US embassy cable - 05NEWDELHI3213

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 003213 
 
SIPDIS 
 
E.O. 12958: DECL: 04/27/2015 
TAGS: PREL, ENRG, ECON, IN, PK, INDO-PAK 
SUBJECT: GOI STANDING FIRM AS BAGLIHAR PROCESS UNFOLDS 
 
REF: NEW DELHI 1480 
 
Classified By: PolCouns Geoff Pyatt, for Reasons 1.4 (B, D) 
 
1.  (C) Summary: The Foreign Ministry has denied to us 
reports that the GOI will halt work on the controversial 
Baglihar hydroelectric project to bring the GOP back to the 
negotiating table, maintaining that New Delhi has not changed 
its position regarding the legality of the project (reftel). 
The MEA has told us that the GOI has agreed to make some 
changes in the dam's design to alleviate Islamabad's 
concerns, but Pakistani diplomats in India could not confirm 
this concession.  The World Bank is moving forward with the 
dispute resolution process spelled out under the Indus Water 
Treaty (IWT), although a New Delhi-based World Bank official 
has told us his preference remains a bilateral solution.  On 
the ground, labor issues have helped to delay Baglihar's 
start date by more than one year.  End Summary. 
 
GOI Stance Strong as Concrete 
----------------------------- 
 
2.  (C) MEA Director (Pakistan) Monica Mohta emphatically 
denied to Poloff on April 27 that the GOI was suspending work 
on the Baglihar Dam in exchange for a promise by the GOP to 
withdraw its petition for a World Bank-selected neutral 
expert to adjudicate Pakistani technical objections to the 
dam's design, as reported in the "South Asia Tribune" 
(http://www.satribune.com/archives/200504/P1 arun9.htm) and 
the "Hindustan Times."  Mohta reiterated that: 
 
-- The GOI will continue work on Baglihar, having learned a 
costly lesson when it agreed in 1987 to halt construction of 
the Wullar Barrage/Tulbul Navigation Project.  Eight rounds 
of bilateral talks since then have produced no results for 
that dispute, which remains completely stalled; 
 
-- seeking a neutral expert is "premature," because both 
governments have not exhausted their bilateral efforts.  Both 
sides should return to the table and discuss their concerns 
in good faith; 
 
-- Baglihar is IWT compliant, and the intervention by a 
neutral expert has the potential to exacerbate ill will and 
impede Indo-Pak rapprochement without achieving anything for 
Islamabad; and 
 
-- India's Salal Dam, which is located downriver from 
Baglihar, would be damaged if Baglihar were used for flooding 
or "excessive withholding" water from Pakistan (reftel), as 
Islamabad reportedly fears. 
 
Delhi Reportedly Made Concessions 
--------------------------------- 
 
3.  (C) Mohta also claimed that prior to President 
Musharraf's visit to India, the GOI had conceded 
"two-and-a-half" of Islamabad's six technical objections by 
agreeing to dispense with low-level intakes for turbines that 
would have shortened the project's timeline by eight weeks, 
and replacing a "sluice spillway" with a "shoot spillway." 
She added that during the Musharraf visit, PM Manmohan Singh 
had reiterated the GOI position on Baglihar, including these 
concessions.  The Pakistani High Commission in New Delhi was 
unable to confirm these concessions to us. 
 
World Bank Moves Forward but Prefers Bilateral Solution 
--------------------------------------------- ---------- 
 
4.  (C) The World Bank on April 27 reportedly asked both 
governments to select a neutral expert from a list of three 
internationally renowned authorities on water issues that was 
sent to the two capitals.  If the GOI and GOP cannot agree on 
an expert, the Bank will select one to move the process 
forward.  At the same time, a New Delhi-based World Bank 
official told D/PolCouns that the Bank would still prefer a 
bilateral solution to the impasse. 
Labor Obstacles 
--------------- 
 
5.  (U) A Jammu-based journalist for the "Hindu" reported 
recently that labor agitation at the Baglihar site has 
already set back the completion date for the first of two 
construction phases from the original 2004 target to early 
2006. 
 
Comment 
------- 
 
6.  (C) We are struck by the stark contrast in the media 
reporting Baglihar receives from Pakistani and Indian press 
outlets.  We see in Pakistani media daily, nearly obsessive 
coverage, while the issue is nearly invisible in the Indian 
press.  This disparity is no doubt a reflection of the GOI's 
long-standing view (reftel and previous) that this is a 
technical dispute to be resolved through technical 
consultations, and not a diplomatic quarrel that requires 
intervention at the political level. 
 
7.  (C) Although New Delhi is maintaining its stance on 
Baglihar firmly and confidently, we will watch for any cracks 
in this confidence as the IWT dispute resolution process 
unfolds.  The GOI's historical allergy to "third-party 
intervention" may yet drive them to accommodation; if not, 
the neutral expert would provide a face-saving solution to an 
impasse that is the currently the most visible dispute 
between two countries. 
BLAKE