September 06, 2014
In 2011 Taj Mohi-u-Din, then the minister of irrigation in the state of Jammu & Kashmir (J&K), accused India’s National Hydro-electric Power Corporation (NHPC) of treating the state like the British East India Company treated colonised India. Since then the issue has become more and more politically salient, with Kashmiris now regularly complaining about the “hijacking” of their water resources.
Kashmiris believe that the NHPC, which generates over 2,000 MW of energy from Kashmir, is only interested in generating profits while depriving J&K, of the benefits of its most important economic asset – its water resources. This perception was only bolstered when a recent Right To Information (RTI) application led to the revelation that NHPC had earned INR 19,442 crore (USD 2,922 million) in the past 14 years from electricity sales. To add insult to injury, J&K was the second largest buyer of electricity produced in its own territory.
The J&K state owns power projects which generate only 761 MW while peak consumption in the state reaches 2,800 MW of energy. When the Peoples Democratic Party (PDP) was in opposition in 2009, chief spokesman Muzaffar Hussain Baig had put forward a private member bill seeking to re-negotiate a deal with NHPC. This Bill – like most private members’ Bills – was rejected, despite the fact that many NC leaders had supported it.
Baig, a prominent legal expert and former finance minister of J&K, had accused New Delhi of making a deal with Pakistan arbitrarily on behalf of J&K despite water being a state, not a central, subject. (Under the Indian Constitution, states have primacy over some issues, while the central government has primacy over others.) According to Baig, if J&K was able to harness its own water resources, it would earn an annual revenue of INR 720 billion (USD 11 billion) by exploiting only one-third of its total potential. But, according to Baig, India was not willing to give counter guarantees to foreign investors who were ready to invest in Kashmir.
The former executive director of projects at the State Power Development Corporation (SPDC), Zahoor Ahmad Chat, agrees with Baig. He said that harnessing the hydropower potential of the state could earn J&K an additional annual revenue of about INR 150 billion (USD 2.2 billion) from the export of surplus power, even after meeting J&K’s own power requirements.
Attacking the Indus Waters Treaty
Kashmiris also blame the World Bank-mediated 1960 Indus Waters Treaty (IWT) between India and Pakistan which, according to them, has completely disregarded the economic interests of Kashmiris. The IWT is a mechanism for regulating the flow of the transboundary Indus River and its five tributaries – Jhelum, Chenab, Ravi, Beas and Sutlej – between India and Pakistan.
Under the treaty, Pakistan received exclusive use of waters from the Indus and its westward flowing tributaries of the Jhelum and Chenab, while the Ravi, Beas and Sutlej rivers were allocated for India’s use. Experts, civil society, political parties and chambers of industries and commerce unanimously decry the treaty, and its effects on Kashmir’s economy. The rivers over whose control Pakistan has rights are all the ones that flow through Kashmir.
Antagonism in the Assembly
Following subdued disapproval for the IWT, Kashmiris formally started opposing the division of their water resources between India and Pakistan in 2002 with the Jammu & Kashmir legislative assembly passing a resolution to seek the termination of this treaty. Since then the IWT has become a regular feature of debates and discussions in J&K’s assembly.
In 2009, during a debate in the Assembly, the NC politician, Nazir Gurezi, termed the IWT “a sign of slavery” for Kashmiris while another NC leader, Mir Saifullah said that the signing of this treaty marked the beginning of human rights abuses in J&K. While the IWT was signed in 1960, Saifullah was drawing a parallel between it and the many accusations of human rights abuse during the long-running armed insurgency in J&K, which began in 1989.
Losses and the compensation
In almost every assembly session, the issue of losses to the state due to IWT is highlighted by members of the NC and the PDP, as well as other parties. In the ongoing budget session of the state assembly, which started on May 25, legislators like Mohammad Yousuf Tarigami and Ali Mohammad Sagar raised the IWT issue and were supported by most of the members.
Having realised that the termination of the treaty is not legally possible, the legislators, irrespective of party affiliation, now demand that the losses to J&K due to IWT should be quantified so that compensation of these losses is sought from New Delhi.
In its response, the government said that it has started the process of quantifying the losses and fresh tenders will soon be announced for international consultation firms to bid for taking up the assignment. “We are hopeful about the compensation,” the government said. Earlier, the UK-based M/S Halcrow Group, which was shortlisted for quantifying the losses, had retracted its bid, because the validity for the project had expired.
Transfer of power projects
In March this year, J&K’s first woman chief minister, Mehbooba Mufti of the PDP, came to power after her father’s death. He had been the chief minister of J&K until then. In the period after her father’s death she was involved in long negotiations with the PDP’s coalition partner, the Bharatiya Janata Party (BJP), which also leads the ruling coalition in India’s central government. She was purportedly reassured by the BJP that the 390 MW Dul Hasti and 480 MW Uri-I power projects would be transferred to the state government.
Earlier, her father had negotiated an Agenda of Alliance (AoA), in which the PDP and BJP had agreed that the state government and the union government would explore ways to transfer the power projects. But, until the time of his death, no headway was made.
The AoA also promises that the J&K government will secure a share in the profits earned by NHPC by exploiting Kashmir’s water resources and would also revise all royalty agreements – currently the state gets only 12% royalty.
None of these points in the AoA have received any serious attention so far.
Chat says that the return of NHPC-constructed projects back to J&K was the main ingredient enshrined in the original MoUs with the NHPC, “but now they are backtracking by bullying us as big brothers and super masters.” According to him, it would be a miracle if the projects are returned.
His concerns are not ill-founded. Just a few weeks after Mehbooba Mufti took charge as chief minister of J&K, the minister of state for power, coal, new and renewable energy, Piyush Goyal, made a statement saying the power projects could not be returned to J&K because of legal and financial problems. He also declined to raise the royalty of J&K to a proposed 25% saying all other states receive 12%.
This created confusion among the legislators, especially those in the opposition who accused the PDP-BJP state government of hoodwinking the people. “Please tell the truth to the people that you can’t get these power projects back. Why you are misleading them and making false promises to them?” demanded the NC legislator, Mian Altaf, during a recent debate in the assembly.
Whatever happens with the power projects, though, it seems that the politics of water will continue to roil J&K for some time to come.