Korean and Saudi businessmen and politician gather for the signing ceremony in Seoul (Hanwha)

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Korean firms share $20bn Saudi housing deal

4 April 2016 | By GCR Staff | 0 Comments

A consortium that includes Korean contractors Hanwha Engineering & Construction and Daewoo Engineering & Construction has won a $20bn project to build 100,000 homes in Saudi Arabia’s Dahiyat Al Fursan new city.

The third member of the team will be Riyadh-based contractor Saudi Pan Kingdom (SAPAC).

We will supply 100,000 houses and city infrastructure in Alfursan near the Riyadh International Airport and this will be a landmark deal for Korea’s overseas construction history in terms of the size– Hanwha spokesman

A memorandum of understanding was signed in Seoul on 24 March between Saudi housing minister Majed bin Abdullah Al-Hogail and representatives of the three builders, as well Kang Ho-in, South Korea’s minister of land, transport and infrastructure, BusinessKorea reports.

A spokesman for Hanwha said: “We will supply 100,000 houses and city infrastructure in Alfursan near the Riyadh International Airport and this will be a landmark deal for Korea’s overseas construction history in terms of the size.”

The agreement includes an exchange of expertise through workshops and conferences.

The new city is one of the pledges made by King Salman bin Abdulaziz’s when he assumed the throne of Saudi Arabia last year, and will be directly funded by the government.

The Korean companies are hoping that this success will lead to further orders in the Kingdom. In January this year, the government announced a plan to invest up to $400bn in 1.5 million houses over the next seven years, to tackle the present shortage of accommodation and to cope with future population growth.

The Saudi Ministry estimated last year that the lack of housing infrastructure would require 3 million new homes by 2025.

Choi Kwang-ho, the chief executive of Hanwha, said at the signing ceremony: “The deal will be helpful to cement our reputation as a global city developer in the Middle East, following the Bismayah new city project in Iraq.”

The builder won the $8bn Bismayah scheme from the government of Iraq in 2014.

Daewoo E&C was chosen to build Algeria’s new capital of Boughezoul in 2008.

Photograph: Korean and Saudi businessmen and politician gather for the signing ceremony in Seoul (Hanwha)