Seoul readies Team Korea to win Saudi megacity and nuclear reactor projects

[Photo by Lee Seung-hwan]

The government is readying Team Korea to vie for multibillion-dollar desert megacity and reactor projects of Saudi Arabi, hoping for a push through a visit from the Saudi Crown Prince behind the ambitious urban and green development campaigns.

According to multiple sources from the construction and plant industries on Wednesday, the Saudi Arabian government is expected to place procurements for constructions related to the Line (Mirror City) project at the end of this year or early next year. Mirror City is part of the Neom megacity project built in Tabuk, northwest part of Saudi Arabia. The city is envisioned to house an array of 170-kilometers high skyscrapers to accommodate 9 million people.

Korea’s Land, Infrastructure and Transport Minister Won Hee-ryong on Wednesday rounded up chief executives of major builders including Hyundai Engineering & Construction, Samsung C&T, GS Engineering & Construction, Doosan Enerbility, Hyundai Engineering, and Samsung Engineering at the Korea Chamber of Commerce and Industry headquarters in central Seoul to plan out winning strategies to secure as many procurements as possible. Export-Import Bank of Korea President Yoon Hee-sung, Korea Overseas Infrastructure & Urban Development President Lee Kang-hoon, and International Contractors Association of Korea Chairman Park Sun-ho also attended.

The assembly discussed global civil engineering and plant projects under making as well as Saudi Arabia’s Neom City project. Corporate executives called for relaxation in the 52-hour work week at construction sites and severe accident punishment act. Won promised regulatory easing to back their competitiveness.

The Land, Infrastructure, Transport Ministry in a separate statement pledged support for Team Korea in their overseas ventures through enhanced intergovernmental cooperation and offering of information and finances for private sector.

“We will send a high-level team to conflict zones like Iraq and Libya to raise chances for Korean companies in infrastructure procurements,” said Kwon Hyuk-jin, director general for urban policy at the ministry.

The government will establish an integrated information system by this year to provide up-to-date information on overseas procurements by compiling intelligence gathered by the International Contractors Association of Korea, KIND, and Korea Trade-Investment Promotion Agency.

Eximbank plans to sign a $6 billion framework agreement with Saudi Arabian Oil Company (Aramco) this year to back financial guarantees for Korean companies bidding for Saudi infrastructure projects.

Seoul has been working to invite Saudi Crown Prince Mohammed bin Salman spearheading the Neom City project to Korea in late October or November.

Apart from the megacity project, Seoul is pushing hard for Korean win at the bid for Saudi nuclear reactors which are also part of the Crown Prince’s Vision 2030 objectives to diversify the oil-reliant kingdom economy and energy sourcing for sustainability.

Saudi Arabia has sent out letters to Korea, China, France, and Russia in May for two nuclear reactors.

Korea and Russia are said to be most favored due to higher cost of France and China’s lack of experience in commercial nuclear reactors.

Korea’s reactor capability has already been proven after establishing and operating the region’s first reactors at the Barakah Nuclear Energy Plant in United Arab Emirates.

Saudi Arabia, however, has close ties with Russia as members to the Opec+, an alliance of the Organization of the Petroleum Exporting Countries and Russia.

Saudi Arabia on grounds of Iran’s nuclear program has been rejecting an inspection from the International Atomic Energy Agency (IAEA) which can hamper with Korean nuclear reactor exports to Saudi Arabia.

Section 123 of the U.S. Atomic Energy Act calls for countries that were provided with U.S. nuclear reactor technology to receive prior consent from the U.S. government and Congress before enriching uranium.

Korea’s home-developed reactor model APR1400 has been based on the original technology of U.S. Westinghouse. If Korea exports the same model to Saudi Arabia, it needs U.S. approval.

Korea’s chances can rise through alliance with U.S. in bidding for Saudi reactors as the summits of Korea and U.S. have agreed on cooperation in nuclear reactor exports.

“The U.S. has big influence in the international society and [bilateral partnership] will not only benefit Korea in advancing into Saudi Arabia but winning other orders,” said Chung Bum-jin, professor of nuclear engineering at Kyung Hee University.

[ㄏ Maeil Business Newspaper & mk.co.kr, All rights reserved]