The National Highway Authority has done a feasibility study for the construction of Malakand tunnel to provide a short route for the people of Malakand, Upper Dir, Lower Dir and Swat. A Korean Company, M/s Chunil, prepared the feasibility study of the 2.9-kilometre-long tunnel. Malakand Pass lies between Dargai-Batkhela and is situated at an altitude of 470 metres and 663 metres, respectively. A tunnel is needed at this site as the existing road traverses steep gradients and dangerous winding curves with various recurring land slides. This makes movement of freight carriers difficult besides causing extra-consumption, breakdowns and accidents. It may be mentioned here that the then president of Pakistan, during his visit to Swat in 2005, had directed the Ministry of Communications to conduct feasibility for Malakand tunnel. The feasibility conducted by M/s Chunil Engineering Consultants of South Korea studied three alignments. The recommended alignment envisages Dargai as starting point of the tunnel and Batkhela as end point. It also envisages road tunnels of 3.172km, two-lane 8.663km road and three bridges of 152.5 metres on each carriageway.
PC-1 for Phase-I, including design, construction and supervision of Rs 9.043 billion was approved by ECNEC in May 2011. In November 2011, a meeting between representatives of Exim Bank of South Korea, Economic Affairs Division, Ministry of Communications and NHA was held in which financing of the project was agreed upon and Exim Bank showed its readiness to provide $ 78 million loan for the purpose. The 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.
The National Highway Authority has opined that at the time when Lowari tunnel is being constructed, it would not be much useful to start work on Malakand tunnel. However, the public representatives of the areas think otherwise. Talking to APP, Awami National Party Senator Zahid Khan said that Malakand tunnel was not less important than the Lowari tunnel. If Lowari tunnel provides all-weather road access to the people of only district Chitral, Malakand tunnel will prove an alternate short route to the people of four districts.
Pakistan Muslim League-Nawaz Senator Nisar Muhammad was of the view that linking Malakand tunnel to the completion of Lowari tunnel was unfortunate. He said that if a donor was ready to invest in this project, the NHA should start work on this project, otherwise the loan offer may be withdrawn as Korea may not be ready to shift the amount towards Lowari tunnel.
In January, Korean government had pledged $78 million through Economic Development Cooperation Fund (EDCF) for the construction of a 9.7 km Malakand Tunnel project. The loan provided by Korea was to be administrated by Exim Bank of Korea having nominal interest rate of 0.1 percent per annum with maturity period of 40 years including a grace period of 10 years.