Hanwha Group has secured new growth potential in the overseas market as its construction unit has won the order for a new town supply in Iraq.
The Iraqi government recently endorsed the business deal under which Hanwha Engineering & Construction will build 100,000 houses in Bismayah, which is scheduled to be a satellite city of Baghdad.
Its scale will mark the largest-ever in history in Korea’s overseas construction projects, the group said in a statement on Thursday.
A formal contract will be signed soon, with group chairman Kim Seung-youn to take part in the event, the group said.
“It will take about seven years to complete the construction,” Hanwha said. “The building cost will approach $8 billion.”
The figure of $8 billion exceeds 10 percent of Korea’s overseas construction order plan totaling $70 billion.
Market analysts estimated that the scale of the new town would be equivalent to that of Bundang, south of Seoul.
The group’s project is likely to be a role model for other local players amid the recent construction boom in the Middle East.
Like the 1970s, another construction boom was emerging in the region.
Last March, the government announced that it will support more than 1,200 young adults in finding work and volunteer opportunities in Muslim countries.
Earlier, President Lee Myung-bak instructed public officials to consider measures to create more employment and internship opportunities in the Middle East after his three-nation tour to the region.
Last year, Hanwha E&C signed a $1.05 billion deal to build a power station and desalination plant in Saudi Arabia.
The builder said it is to establish the plant at Yanbu industrial complex, the biggest of its kind in Saudi Arabia and located on the western side of the country, by 2014 under the deal with Marafiq, a Saudi Arabian power and water utility company.
Facilities to be built at the site include three 230 megawatt-steam turbine power generators, three 830-ton boilers and ones for desalination.
Hanwha executives attributed the deal to the builder having earned credibility for its expertise in engineering, procurement and construction projects from the ordering body.