The government has not yet set this year's overseas construction order target as it is likely most oil-producing countries would cut back on new projects under the low oil price regime. This is the first time for the government not to set the annual order booking target amount in ten years since 2004.
According to construction industry sources on January 19, the Ministry of Land, Infrastructure, and Transportation and the International Contractors Association of Korea decided not to set the year's order goal, given the current unpredictable oil market situation.
Since reaching the US$71.5-billion order booking volume in 2010 thanks to the nuclear reactor project worth $18.6 billion, Korean construction contractors have not been able to achieve the same feat for four consecutive years even though the ministry kept setting the target above the $70-billion level. Last year, contractors were unable to hit the $70-billion target by winning $66.0 billion in overseas contracts, the highest-ever level since 2010.
Given most Middle Eastern oil-producing countries are expected to postpone major construction orders related to gas and plant projects this year, Korea's contractors are urgently needed to find alternative markets. Away from the Middle East, they are looking to find new opportunities in South America and Africa. Instead of focusing on oil and gas plants, they will also expand into other areas such as public works and new residential town construction projects.
Source: Korea Economic Daily
