The Indus Water Treaty was a water sharing formula between Indiaand Pakistan, which was brokered by the World Bank in 1960.Despite wars between India and Pakistan and frosty relationship,the Treaty has survived, and to a large extent has been working asenvisaged in 1960.A Commission was set up which meets regularly and exchange dataand tries to resolve disputes. If the Commission fails to resolve adispute, then it has to be resolved by both governments. And if both governments and the Commission fail to resolve the disputethen it could be referred to a Neutral Expert in a Court of Arbitration.The Court of Arbitration has to see if the proposed diversion of water from one tributary of Jhelum River to another is permissibleunder the Treaty or not. This diversion reduces flow of water inNeelam River, but it does not reduce overall flow of water enteringPakistan, as the diverted water is released in another tributary of Jhelum River.It is for the Court of Arbitration to decide, but one could foreseethree possible outcomes:
that the diversion of water is not permitted under the Treaty;
that the diversion is permissible;
Mixed findings.In case of the first finding India will have to abandon the projectwhich has cost them in billions. In case of the second finding thePakistani project will suffer. It is probable that the Court of Arbitration might reach a mixed verdict – that the diversion ispermitted subject to certain changes to minimise adversedownstream impacts.As noted earlier, arbitration process is very expensive and lengthyone. It could take a good few years before the Court gives itsverdict. In the mean time both governments are racing to completetheir Projects, as the understanding is if a project is near tocompletion it will be very difficult for the Court to give a totallynegative verdict.I don’t believe for a minute that India is spending millions of rupeeson a project that it would abandon after the verdict of the Court.Indian Federal Minister of Power Jairam Ramesh, during a recentvisit to Kashmir said the Kishanganga project had geo-strategicimportance to India. He said: "This is an issue with geo -strategicand foreign policy implications". The Indian government is workingat full speed and wants to complete the Project by 2015.