New Delhi, Dec 7 (IANS): The Union Cabinet on Thursday approved implementation of Shahpurkandi Dam project on Ravi in Punjab that will help use some of river water which is going a waste through the Madhopur Headworks downstream to Pakistan.

An official release said that the government will provide a central assistance of Rs 485.38 crore for irrigation component of the project over five years from 2018-19.

It said that the project will create irrigation potential of 5,000 hectare in Punjab and 32,173 hectare in Jammu and Kashmir. The project would be implemented by the Punjab government with the central assistance and it would be completed by June 2022. On completion, Punjab would also be able to generate 206MW of hydropower.

Indus Waters Treaty was signed between India and Pakistan in 1960 for sharing of Indus waters. According to the Treaty, India got the full rights for utilisation of waters of the three eastern rivers -- Ravi, Beas and Satluj.

The release said that the project was initially approved by the Planning Commission in 2001 and included under the Accelerated Irrigation Benefits Scheme (AIBP) for funding its irrigation component.

However, work could not progress much due to non-availability of funds on the part of Punjab for power component and later inter-state issues with Jammu and Kashmir.

The release said that a series of meetings were held bilaterally as well as at the central level and an agreement was finally reached between the two states under the aegis of the Water Resource Ministry.