ANKARA, Turkey — The latest four-year economic assistance protocol between Turkey and the Turkish Cypriots expired on Dec. 31, 2015. The agreement was supposed to be renewed for the 2016-18 period, but the two sides failed to agree on its terms. As a result, the Turkish Republic of Northern Cyprus (TRNC), which is recognized only by Ankara and relies on its assistance to survive financially, failed to pay the traditional 13th salaries and pensions of its public employees and retirees at the year-end as well as supply certain funds for farmers.

Turkey's Justice and Development Party (AKP) government has conditioned the renewal of the aid protocol on an agreement regarding the distribution, sale and billing of the water that Turkey recently began pumping to the drought-stricken TRNC. What was promoted as “the project of the century” became operational in October. It involves an 80-kilometer (50-mile) undersea pipeline built at a depth of 250 meters (820 feet) in the Mediterranean Sea to carry 75 million cubic meters of water annually from the Dragos Creek in Turkey’s southern Mersin province to the Gecitkoy Dam on the northern Turkish Cypriot coast.

The pipeline — completed in four years at a cost of 1.6 billion Turkish lira ($533 million) — was one of the AKP’s showcase achievements ahead of the Nov. 1 general elections last year. When the water began to flow on Oct. 17, 2015, inauguration ceremonies were held on both coasts with the participation of top officials, including Turkish President Recep Tayyip Erdogan and Prime Minister Ahmet Davutoglu and their TRNC counterparts, President Mustafa Akinci and Omer Soyer Kalyoncu.

The events were marked by exalted speeches, with the two sides hailing the pipeline as an inseparable bond between them. Akinci voiced hope that the project would help peace efforts on long-divided Cyprus and strengthen the Turkish Cypriots’ hand in settlement talks with the Greek Cypriots. Erdogan, for his part, said, “If the southerners [Greek Cypriots] also wish to make use of the water, we could then call it 'the water of peace' and supply it to them as well.”