Chairman Kim Seung-yeon's Bismaya New City... Hanwha Construction Division to Resume Construction

Panoramic view of Bismayah New City in Iraq / Photo courtesy of Hanwha Construction Division

[Korea Financial Times, Jang Hosung] Hanwha Construction Division is pushing for the resumption of construction of Bismayah New City in Iraq. Hanwha Construction Division announced on the 6th that it signed a revised contract with the NIC (Iraq National Investment Commission), the orderer of Bismayah New City construction, on the 5th to resume construction.

The revised contract amount is a total of 10.398 billion USD (approximately 14.7125 trillion KRW, applying the exchange rate of 1,414.9 KRW/USD), which is an increase of 277 million USD (approximately 391.9 billion KRW) compared to the original contract amount of 10.121 billion USD. The construction period is from May 30, 2012 to December 31, 2032. The contract will be effective upon approval by the Iraqi government's Council of Ministers, and the contract terms may be changed or canceled during the approval process.

Hanwha Engineering & Construction terminated the contract for the construction of Bismaya New City in October 2022 due to non-receipt of construction costs. However, in January 2023, in response to NIC’s request to resume the project, it signed an MOA (Memorandum of Understanding) and had been negotiating a revised contract for the construction of the remaining 70,000 housing units. In addition, it received $300 million, part of the non-receipt balance, from January to December 2023 and resumed partial construction.

Hanwha Construction Division is doing its best to ensure that the contract is approved by the Iraqi government’s Cabinet. It is expected that the resumption of the largest K-new city export project, which is expected to have 600,000 residents on a site six times the size of Yeouido (18.3㎢, approximately 5.5 million pyeong), will revitalize the stagnant construction market and contribute to the national economy.

The Bismaya New City project is also known to be a project that Hanwha Chairman Kim Seung-yeon has paid great attention to at the group level, including visiting Iraq. In particular, Chairman Kim Seung-yeon showed his enthusiasm for the site by personally procuring and delivering the halibut sashimi that local employees wanted to eat during his visit to Iraq in 2014.

Jang Hosung (hs6776@fntimes.com)