Korea's future is bright and green ― environmentally and financially

Industry

Published: 30 Aug. 2022, 19:21 Updated: 30 Aug. 2022, 19:26

Korea's future is bright and green ― environmentally and financially

Won Hee-ryong, minister of land, infrastructure and transport, talks at the Global Infrastructure Cooperation Conference on Tuesday. [YONHAP]

Won Hee-ryong, minister of land, infrastructure and transport, sees a bright future where Korean companies can enjoy a construction boom abroad, with the government offering support to make the dream happen.

His goal is for Korea to receive annual overseas construction orders worth $50 billion by the end of President Yoon Suk-yeol’s term, which would end in May 2027.

At the Global Infrastructure Cooperation Conference (GICC) held in Jung District, central Seoul, on Tuesday, Won stressed that one of the biggest deals up for grabs is the NEOM City project. The deal is Saudi Arabia’s $500 billion project that aims to build a city that only runs on renewable energy, with various Korean companies such as Hyundai Engineering & Construction, Samsung C&T and HanmiGlobal already winning deals.

“We are looking for innovative companies and companies that are willing to make a change, since we are building a city from scratch,” said Manar Al Moneef, CIO of NEOM. “We look for support in encouraging Korean companies to come and look at NEOM and be a partner in the development and be a major contributor to the vision that we have in building infrastructure.”

Construction deals as Indonesia moves its capital from Jakarta to a new city named Nusantara is another big project Korean companies aim to bag.

Various financial support will be given to achieve Korea’s goal, with the Export-Import Bank of Korea lending up to $11 billion won to companies that win deals from Middle Eastern companies, guaranteeing Korean companies will be backed with enough funding.

“To receive construction orders of over $50 billion in one year, it is important to help our companies by matching them with countries that have demand for the specific strengths they have,” Won said. “The government, public institutions and private companies will all work as one team, providing the utmost support by using our diplomatic ties, helping with financing and easing regulations.”

Won sat down for an interview with the Korea JoongAng Daily during the GICC session on Tuesday to discuss the government’s plans to support Korean construction companies.

The following are edited excerpts from the interview.

Q. Korean companies have been receiving less construction deals from abroad — why has Korea been struggling?

A. Korea’s overseas construction deals peaked in 2010, but have been falling due to economic struggles across the world and, recently, the Covid-19 pandemic. Korea only received construction orders around $30 billion last year. Also, in the past, Korean companies won a lot of deals but they weren't as profitable because they fiercely competed with each other to enter overseas markets.

We aim to overcome those struggles by working as one team and having a public-private partnership. That means that there will be financial support for companies that win construction deals and administrative support if necessary.

Companies from various other countries also actively participate in bids for large-scale overseas construction projects. What will make Korean companies stand out?

In the past, Korean construction companies showed strength in their price competitiveness, ability to always meet the deadline and skilled labor. But now, there is much more. As the country rapidly developed, we built a lot of new cities and industrial complexes, and thus are considered one of the leading countries in planning, designing and building such infrastructure.

In terms of finance, public institutions will help with financing the construction projects, which is another factor that makes Korean companies more competitive.

We have a lot of experience in building smart cities, which will allow us to have an upper hand in construction deals for Indonesia’s capital relocation and the NEOM City project. Companies like SM Entertainment attended today’s event. Korean culture is loved around the world and we are suggesting ways to integrate those companies’ culture and entertainment content into the smart cities, which will make Korean companies more attractive in their bids.

There are concerns whether the NEOM City project will actually be green as it says it will, with some facilities rumored to be run on fossil fuels or having to destroy nature to build a city in the desert. What are your thoughts about Korean companies participating in a project that might not actually be eco-friendly or sustainable?

Those are some of the questions we also had while talking to NEOM’s CIO. NEOM City says it runs only on renewable energy, but what are the specific details? Are fossil fuels indirectly used, or does it requires alternative energy sources such as nuclear energy? Won’t building a city in the middle of the dessert destroy nature?

But it's all still only in the concept and planning stages right now, and they are asking us to provide them with better ideas and technologies if we have them. We have exchanged ideas about the issue, though nothing has been decided yet.

Rather than asking if Saudi Arabia can achieve the city’s green initiatives, it is more accurate to say the country is willing to invest a huge amount of money into a sustainable future and is encouraging other countries to participate in the project with them.

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]