ISLAMABAD, Jan 25: India is about to complete a 22-km tunnel to divert Kishanganga (Neelum) waters to Wullar Lake in violation of the Indus Waters Treaty 1960, which would compromise Pakistan's rights over the river , reduce the river flows and minimise its power generation capacity, it is learnt.

Water and Power Ministry sources told Dawn on Tuesday that Pakistan had received intelligence reports about the progress made by the Indian authorities over the Kishanganga Hydropower Project.

These sources said Pakistan had already lost prior rights of objection over the project and could also lose objection on diversion soon "as this tunnel is the major component of the project having 50 per cent cost of about $1 billion of the whole project."

Like the Chenab, Jhelum river of which Neelum is an integral part belongs to Pakistan under the 1960 treaty. Under the treaty, India cannot divert waters from Jhelum and Chenab rivers.

Pakistan has two main objections over Kishanganga project being built by India. First, prior rights due to its proposed 969-mw Neelum-Jhelum project and secondly Indian diversion is not allowed under the treaty.

Kishanganga Hydroelectric Project is located about 160 kilometres upstream of Muzzafarabad and involved diversion of Kishanganga or Neelum River to a tributary named Bunar Madumati Nullah of River Jhelum through a 22-km tunnel. Its power house will be constructed near Bunkot and the water will be re-routed into the Jhelum river through Wullar Lake.

When completed, the project would reduce flow (pressure) of the Neelum river and thus decrease the power generation capability of Pakistan's proposed 969-mw Neelum-Jhelum Hydropower Project in Azad Kashmir by more than 20 per cent or about 100-mw.

India has continued with the work on Kishanganga project despite clear objections by Pakistan that it could not allow even a minor diversion of the river. The sources said Pakistan first received reports about Indian intentions to develop the Kishanganga project in 1988 but India officially confirmed it in the mid-1990s.

The issue had remained on the agenda of Permanent Indus Commission for more than six years now, the sources said. Pakistan is expected to hold international competitive bidding of its 969-mw Neelum-Jhelum Project by end of March and has asked National Engineering Services of Pakistan (Nespak) to complete formalities immediately.

Pakistan has already asked the World Bank to appoint a neutral expert to resolve its dispute with India on 450-MW Baglihar project on the Chenab. Sources said that diversion by India would not reduce the overall water level in Jehlum on the Pakistani side of the Line of Control (LoC) but would also affect the river flow.

Decline in the river flow reduces the pressure required to generate electricity in Azad Kashmir's Neelum-Jehlum project. But if Islamabad did not start construction of Neelum-Jehlum Hydropower project near Azad Kashmir's capital Muzaffarabad immediately, it is obliged under the treaty to allow India use these waters for power generation without storage.

Under the treaty India could not change the flow of Jehlum river even for power generation that may affect any Pakistani power project. But if there is no power project in Pakistan that could be affected on that particular river, India could divert the river for run-of-the river project but without any storage.

Under the treaty, Pakistan has exclusive rights to use water of western rivers - Indus, Jehlum and Chenab - while eastern rivers - Ravi, Sutlej and Beas - have been assigned to India.