Pakistan, Korea inks deal for Malakand Tunnel project

General Islamabad

Islamabad: Pakistan and South Korea Wednesday inked two agreements for the Malakand Tunnel Construction Project and for development of water resources infrastructure including dams, says a press release received from Seoul.

The agreement on Malakand Tunnel Construction Project was signed during meeting of President Asif Ali Zardari with Kim Yong Hwan, Chairman Export Import Bank of Korea, who called on him at the local hotel in Seoul.

Under the Malakand Tunnel Loan Agreement, an amount of US $78 million will be provided for the project. The Korea Eximbank is an official export credit agency providing comprehensive export credit and guarantee programs to support Korean enterprises in conducting overseas business.

Malakand tunnel will provide a short route not only to people of Dir, Malakand and Swat and adjacent localities but would also be an easy access to central Asian states, providing the market access to the country for its products. Malakand Pass lies between Dargai-Batkhela and is situated at an altitude of 470 metres and 663 metres, respectively.

The South Korean government pledged the $78 million funding through the Economic Development Cooperation Fund EDCF for the construction of Malakand Tunnel project in Khyber Pakhtunkhwa province. The 9.7 km project also includes approach roads on both sides of the tunnel and three bridges. The initial feasibility study of the tunnel has already been completed by South Korean consultants in collaboration with National Highway Authority Pakistan, which is also the Project executing agency.

The President said that it was high time for Pakistan and Korea to take its bilateral trade to new heights while exploring the true potential of trade and investment existing between the two countries, urging the business community of the two countries to boost its trade volume from current over $1.5 billion to $ 2 billion in the next three years.

He said that number of major Korean companies are doing business in Pakistan and have invested in major projects in Pakistan including chemical plants, energy and infrastructure projects and building port facilities, adding that now when the government has opened all sectors of economy open for investment, the Korean companies should avail the enormous opportunities and incentives, the government offers for investment in Pakistan. He reiterated that government would provide fool proof security and one window operation to the Korean entrepreneur for investment in the Special Economic Zones.

Later, President Asif Ali Zardari had meeting with Chief Executive Officer of the Korea water Resources Corporation (K-Water) Kim Keun-Ho. After the meeting, Memorandum of Understanding was signed between the Korea Water Resource Corporation K-Water and Water and Power Development Authority of Pakistan WAPDA. Under the MoU both the sides will work for sustainable water and power sector development and cooperate in development of water resources infrastructure, including dams, hydropower, flood control and canals.

Both the sides will also exchange technical expertise, have training of engineers, technicians and conduct study on operation and management of dams, hydropower, hydrology and sedimentation.

During meeting with delegation of K-Water, the President while highlighting investment potential in Pakistan energy sector said that Pakistan was blessed with one of the largest coal reserves of over 185 billion tons, which alone can produce over 100,000 MW of power for 100 years besides huge potential in the hydel, wind and solar power. He called upon Korean Companies to invest in energy sector and help Pakistan meet the growing energy requirements.

The two countries earlier also inked a Memorandum of Understanding between the Board of Investment of Pakistan and the Lotte Group of Korea, under which the Korean group will expand its business in Pakistan and invest in infrastructure and power generation projects in Pakistan and will conduct preliminary feasibility studies in projects as Mahl Hydro Power and Azad Pattan Hydro Power Project, besides expansion of their existing business in Pakistan.

The Korean companies during meeting with the President appreciated the government of Pakistan initiatives for attracting investment and said that many Korean companies are interested to invest in diverse areas.

Those who were present during the meetings included among others Makhdoom Muhammad Amin Fahim, Commerce Minister, Ch. Ahmad Mukhtar, Minister for Water and Power, Nawabzada Malik Amad Khan, Minister of State for Foreign Affairs, Mr. Muhammad Arif Azam, Secretary Railways, S. Anjum Bashir, Secretary BOI, Mr. Raghib Abbas Shah, Chairman WAPDA, Mr. Shaukat Ali Mukaddam, Pakistan’s ambassador in Korea and other senior officials.