Team Korea rises againGood news came from overseas infrastructure market as 2017 began. In Turkey, a Korean company is likely to be selected as the priority negotiation partner for the 3 trillion-won ($2.65 billion) Canakkale bridge project, beating a Japanese rival. In Egypt, a Korean company won a bid to provide cars for the Cairo metro line 3, a 490-billion won project, where France had been a strong bidder. Moreover, they are expected to continue with follow-up projects such as providing high-speed train cars for Turkey and the Cairo metro line 5 in Egypt.
With domestic SOC budget cut and uncertainty in the construction market, Korean construction companies need to aggressively seek expansion into the global market. The slump in the domestic market also call for expansion into overseas infrastructure markets.
However, changes in the global market environment make overseas expansion of Korean builders more challenging than ever. The Middle East had been Korean companies’ traditional stronghold, but their orders have drastically decreased due to the global economic slump and low oil prices. And they are not likely to recover soon.
In order to respond to the challenging conditions, the Korean government plans to organize Team Korea based on national cooperation. Combining the internationally proven technological level and construction caliber of Korean companies with outstanding infrastructure operation and maintenance of public corporations, diplomacy of the government and financial competitiveness of state-run financial institutions will increase the chance of winning.
The government plans to facilitate cooperation between public and private sectors by establishing an apparatus to systematically assist overall overseas investment and development projects. Also, assistance for global infrastructure venture fund and export financing will be expanded, and available diplomatic resources such as former ambassadors and international organization workers would be mobilized. To make Korea become a world-class construction power in a long term, a global standard bidding system will be implemented in the domestic market, and R&D support will also need to be strengthened.
It is clearly not an easy path. But Korea has the experience of attaining economic development and successfully developing infrastructure that other developing countries want to learn. Korean construction companies are trusted worldwide as they have faithfully and successfully completed projects around the world. When Team Korea is formed based on these valuable assets and expands to the overseas construction market, the Korean construction industry will surely be a reliable prop for the national economy in the future.