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Samsung C&T bags USD2 billion contract in Riyadh
Christoph Kober 1 Aug 2013

The engineering, procurement and construction (EPC) unit of South Korea’s Samsung C&T has won a US$2 billion contract to oversee construction of three new subway lines in Saudi-Arabia’s capital Riyadh. Including two separately awarded legs, the public transportation development is estimated to cost US$22.5 billion. The deal underscores the strong presence of South Korean construction companies overseas, highlighted by a number of other high-profile contracts so far this year.

 
Samsung C&T will partner up with FCC from Spain, Strukton from the Netherlands, and Freyssinet from Saudi Arabia for the design, construction and commission aspects of the project; French specialist Alstom meanwhile will design and build the driverless subway cars and the operating system.  The project is expected to be completed in 2019.

 

"Samsung C&T looks forward to executing this landmark project to the highest standard, contributing to the development of Riyadh,” says Yeon-Joo Jung, CEO and vice-chairman of Samsung C&T, in a statement issued on Tuesday. “This project will require us to work with some of the best in the global construction industry and serve as an opportunity for us to demonstrate that Samsung C&T is one of them."

 

Measuring 176 kilometres in length, the project will be the longest subway system under development in the world. In June, Samsung C&T announced it had won the concession to build a metro station in Qatar’s capital city Doha for US$1.4 billion.

 
South Korean construction companies have successfully stepped up to win overseas orders in response to the ongoing slump in the domestic property market. According to the Export-Import Bank of Korea (KEXIM), the country’s EPCs won construction deals worth US$64.8 billion in 2012. Nearly 60% of overseas contracts were tendered in GCC countries.
 
On July 10, Hyundai Engineering & Construction bagged a US$679 million prestige contract in Turkey, where the consortium it leads will build the third bridge traversing the Bosphorus Strait in Istanbul, connecting the Asian and European continents. The 2.164 kilometre-long bridge is one of the largest projects ever conducted by the Turkish government and will be the world’s first hybrid suspension/cable-stayed bridge. 
 
“The project is challenging, given that we should complete the construction of the symbolic, large-scale bridge connecting the beginning of the European continent and the end of the Asian continent in less than three years,” Park Kyung-ho, head of civil and environment division of Hyundai E&C, said. “Based on our world-class technological capabilities for super long-span bridges and rich construction experience, Hyundai E&C will create a picturesque beauty by building the bridge with towers which have 1.4 times longer spans and are over 2 times higher compared to other bridges over the Bosphorus Strait.”
 
In a March interview with The Asset, Eie Soon Yoon, sales head for overseas projects in the power and energy division of Hyundai E&C documented the growing importance of markets abroad for the company: “Just a few years ago, the domestic Korean market contributed more than 60% to our revenue. But this has reversed. We now derive more than 70% of sales from overseas markets and we believe this will exceed 80% by next year.”
 
Also in July, South Korea’s Daewoo Engineering and Construction won a contract valued at US$708.6 million to upgrade a gas field in Iraq. 

 

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