The project seeks to build a storage dam on the Mahakali river at the boundary of Uttarakhand and Nepal. Nearly 80 per cent of the catchment area for the project would be in India and the rest in Nepal.
"The Pancheshwar Development Authority will be set up jointly with the Government of Nepal for construction, operation and maintenance of the Pancheshwar project within a year," Water Resources Minister Saifuddin Soz said.
According to Soz, the authority will help decide the "operational details" for construction of the project.
The treaty on development of the Mahakali river, called Sarda in India, was signed between the two countries in February 1996, but came into force in June 1997.
The Pancheshwar project would also facilitate regulated release of water contributing to development of irrigation potential and control flood downstream.
There is also a proposal to construct a regulatory dam. While India wants to construct the regulatory dam at Purnagiri in Uttarakhand, Nepal is interested in building it at Rupaligarh so that relief and rehabilitation problems in that country is minimised
Source:http://timesofindia.indiatimes.com/World/India-Nepal-set-to-construct-dam-/articleshow/4207898.cms