176424    11/3/2008 10:33    08ISLAMABAD3456    Embassy Islamabad    UNCLASSIFIED//FOR OFFICIAL USE ONLY    08ISLAMABAD3169    "VZCZCXRO1589RR RUEHLH RUEHPWDE RUEHIL #3456/01 3081033ZNR UUUUU ZZHR 031033Z NOV 08FM AMEMBASSY ISLAMABADTO RUEHC/SECSTATE WASHDC 9582INFO RUEHRC/DEPT OF AGRICULTURE WASHDCRUEATRS/DEPT OF TREASURY WASHDCRHEBAAA/DEPT OF ENERGY WASHDCRUEHRC/USDA FAS WASHDC 4273RUCPDOC/DEPT OF COMMERCE WASHINGTON DCRUMICEA/USCENTCOM INTEL CEN MACDILL AFB FLRHMFISS/CDR USCENTCOM MACDILL AFB FLRUEKJCS/SECDEF WASHINGTON DCRUEHKP/AMCONSUL KARACHI 0543RUEHLH/AMCONSUL LAHORE 6277RUEHPW/AMCONSUL PESHAWAR 5121RUEHNE/AMEMBASSY NEW DELHI 3972RUEHBUL/AMEMBASSY KABUL 9341RUEHIL/ODRP ISLAMABAD PK"    "UNCLAS SECTION 01 OF 02 ISLAMABAD 003456

SENSITIVESIPDISE.O. 12958: N/ATAGS: ECON, ETRD, EAID, EFIN, ENGY, PKSUBJECT: PAKISTAN SEEKING WATER AS COMPENSATION IN DISPUTE WITH INDIA

REF: Islamabad 3169

1. (SBU) Summary: Faced with a 34 percent drop in water levels,Pakistan alleges that India did not release Pakistan's share ofChanab River water from the Baglihar Dam and after two recentdelegations have unsuccessfully visited India to resolve the waterdispute, Pakistan may seek compensation under the Indus Basin WaterTreaty.  Officially, India dispels Pakistani claims butunofficially, the Indian side admits that ""structural constraints ofBaglihar Dam and weather constraints"" have resulted in a reductionof Pakistan's share of water.  The water shortage will likely lowerwinter crop yields as irrigation levels are lower and has alreadyresulted in increased blackouts due to reduced hydroelectric powergeneration.  Furthermore, this dispute is reigniting anti-Indiasentiment in Pakistan.  End summary.

2. (SBU) Two Pakistani delegations visited India during the timeperiod of October 18 through October 25 to investigate Pakistan'sallegations that India has violated the bilateral Indus Water BasinTreaty by releasing Pakistan's share of the Chanab River water.  InSeptember, Pakistan's Indus Water Commission claimed India released0.22 million cusecs (a cusec is one cubic foot) of water instead ofthe agreed 0.55 billion cusecs due to India's unscheduled filling ofthe reservoir above the newly constructed Baglihar Dam in India.The first delegation, headed by Pakistan Indus Water CommissionerJamaat Ali Shah, visited the Baglihar Dam site for inspection of theactual water levels between October 18 and October 20.  Shahsubsequently led another GOP delegation to attend a regularlyscheduled meeting of the Permanent Indus Water Commission betweenOctober 22 and October 25.

3. (SBU) Water Commissioner Shah told EconOff on October 31 that""after the visit to Baglihar Dam the Pakistani side does not haveany doubt that the Indian side did hold Pakistan's share of thewater"" in September while the reservoir was filled.  He maintainedthat the Indian side only provided daily water discharge data fromBaglihar Dam and refused to give the raw hourly data saying ""they donot see the need for it.""

4. (SBU) Shah said that officially the Indian side dispelledPakistani claims that India illegally held water and did not agreeto pay compensation to Pakistan.  Unofficially, the Indian sideagreed that ""structural constraints of Baglihar Dam and weatherconstraints"" due to reduced rainfall resulted in a reduction ofPakistan's share.  Shah reported to EconOff that at a dinner for thePermanent Indus Water Commission meeting hosted on October 23,Indian Water Secretary Mr. Panjiar told Pakistan's Ambassador toIndia Shahid Malik and Commissioner Shah that the decision to paycompensation has to be taken at the highest levels of government andthe Water Commissioner cannot make such a decision on behalf ofIndia.

5. (SBU) Publicly, Shah has told the local media that bilateraltalks were ""not inconclusive"" but maintained that after averification of Pakistan's assessment the Indian authorities wouldhave to increase the release of water as compensation.  Shah said he""told the Indian counterparts that Pakistan is ready to facilitateresolution by not labeling the issue a 'violation' of Indus WaterTreaty.  Instead the Indians can say that 'upon Pakistan's request,India has agreed to release extra water' because the farmers arehurting on the Pakistani side.""  He referenced a similar arrangementin 1987 when India held water to fill the Salal Dam on the ChanabRiver.

6. (SBU) Privately, GOP officials acknowledge they are very worriedabout future plans for India to build numerous other dams(reportedly up to eight additional dams) on the Chanab River and thelikelihood that water scarcity driven by India's increased usagewill become a more frequent occurrence in Pakistan.  GOP officialsalso privately acknowledge that any dispute resolution can be moreeffective and more quickly obtained if Pakistan seeks increasedwater inflows as compensation rather than a monetary value.

7. (SBU) Pakistan has invited Indian officials to visit Head Marala;the water gauge point on the Pakistani side, to measure the waterreceived from India but dates for the Indian delegation's visit arenot confirmed yet.  Shah said ""we are willing to share raw hourly

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data with the Indians to prove our claims"" that our levels havedropped significantly.

8. (SBU) Comment. Pakistan is facing a 34 percent water shortagewhich translates into lower crop yields for winter wheat asirrigation levels are lowered and has already resulted in extendedblackouts across the country due to reduced hydropower production.This water issue has the potential to become an official 'dispute'under the Indus Basin Water Treaty if left unresolved and hasalready resulted in increased anti-India sentiment among the localpopulation.  End Comment.

PATTERSON"