US fund flow into Pakistan occupied Kashmir dam floods Delhi with concern

Dipanjan Roy Chaudhury, ET Bureau 

Oct 21, 2014

(The Modi government…)

NEW DELHI: India, upset with a recent US move to mobilise funds for a hydel-power project in Pakistan occupied Kashmir (PoK), will lodge a protest with the Obama administration for supporting a venture in a territory which it considers to be illegally occupied by Islamabad.

Delhi, that has long protested moves by outsiders including China to support Diamer-Bhasha dam hydel-power and irrigation project and other infrastructure ventures in PoK, is particularly peeved as the US is acting decision comes at a time when Pakistan has upped the ante on Jammu & Kashmir through repeated ceasefire violations and subsequent efforts to internationalise the issue.

The Modi government is expected to use diplomatic channels to lodge a protest with the US, official sources said, adding that PoK was under illegal occupation of Pakistan and any infrastructure project in that area is illegal. Delhi maintains that the entire state of Jammu & Kashmir, including the PoK, is an integral part of India. Delhi had always protested against the construction of Diamer-Bhasa project located in Gilgit-Baltistan area of PoK. The issue has been repeatedly raised with both China and Pakistan in the past, sources recalled.

Beijing's total support to Pakistan's projects in PoK is to the tune of $12-15 billion. The dam site was an integral part of India by virtue of Jammu & Kashmir's accession to the country in 1947, sources stressed. There are also fears that the reservoir of this dam would inundate large parts of land in northern part of Jammu and Kashmir adjoining PoK. The project site is 165 km downstream of Gilgit, capital of northern areas of PoK.

Last week, the Obama administration had organized a fund-raising event in Washington to seek support for the 4,500 MW Diamer-Bhasha project. USAID Chief Rajiv Shah, who was once in the race to become envoy to India, and Dan Feldman, US Special Representative for Afghanistan-Pakistan, attended the event.

"Investment in the Diamer Bhasha dam is the smartest choice for Pakistan," Feldman was quoted in a Pakistani media report days after the event. Expressing similar sentiment, US Ambassador to Pakistan Richard Olson said in Lahore recently: "This project presents exciting opportunities for foreign and local investors to profit, while bringing critically needed energy, water, and foreign investment to Pakistan."

Pakistan's Finance Minister Ishaq Dar and Water, Power and Defense Minister Khawaja Muhammad Asif was present at the Washington event to attract US and international investors for the project, sources informed. Incidentally the fund-raising event was organized less than ten days after Obama met Prime Minister Narendra Modi in the US capital. The World Bank had earlier rejected Pakistani government's proposal for financing the project following India's reservations against it.