K-water Gets Big Deal in Pakistan

Company's consortium wins piped water facility construction project worth $800 mln for the first time in Pakistan

President Kim Kuen-ho of Korea Water Resources Corp. signed an MOU to undertake the potable water facility construction projects worth $800 million in Islamabad, Pakistan on Dec. 12. Tahir Shamshad, deputy Director of the Potable Water Development Office of Pakistan, signed as his counterpart in the presence of a number of high-ranking Pakistani government officials led by Minister of Investment Waqar Ahmad Kan and Chairman Saleem Mandviwalla of the Investment Committee as well as Korean officials led by Korean Amb. to Pakistan Shin Eon.
The project involves the construction of a piped water treatment facility capable of supplying 90 tons of fresh water to Islamabad and Rawalpindi's 3.5 million residents. The facility will draw water from the Indus River 56 km away, process it into potable water and supply it to the residents of the two cities.
K-water will study the project for half a year and draw up the details of the project including the financing plan and submit it for the approval of the Pakistani government. The project is the first overseas investment project for K-water, which is to invest $300 million in return for the rights to operate the water treatment facility for 25 years. IBRD will provide the balance of the investment fund totaling $500 million, K-water officials said.
Private construction companies from Korea will take charge of building water refining and other supplementary facilities worth $700 billion, making the entire project a model PPP (private-public participation) project, which will make a big contribution to Korea's national wealth accumulation, the company said.
President Kim said he is so glad that K-water has been able to enter the overseas water facility construction market together with private companies to make a huge contribution to the creation of wealth for the country. He pledged that K-water will redouble its effort to be a top professional water firm in the world with the Pakistani project as the starting point.
K-water has been trying to break into the world hydroelectric and multipurpose dam construction market and, as a result, the company will break ground on the construction of the Patrind hydroelectric dam, which will be capable of generating 150W of power, beginning in the middle of this year at a cost of $330 million.
In the coming years, K-water will do its best to enter the hydroelectric dam and potable water facility construction markets in a number of countries including the Philippines, Nepal, Laos and others, and also try to win projects for sea water treatment, recycling water and sewage treatment in the Middle East. The potable water project is tentatively worth $800 million as outlined in the MOU, but the real value will be known following the survey to be conducted by K-water before the project gets the approval of the Pakistani government. The project calls for the construction of a facility at the Tabela Dam on the Indus River to divert water from the river to the water treatment facility through three pump stations along the 56 km-long pipeline. Other support facilities include a water reservoir.
The project is to be a BOOT (build-own-operate-transfer) type under the capital development authority (CDA). The financing is to be made with 30 percent of its own capital and 70 percent borrowed funds.
The Korean consortium will provide and recommend the financing plan and a proper charge for water use to be roughly based on $1.90 for 1,000 gallons of piped water. It will also secure an agreement for guaranteeing purchase, various licenses and central government guarantees before the project is launched. nw

K-water President Kim Kuen-ho shakes hands with his Pakistani counterpart after signing the MOU in Islamabad, Pakistan, Dec.12.

President Kim Kuen-ho makes his New Year speech at K-water New Year ceremony Jan. 2.