Neelum-Jhelum Dam

The Neelum Valley in Kashmir made history on October 2005 when a deadly 7.6 earthquake hit the highly contested Pakistan-Indian border region. Now both India and Pakistan want to build a dam on the Neelum River, which runs through both countries. Authorities believe the river can provide badly needed energy and irrigation to one side of the border or the other, but not both.

Pakistan's proposed project, the 969-MW Neelum-Jhelum Dam, is by far the larger of the two proposed dams and is already underway, with help from Chinese dam builders and financiers. In December 19, 2007, China's Gezhouba Group and China National Machinery Import-Export Company signed a contract with and the Water and Power Development Authority of Pakistan to construct the US$1.5 billion project. Pakistan is expected to seek support from the ADB and the International Finance Company, and reinsurance from China. And in October 2008, Pakistani and Chinese authorities formed a joint venture corporation that plans to seek investment for a number of other large hydropower, nuclear, and coal projects in Pakistan. Further, the project will employ 1,100 Chinese workers and engineers. The 100-meter dam is projected to be completed by 2014.

The Neelum-Jhelum Dam is a high risk project. The Jhelum River joins the Neelum River near the dam site and runs along the major Tanda and Murree fault lines. Building a dam here could trigger seismic activity or pose great risk to downstream communities should the dam fail. (The tragic May 2008 earthquake in Sichuan, China demonstrates the extent to which dams are vulnerable to earthquakes) In addition, the hydropower activities of both countries may throw a shadow over efforts at a resolution to the violent political disputes in the region.