In March last year, Iraq’s state-run National Investment Commission announced the National Housing Program, a plan to build 1 million homes as part of efforts to rebuild the country.

Under the plan, the Iraqi government launched a scheme to build a new town in Bismayah and Korea’s Hanwha Engineering & Construction Co. won the project.

The company signed the $8 billion contract with the Iraqi government to build 100,000 residential units in Bismayah, which is to become the largest satellite town of Baghdad.

The order also marked the largest-ever Korean overseas city development project, according to Hanwha officials.

The new 1,830-hectare city will be developed 10 kilometers southeast of Baghdad over seven years. It will be six times the size of Yeouido, and similar in size to Bundang, a new town in Gyeonggi Province built in the early 1990s.

The contract takes up nearly 10 percent of the total value of overseas construction orders that Korean companies won last year. The contract helped the nation’s combined value of overseas construction orders for the past 47 years surpass $500 billion in June last year.

Hanwha E&C said in a forum on job creation last month that it had teamed up with about 100 small and medium-sized builders and construction material providers for the project. More than 1,000 workers will be dispatched to the Middle Eastern country to participate in the construction, according to company officials.

“Eventually, the project will create more than 550,000 jobs, setting a good example of the success story on the shared growth between conglomerates and small and medium-sized companies, as well as becoming a starting point for the second boom of the Middle East construction market,” the company said.

Hanwha is currently building the base camp for the project, where its officials said would be able to accommodate about 20,000 workers. At present, about 400 executives and officials from Hanwha and its partners are residing there.

The 20,000 workers will be mobilized for the construction of the base camp, sewage disposal plants and a precast concrete plant ahead of the construction of houses slated for the first half of next year.

Company officials said the precast concrete plant would produce enough slabs and wall panels to build 80 homes every day. To make those units will require a daily input of 6,400 tons of concrete.

Hanwha has completed consultation with the Iraqi government on the new town’s infrastructure and design.

During his visit to Seoul in January, NIC chairman Sami R. Al-Araji credited the smooth progress of the project to Hanwha Group chairman Kim Seung-yeon.

Korean Ambassador to Iraq Kim Hyun-myung also said Middle Eastern countries put much importance on trust and personal relationships in business. Company officials quoted the diplomat as saying that the Iraqi government had a deep trust in Hanwha E&C chairman Kim.

Hanwha E&C vice chairman Kim Hyun-chung said the company has been in discussion with the Iraqi government about an additional reconstruction project worth $10 billion. But the absence of the chairman was fanning Iraq’s concern, he added.

According to the company, Iraq plans to invest a total of $275 billion in rebuilding. The rehabilitation project includes supply of houses ($80 billion), investment in energy ($80 billion), and investments in IT, medical and security industries ($69 billion).

As the Iraqi government has begun in earnest to push for the reconstruction, builders from China, India and European countries are jumping into the competition to win project bids.

Hanwha E&C vice chairman Kim expressed concerns that if chairman Kim’s absence continued for too long, rival builders from China and Turkey may snatch the leading position his company has maintained in Iraq.

By Choi In-jeong (injeongchoi@heraldcorp.com)