This report seeks to review the regional cooperation efforts in the water and energy sectors pursued by the Central Asian Republics during the 1990s in the Syr Darya river basin, identify the reasons for the problems encountered, and suggest an approach to make the cooperation more reliable, sustainable and equitably beneficial to all parties. concerned. It also outlines a methodology for valuing costs and benefits involved in different types of arrangements, so that decisions could be made on the basis of a sound cost benefit analysis. Further it identifies the policy options, structural options and institutional improvements to be pursued by these countries to reinforce the cooperation arrangements.