Korea Expressway Corp. (KEC) and SK Engineering & Construction (SK E&C) said on May 26 that they will sign a road operation and maintenance contract with BAKAD Investment and Operation LLP, the operator of the Almaty ring road investment project in Kazakhstan.
The project to build 66km (4-6 lanes) of the outer ring road in Almaty, Kazakhstan, is a 900 billion won (some $738 million) public-private partnership project (PPP), in which SK E&C will manage the construction sector (4 years, about 625 billion won), while KEC will establish a local corporation with SK E&C to operate and maintain the project for 16 years (about 175 billion won).
On Feb. 12, the two companies signed a financial agreement worth 700 billion won ($574 million) with a creditor group, including the European Bank for Reconstruction and Development (EBRD), and signed an operation and maintenance contract, which was considered the biggest challenge among the prerequisites for loan approval, to accelerate the progress of the project.
In particular, this contract could be achieved through teleconference between negotiators when entering or leaving the country was banned owing to the outbreak of Covid-19.
Meanwhile, Kazakhstan's Almaty ring road is the first case in which KEC operates and maintains overseas roads. KEC aims to win orders for operation and maintenance of 1,000 kilometers of overseas roads by 2030.
KEC has entered overseas markets mainly through construction supervision and technology consulting, but plans to secure a long-term and stable profit structure by strengthening its entry into the operation and maintenance sectors, which are core competencies, and drive private companies to enter overseas markets.
In addition, for the construction project of the Padma Bridge in Bangladesh, which is currently under construction supervision by KEC, KEC was selected as a preferred bidder for the operation and maintenance project (10 years, about 100 billion won or $82 million) and is expected to win the project at the end of this year if the negotiations are completed well.
An official of KEC said, "Based on the know-how on maintenance and management of expressways accumulated in Korea for 50 years, we will provide the best service in Kazakhstan."
