An important element which was included in the 1977 agreement, and a point that has come up again and again in the Indo-Bangla water talks, was the need for "augmentation" of the Ganga´s flow. This meant, essentially, adding to the river´s volume by building dams and reservoirs on the Himalayan tributaries to trap excess monsoon flow for release during the dry winter months. The bilateral Indo-Bangla 1977 treaty specifically mentioned Nepal, a third party, by stating that the proposals for augmentation "do not exclude any schemes or schemes for building storage in the upper reaches of the Ganges in Nepal." That very year, in 1977, King Birendra of Nepal also put forth the concept of regional cooperation in development of the significant Nepali water resources. His proposal would supposedly mesh well with Bangladesh´s own proposal for upstream storage dams. In fact, Kathmandu was already in discussion with New Delhi on the feasibility of four "mega-storage" reservoir projects in Nepal. However, the government in Kathmandu remained an onlooker when it came to the many years of discussions on Farakka, even though its role would have been paramount under the Bangladeshi proposal. There was only one trilateral meeting between India, Bangladesh and Nepal, in 1986, and that failed to proceed beyond pleasantries.
While augmentation through storage in Nepal was thus a specific part of the previous agreement on the Ganga, the new 1996 treaty makes no such reference. All that the instrument does is encourage the two signatory governments to cooperate in finding solutions to the long-term problem of augmenting the flow of the Ganga in the dry season.
It was Bangladesh which had always insisted on the regionalisation of Ganga water talks. India, for its part, has consistently maintained that Ganga water-sharing is a bilateral problem into which a third party (i.e. Nepal) should not be dragged. It was only in September 1996 at the UN General Assembly that Dhaka formally indicated that it might be willing to acquiesce to this point and be agreeable to resolving the matter through bilateral discussion.
Even though there is increasing talk of regionalism in South Asia under the aegis of SAARC, by barring any third-party involvement on discussions relating to an international river, the Farakka agreement represents a deliberate step in the other direction. Bilateralism would, therefore, seem to henceforth guide cooperation in South Asian waters. That this is a definitive trend is also indicated by the conclusion of the Indo-Nepal Mahakali treaty of January 1996 on the construction of a storage-cum-power scheme on a border river between the two countries. This Pancheswar storage scheme was, after all, one of the seven dams in Nepal proposed by Dhaka for flood control and augmentation.