In Kashmir, Pakistan and India race to tap the Himalayas with hydroelectric projects

This photograph taken on October 31, 2017, shows a general view of the Neelum-Jhelum Hydropower Project in Nosari, in Pakistan-administered Kashmir’s Neelum Valley. (AFP)
Updated 17 December 2017
Follow

In Kashmir, Pakistan and India race to tap the Himalayas with hydroelectric projects

MUZAFFARABAD: Several hundred meters underground, thousands of laborers grind away day and night on a mammoth hydroelectric project in contested Kashmir, where India and Pakistan are racing to tap the subcontinent’s diminishing freshwater supplies.
The arch rivals have been building duelling power plants along the banks of the turquoise Neelum River for years.
The two projects, located on opposite sides of the Line of Control — the de facto border in Kashmir — are now close to completion, fueling tensions between the neighbors with Pakistan particularly worried their downstream project will be deprived of much-needed water by India.
The Himalayan region of Kashmir is at the heart of a 70-year conflict between the nuclear-armed foes, with both sides laying claim to the conflict-riven territory.
The rivalry on the Neelum is underlined by both countries’ unquenchable need for freshwater, as their surging populations and developing economies continue to stress already diminished waters tables.
This situation represents a serious challenge to Pakistan’s food security and long-term growth, its central bank recently warned in a report.
The geography of the wider region only exacerbates the problem.
The Indus River — into which the waters of the Neelum ultimately flow — is one of the longest on the continent, cutting through ultra-sensitive borders in the region.
It rises in Tibet, crosses Kashmir and waters 65 percent of Pakistan’s territory, including the vast, fertile plains of Punjab province — the country’s bread basket — before flowing into the Indian Ocean.
The Indus Water Treaty, painfully ratified in 1960 under the auspices of the World Bank, theoretically regulates water allocation between the countries and is considered a rare diplomatic success story amid a bitter history.
It provides India with access to three eastern rivers (the Beas, Ravi and Sutlej) and Pakistan with three in the west (the Indus, Chenab and Jhelum), while setting the conditions for water usage.
As a tributary of the Jhelum River, the Neelum theoretically falls into Pakistan’s sphere, which launched the Neelum-Jhelum power plant project a quarter of a century ago to counter the legal, but competing Kishanganga project in Indian Kashmir.
At the confluence of the Neelum and Jhelum, the gigantic underground cathedral of concrete and steel is near completion — the four generators are in place, waiting for the transformers and the network to be connected.
More than 6,000 Pakistani and Chinese workers busy themselves in the 28 kilometers (17 miles) of underground tunnels or in the power station itself, buried under 400 meters of rock in the heart of the Himalayas.
After completion, the dam is expected to churn out 969 MW of electricity by mid-2018.
“It is a fantastic feeling to see the outcome of such a historic project,” enthused Arif Shah, an engineer working on the site for eight years.
“We hope to finish our hydroelectric plant before the Indians,” he smiles, while acknowledging that the real pressure comes from Islamabad, which has promised to end the debilitating power cuts nationwide ahead of the the 2018 elections.
On the Indian side, the Kishanganga power station is also in its final phase, but has delayed its late 2017 completion date, according to an official, in part because of ongoing unrest in the Kashmir valley.
Pakistan has filed cases at the World Bank against India and the Neelum dam, which it says will unfairly restrict the amount of water headed downstream.
According to the plant’s director Nayyar Aluddin, the production of electricity could shrink by 10-13 percent because of the Indian project.
But the hydroelectric projects on the Neelum River are only one of several points of friction between the two countries as the Indus Treaty faces increasingly pressing disputes.
Beyond the technical bickering, Islamabad is especially afraid of India cutting into its precious water supplies during strategic agricultural seasons that are key to feeding the country’s 207 million residents.
The possibility of hitting Pakistan’s food supply is regularly amped up by both Indian and Pakistani media, stretching perennially taut relations.
India’s Prime Minister Narendra Modi hinted at such reprisals following an attack in Indian Kashmir blamed on Pakistani insurgents in September 2016.
“Blood and water can’t flow together,” he said.
However, a blockade of any significant magnitude is not really technically feasible, while neither party has seriously sought to challenge the Treaty of the Indus.
“The disputes over the barrages are mostly symptoms of poor bilateral relationships,” said Gareth Price, a researcher at Chatham House.
The problem is that the rival countries conceive water as a zero-sum game — if one taps the resource, it means they are lost to the other.
But Islamabad must do its part, wrote Neil Buhne, UN coordinator in Pakistan, in an op-ed calling for the country to diversify “its water resources” while reigning in inefficiencies that wastes water.


Global brands shut Middle East stores as conflict causes chaos

Updated 03 March 2026
Follow

Global brands shut Middle East stores as conflict causes chaos

  • Luxury brands and retailers close stores in Middle East
  • Conflict threatens the region that has ‌been luxury’s fastest growing
  • Mass-market retailers monitor situation, adjust operations in region

PARIS: In Dubai and other major Middle Eastern shopping hubs, many stores are closed or operating with a skeleton staff as the escalating conflict in the ​region causes chaos for businesses and travel.

The US-Israeli air war against Iran expanded on Monday with no end in sight, with Tehran firing missiles and drones at Gulf states as it retaliates for a weekend of bombing that killed Iran’s supreme leader and reportedly killed scores of Iranian civilians, including a strike on a girls’ primary school.

Chalhoub Group, which runs 900 stores for brands from Versace and Jimmy Choo to Sephora across the region, said its stores in Bahrain were closed, while other markets, including the UAE, Saudi Arabia, and Jordan remained open though staff attendance was “voluntary.”

“We operate with a lean team formed of members who volunteered and feel comfortable to come to the store,” Chalhoub’s Vice President of Communications Lynn al ‌Khatib told Reuters, adding ‌that the company’s leadership team personally visited Dubai Mall and Mall of the Emirates ​on ‌Monday ⁠morning to check ​in ⁠with workers.

E-commerce giant Amazon closed its fulfillment center operations in Abu Dhabi, suspended deliveries across the region and instructed its employees in Saudi Arabia and Jordan to remain indoors, Business Insider reported on Monday, citing an internal memo.

Gucci-owner Kering said its stores were temporarily closed in the UAE, Kuwait, Bahrain and Qatar and it has suspended travel to the Middle East.

Luxury growth engine under threat

Shares in luxury groups LVMH, Hermes, and Cartier-owner Richemont were down 4 percent to 5.7 percent on Monday afternoon as investors digested the knock-on impacts of the conflict.

The Middle East still accounts for a small share of global spending on luxury — between 5 percent and 10 percent, according ⁠to RBC analyst Piral Dadhania. But the region was “luxury’s brightest performer” last year, according to consultancy ‌Bain, while sales of expensive handbags have stalled in the rest of the ‌world.

Now, shuttered airports have put an abrupt stop to tourism flows into ​the region and missile strikes — including one that damaged Dubai’s ‌five-star Fairmont Palm hotel — are likely to dissuade travelers, particularly if the conflict drags on.

“If you assume that it’s ‌a $5 billion to $6 billion (travel retail) market and let’s say it’s going to be shut down for a month, we are talking about hundreds of millions of dollars that are definitely at risk,” said Victor Dijon, senior partner at consultancy Kearney.

If Middle Eastern shoppers cannot travel to Paris or Milan, that could also hurt luxury sales in Europe, he added.

Luxury brands have been investing in lavish new stores and exclusive events ‌across the region. Cartier unveiled a “high-jewelry” exhibition in Dubai’s Keturah Park just days before the conflict started.

Cartier and Richemont did not reply to requests for comment.

Luxury conglomerate LVMH ⁠has also bet big on ⁠the region. Last month, its flagship brand Louis Vuitton staged an exhibition at the Jumeirah Marsa Al Arab hotel, and beauty retailer Sephora launched its first Saudi beauty brand.

LVMH does not report specific figures for the region, but in January Chief Financial Officer Cecile Cabanis said the Middle East has been “displaying significant growth.” LVMH did not reply to a request for comment on how its business may be impacted by the conflict.

The Middle East has also attracted new investment from mass-market players. Budget fashion retailer Primark said in January that it plans to open three stores in Dubai in March, April and May, followed by stores in Bahrain and Qatar by the end of the year.

“Primark is set to open its first store in Dubai at the end of March but clearly this is a fast-moving situation which we are monitoring closely,” a spokesperson for Primark-owner Associated British Foods said.

Apple stores in Dubai will remain closed until Thursday morning, the company’s website showed, while Swedish fast-fashion retailer ​H&M said its stores in Bahrain and Israel are ​closed.

Consumer goods group Reckitt has told all employees in the Middle East to work from home, temporarily closed its Bahrain manufacturing site and suspended all business travel to the region until further notice.