Daewoo-Hanwha consortium sails for multi trillion won mega deal

Daewoo-Hanwha consortium sails for multi trillion won mega deal

A consortium that includes the nation’s leading construction giants, Daewoo and Hanwha Engineering & Construction (E&C), is making headway on a multi-trillion-won construction deal in Saudi Arabia. The other stakeholder is Saudi Pan Kingdom for Trading, Ind. & Contracting (SAPAC), a builder in Saudi Arabia.

According to a Daewoo E&C official, Friday, company President CEO Park Young-sik and Hanwha E&C CEO Choi Kwang-ho signed a memorandum of understanding (MOU) with Saudi Arabia’s housing minister, Majed Al-Hogail, at the J.W. Marriott Hotel in southern Seoul, Thursday.

It is the first time the minister has visited Korea to sign an MOU with Korean contractors.

Under the MOU, the three-party consortium is expected work on the city construction project in Dahiyat Alfursan, 14 kilometers east of Riyadh International Airport.

“The project is to supply 100,000 houses and to construct infrastructure that will accommodate a total of 600,000 people in the city,” an official said.

The city’s size is expected to be 38 square kilometers, nearly twice that of Bundang in Gyeonggi Province.

The total cost of the project is between 21 trillion ($18 billion) and 23 trillion won. This is the largest overseas construction deal for Korean builders.

The project is part of Saudi King Salman bin Abdulaziz’s efforts to ease the country’s worsening housing shortage.

Saudi Arabia’s capital, Riyadh, has had 1.5 percent population growth every year and its housing supply could only take care of 60 percent of its residents, as of last year.

In a bid to counter its housing problems, the Saudi government recently set up the Ministry of Housing and will invest a total of 464 trillion won to supply 1.5 million houses in the metropolitan area over the next seven years.

“Korean builders are expected to aggressively bid on more of Saudi Arabia’s housing projects,” said a Daewoo E&C official.

“Such a massive overseas deal bolsters the nation’s sagging construction industry.”

Separate from the Saudi project, the nation’s largest housing supplier, Daewoo E&C, is working on overseas construction projects including Trump World Tower in the U.S., the Star Lake City in the Vietnamese city of Hanoi and the new city project in Boughzoul, Algeria.

Hanwha E&C has participated in domestic construction projects including the Eco-Metro in Incheon and Daedeok Techno Valley. The company also won a total of 10.1 billion won in the new city construction deal in Bismayah, Iraq.

Source : http://www.koreatimes.co.kr/www/common/vpage-pt.asp?categorycode=123&newsidx=201198

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