[1] It was the first hydropower project built by India in Jammu and Kashmir under the Indus Water Treaty regime.

[2] After having reached a bilateral agreement with Pakistan in 1978,[3] with significant concessions made to Pakistan in the design of the dam, reducing its height, eliminating operating pool, and plugging the under-sluices meant for sediment management, India completed the project in 1987.

The concessions made in the interest of bilateralism damaged the long-term sustainability of the dam, which silted up in five years.

[8] Construction was started in 1970 by the Central Hydroelectric Project Control Board (under the Government of India's Ministry of Irrigation and Power).

The design of the project contained a two-stage powerhouse generating 690 MW power making use of the head created by the dam.

India is obliged under the treaty to inform Pakistan of its intent to build a project six months prior to construction and take into account any concerns raised by the latter.

Any intention on India's part to flood Pakistan would involve causing much more damage to its own territory.

[11] In the face of Pakistan's unwillingness to relent, the Indian negotiators wanted to take it to arbitration by a neutral expert, as provided for in the treaty.

In further bilateral talks in October 1976, India made significant concessions in the dam's height and other issues.

[17][18] The agreement was hailed as a triumph of bilateralism, facilitating an atmosphere of trust and confidence between the two countries.

[11][19] But the agreement also seriously damaged the sustainability of the dam and the Indian engineers viewed it as too high a price to pay for bilateralism.

[20] After signing the agreement in 1978, the construction of the project was entrusted to National Hydroelectric Power Corporation (NHPC) on an agency basis.

[31] To alleviate the problem, the spillway gates are being opened at least once a month during the monsoon season as a desilting mechanism, with a discharge of about 4,250 cumecs.

[33] Studies report erosion in the civil structures such as the concrete sill of the spillway, the glacis and the bucket;[34] damage to the turbine components such as cracks in the turbine blades, knife edging of the outer edges and washing out of other components;[35] damage to the cooling system such as tubes being choked with stator faults encountered.