee on Water and Power was informed by officials of the Water and Power Ministry that if Kishanganga Dam is built, it would translate into 21 percent reduced Neelum inflow with its consequent impact on electricity generation.
The officials of the ministry, while updating the parliamentary panel, noted that Kishanganga is violative of the World Bank-brokered Indus Water Treaty (IWT) and that Pakistan has submitted a response to the International Court of Arbitration, which would hold a second hearing by the end of July at the Hague; and, in turn, India would be required to submit its response in a six months time.
The 330 MW Kishanganga hydroelectric power project requires Kishanganga be dammed and the water diverted through a 27-kilometre tunnel dug through the mountains to Bandipore leading to the Neelum and Jhelum rivers, which at present join each other near Muzaffarabad at Domail, to meet in the Indian-held Kashmir. Pakistan, in turn, decided to construct a 969 MW hydro power project across the Jhelum and claims that Kishanganga would reduce the power generation capacity of the 969-megawatt Neelum-Jhelum plant by about 11 percent.
What the ministry officials did not reveal to the panel was one critical fact. According to a section of the press the Indians have already completed 40 percent construction work on the Kishanganga dam and another six months of construction would almost certainly lead to a decision similar to what Pakistan was subjected to with respect to Baglihar Dam: a dam near completion simply cannot be dismantled. While one can justify the Water and Power Ministry's failure to understand that time was of critical essence with regard to Baglihar Dam, as it was the first dam that India built that was violative of the IWT after all. Yet there is no justification for the same thing happening a second time around. In other words some heads should roll and at the same time the legal team dealing with the case in the international court, no doubt at a very substantial fee may require a revisit.
The Water and Power Ministry officials also revealed to the panel that they were awaiting approval of a loan from the Asian Development Bank (ADB) prior to commencing construction of the Diamer Bhasha Dam. This wait appears to be inexplicable. Part of the blame can be laid squarely at the doorstep of the ADB management that has been stringing the country along for several years instead of openly admitting that Diamer Bhasha Dam may be violative of its environment and resettlement policies and therefore unlikely to be approved by its Board of Directors. To further complicate matters with respect to the approval of any ADB loan for construction of the Diamer Bhasha Dam is the fact that its construction will cause the sinking of over 50,000 ancient rock carvings, destroying precious archaeological evidence of inhabitation of the area since the Epipaleolithic and Neolithic eras.
However, a major part of the blame must rest with the Minister of Water and Power. Over the years, the ADB website clearly indicates that there have not been significant interventions in hydroelectric projects. ADB funded water sector loans with dam component (draft 31 August 2005) as per ADB's website identifies project completion as follows: (i) in 2008 there was one (Gansu Clean Energy Development) with a loan of 35 million dollars; (ii) in 2009 there were two (with one project envisaging the raising of an existing dam) with a loan of 144 million dollars and the other project intervention was no more than 120 million dollars titled GMS Nan Theun II Hydroelectric Project; (iii) in 2003 Zeijiang-Shanxi Water Supply Project (which had components of flood control, irrigation as well as hydroelectricity) had a total loan component of 100 million dollars and Nam Leuk Hydropower also completed in 2003 was extended a 52 million dollars loan; (iv) ADB made a small intervention of 160 million dollars for Kali Gandaki Hydroelectric power completed in 2004. ADB support for these projects was at OCR, or market rates of return.
The ADB is funding several small projects including 37 million for the 125 million dollar New Bong Hydropower Project as well as other small projects in Punjab and Khyber-Pakhtunkhwa. Thus the Water and Power Ministry needs to go on the ADB website and assess how much assistance can be reasonably expected, if at all, to meet the over 12.6 billion dollars cost of Diamer Bhasha Dam.