South Korea sees $1.6bn upturn in Mideast deals

South Korean construction companies have seen an upturn in Middle East business since July, with contracts worth $9.6bn awarded.

The rebound follows months of cancelled projects in the region as a result of the global financial crisis, the Korea Plant Industries Association added.

A quick recovery in plant bids over the last couple of months is rekindling hopes that the region will re-emerge as a goldmine for overseas companies, the Association said in comments published by Korea Times.

Korean builders won orders in the region in July and August amounting to $9.6bn, up from $8bn in the same period last year, the report added.

In the first half of the year, Korea won plant orders from Arab nations totalling just $3.3bn, less than half the $7.3bn it had a year ago.

South Korean contractors form the basis of almost every list of bidders for major Middle East contracts with the likes of Samsung Engineering, Hyundai Engineering & Construction and Daewoo Engineering & Construction prominent in the region.

They have played a lead role in many of the region’s landmark projects, from Libya’s Great Manmade River to the Burj Dubai, the world’s tallest building.

The upturn report comes as research company Proleads announced that the UAE’s real estate and construction sectors have been the hardest hit in the region by the global downturn, with a total of 566 projects currently on hold or cancelled.

However, the country retained an “extraordinary level of construction” with a total of 1,372 projects under construction or bidding, the Dubai-based research house said.

South Korea-based Doosan Heavy Industries & Construction said on Thursday it had won a $1.1bn order to build a power plant in Saudi Arabia by 2013. Doosan and its Saudi Arabian partner BEMCO are set to sign a contract to build the 330-megawatt plant near the eastern city of Damman with Saudi Electricity next month.

With the growth in the Middle East, the Korean government expects the country to reach its annual target of $40 billion in orders overall.

The upturn seen by Korean firms comes as Arabtec Construction said it does not see Dubai's construction market returning to the heyday of the emirate's property boom.

The Dubai-based contractor, the UAE's largest by market value, has won contracts in Saudi Arabia and Abu Dhabi so far this year as it ventured further afield to weather a property downturn in its home market.

"They talk about (the Dubai market) turning around, maybe by the middle of next year, but I don't think it will ever achieve the scale and the heights that it was at before," Arabtec Construction CEO Thomas Barry told Reuters on the sidelines of the Global Irish Economic Forum.