Hanwha Engineering & Construction has announced that the Iraqi government has made a payment of US$560 million that will uncover unpaid fees since construction began in 2012.
Korean company, Hanwha Engineering & Construction was previously awarded a project worth $US10.1 billion in the city of Bismayah, approxiamtely 10 kilometres or 6.2 miles southeast of Baghdad. The project is by far the largest project taken on by the Koran company and will build 100,000 homes and various infrastructure projects. This project will be completed in 2019.
The drastic decline in oil prices as well as geopolitical issues plaguing Iraq made it extremely difficult for the Iraqi government to make payment to the Korean construction company. Funds for the recent payment to Hannah were made by the Iraqi government taking out loans against completed residential units in the new city.
“The payment essentially shows Iraq government’s determination to push through with the project,” a Hanwha spokesperson recently stated.
Last month the CEO of Hanwha E&C, Choi Kwang-ho met with Prime Minister Haid er Al-Abadi in an effort to provide further support with Korea’s Export-Import Bank and Korea Trade Insurance Corporation that aided the payment process last week. Mr. Hanwha said last week, “we have reconfirmed the Iraqi government’s trust in the Bismayah new city project through the payment made last week.”
Furthermore, a Hanwha spokesperson commented, “as the civil war in the country has eased and oil prices continue to rise, we are expecting the country’s orders on infrastructure to increase and Hanwha E&C is likely to win more orders based on the trust it has built with the Iraqi government.”