Edaily

By Kim Tae-gyu

Hanwha Engineering & Construction (E&C) has won a mega deal worth $7.25 billion to build a new town in Iraq near the capital.

Hanwha E&C said Thursday that its Vice Chairman Kim Hyun-chung signed the contract with Iraqi National Investment Commission Chairman Sami R. Al-Araji in Bagdad. The Gulf nation’s Prime Minister Nouri Kamil Al Maliki also took part in the signing ceremony.

The company plans to break ground at the 1,830-hectare site situated 25 kilometers east of Bagdad this year with the aim of wrapping up the project in about seven years or by 2017 at the earliest.

"Based on our experience in Korea, we will facilitate various infrastructure first at the new town where up to 100,000 houses will be built for Iraqi residents," a Hanwha E&C spokesman said.

"We have made efforts from last year to win the order, which marks Korea’s first case of exporting our expertise and knowledge on new towns on such a huge scale. This is an opportunity for us to show our capabilities to the Middle East and North African areas."

Hanwha, an unlisted unit of the conglomerate Hanwha Group, will forge ahead with the project from the very beginning to the very final touches encompassing the engineering, procurement and construction (EPC) format.

"We will start with the design of the whole installation to the actual construction so that people can simply move in to the houses at the new town. In other words, we will take care of everything from A to Z, which is possible for only a few versatile and competitive contractors," he said.

EPC is a format of contract in the construction business under which the constructor is supposed to design the entire project, procure the necessary materials and build it on its own or through subcontracts.

Asked about the financing aspects of the contract, Hanwha said that Iraq will pay the total price tag of $7.25 billion in stages.

"Iraq is scheduled to provide 10 percent as a down payment and 5 percent in intermediate payments at three subsequent times. Plus, the country will pay part of the remainder step by step after the completion of some facilities," the spokesman said.

Hanwha E&C has fared well both at home and abroad.

The company successfully carried out a large-sized development project in Incheon, west of Seoul. It also garnered a $1.2 billion deal involving industrial plants in Saudi Arabia.

Currently, a total of five international construction works are underway by Hanwha including oil refineries in Algeria and liquefied natural gas plants in Kuwait.

Hanwha E&C announced its long-term goal early this year of joining the ranks of the global top 100 constructors. Toward that end, the corporation is briskly tapping into new areas such as renewable energy on top of strengthening its existing businesses.

By maintaining top-tier competitiveness in its core businesses, the firm hopes to rack up more than 20-percent in growth per year in global turnover through 2015 by which time over 40 percent of its sales would be generated overseas.