[Sisibibi] 'One Team Korea' Should See the Forest, Not the Trees

Government-Backed Construction Orders
Require a Long-Term Vision and Big Picture Approach

Good news related to overseas construction orders is being reported one after another. Among them is the reopening of the joint committee, a high-level channel between South Korea and Iraq, after six years, which has paved the way for the resumption of the Iraq Bismayah New City project.

The Bismayah New City project is a large-scale construction project to build social infrastructure such as 100,800 housing units capable of accommodating about 600,000 residents, roads, water supply and sewage systems, educational facilities, hospitals, and police stations, with a total project cost reaching 14 trillion won. Hanwha Construction Division won the housing construction and SOC construction contracts in 2012 and 2015 respectively and proceeded with the work, but the project was halted due to unpaid construction fees. It is known that the unpaid construction fees amount to about 890 billion won. Hanwha and Iraq are currently negotiating the resumption of the project, and with the reactivation of the committee, there is also a prospect that the dispute over construction fees will soon be resolved. Additionally, Iraq's announcement that "a residential complex and new city project larger than Bismayah will also be ordered" and its request for Korean companies to participate in over 800 new investment projects is also encouraging.

Also, Hyundai Construction is about to finalize the contract for the 'Amiral Project,' a core project of the Saudi Arabian petrochemical complex estimated at 5 billion dollars (about 6.4 trillion won). If successful in winning the order, it will be the largest single order amount ever for a Korean company in Saudi Arabia.

The Ukraine reconstruction project, also called the 'Second Marshall Plan,' with a project scale reaching up to 1,200 trillion won, is also attracting the attention of domestic construction companies. Of course, there are many variables and risks such as uncertain profitability in post-war reconstruction projects, but it can be seen as a positive signal for the domestic overseas order strategy.

Furthermore, the construction industry is seeking opportunities for full-scale business expansion following President Yoon Seok-yeol’s visit to Vietnam on the 22nd. Daewoo Construction is currently carrying out the Starlake New City complex development project in Hanoi. The Starlake project is a mega urban development project to develop a 1,863,000㎡ site, about two-thirds the size of Yeouido, into a ‘Korean-style new city.’ Daewoo Construction plans to sign memorandums of understanding (MOUs) with local companies one after another to expand the project.

The common factor among these is that they are the results supported by government backing. These are achievements made through the 'One Team Korea' order activities where domestic construction companies and our government joined hands. This has become a vitalizing force like rain in a drought for construction companies that had been deeply troubled by the domestic market slump. Moreover, since overseas construction orders in the first half of this year were about 8.8 billion dollars, raising concerns that the government’s annual target of 35 billion dollars might not be met, this news is all the more welcome.

However, what is hoped for is to avoid short-term performance-oriented approaches. Especially from the government’s perspective with a five-year term, there have been many cases where even good policies were hastily implemented in pursuit of results within the term. Didn’t most of the resource diplomacy contracts signed within the first two years of the MB administration show poor results or end in failure after large-scale losses and sales? This is a representative case where trying to produce long-term policy results in a short period inevitably led to problems.

Also, the government should focus strictly on supporting companies. If it prematurely exaggerates or tries to claim credit as a government achievement before results come out, the efforts of domestic companies, which must fiercely compete with overseas firms to maximize profits, could be wasted. Hopefully, with a long-term vision and a big picture, our government and companies will form a true 'One Team' and create a second overseas construction boom.

This content was produced with the assistance of AI translation services.