South Korea Engineering, Procurement and Construction (EPC) Companies Have Bigger Role to Play in the Infrastructure Boom
Doha Bank conducted a knowledge sharing on “Changing Global Dynamics and Opportunities for South Korea in GCC Countries “on 16th October 2012 at Lotte Hotel, Seoul. HE Sheikh Abdulla bin Saoud Al Thani, the Governor of Qatar Central Bank was the Chief Guest. It was attended by HE Sheikh Fahad Bin Mohammad Bin Jabor Al Thani, Chairman of Doha Bank. Top Korean and Arab Bankers, economists and business professionals participated in this event. Dr. R. Seetharaman, CEO of Doha Bank spoke on “ Changing Global Dynamics and Opportunities for South Korea in GCC Countries”
Speaking on the occasion Dr. R.Seetharaman explained the current scenario prevailing in the global economy and the basic challenges economies face in moving from crisis to stability. He stated that “Global economy is expected to grow at 3.3 percent in 2012. Advanced economies are expected to grow at 1.3 percent for 2012. US economy growth is expected grow at 2.2 percent for 2012. Euro Zone is expected to contract by 0.4 percent for 2012.Emerging economies are expected to expand by 5.3 percent in 2012.Growth will slow in several large developing countries, mostly because they will export less to Europe and the United States. China’s economy will likely expand by 7.8 percent this year. India’s economy will grow by 4.9 percent in 2012.Spillovers from advanced economies and domestic issues prevailing in emerging and developing economies have held-back activity in emerging market and developing economies. The revival of growth in Global economy is required. Delayed or insufficient policy action may further escalate the euro area crisis. Delays in raising the federal debt ceiling in U.S could increase risks of financial market disruptions and a loss in consumer and business confidence.”
Dr. R. Seetharaman explained current trends in GCC economies. He said “The GCC GDP at current prices are expected to grow to $1.48 trillion in 2012 and the current account balance will improve on account of high oil prices. The increasing energy demand in last of couple of year’s world over had enabled GCC to generate considerable fiscal surplus thereby substantially improving its balance of payments position which has further enabled this visionary state to invest wisely on various industrial, infrastructural projects and overseas investments”
Dr. R. Seetharaman while explaining on State of Qatar’s emergence as a role model for transformation on economic and social fronts said “State of Qatar has effectively followed the true principles of globalization that is driving the world economies through progressive liberalization and modernization under the astute leadership of His Highness Sheikh Hamad Bin Khalifa Al-Thani, the Emir of the State of Qatar and His Highness Sheikh Tamim Bin Hamad Al-Thani, Heir Apparent of the State of Qatar. Qatar’s National Vision 2030 builds on a society that promotes justice, benevolence and equality. Qatar is expected to grow by more than 6% in 2012. In 2012 and beyond growth will depend on non- hydrocarbon economy. The recent Qatar budget gives importance to major infrastructure projects”.
Dr. R. Seetharaman also highlighted the bilateral trends between GCC and South Korea. He said “The Kingdom of Saudi Arabia is the fourth trading partner to the Republic of Korea, while South Korea is Saudi’s fifth-largest one. The bilateral trade between South Korea and Saudi Arabia has increased from $23.5B in 2009 to $44B in 2011 on account of increase in exports. Korea is the second largest oil importing country from Kuwait, and Kuwait is Korea’s fifth overseas construction market. The bilateral trade between South Korea and Kuwait has increased from $8.7B in 2009 to $18.4 B in 2011 on account of increase in exports. Around US$40 billion of infrastructure projects in the pipeline in Abu Dhabi, some of which could open for tender in the second half of this year. UAE and South Korea sign customs cooperation agreement in May 2012.”
Dr. R. Seetharaman also highlighted the bilateral trends between Qatar and South Korea He said ” The bilateral trade between South Korea and Qatar has increased from $9.7 B in 2009 to $21.5 B in 2011 on account of increase in exports. Korean imports from Qatar are mainly oil and gas, while exports from Korea are mostly electronics and automobiles. Samsung, the IT technology provider for the Korea World Cup 2002, offered their latest technology for the Qatar World Cup 2022. Engineering, Procurement and Construction (EPC) projects will be a key focus as the region currently accounts for up to 60 per cent of all Korean EPC contracts abroad with a total value of USD 43.3 billion. Qataris an important EPC market for Korea. Hyundai Heavy Industries was awarded the Barzan Gas Project lump sum engineering, procurement and construction (EPC) contract, which is currently the largest gas project in the region.”
Dr.R.Seetharaman highlighted the project finance details in GCC He said “Korean companies participate in project finance through Export credit agencies (ECAS). ECAs such as K-EXIM became prominent players supporting the financing of mega projects. Korean EXIMs also support trade finance in Dubai. Out of the $7.2bn debt raised for Qatar’s Barzan natural-gas project in December 2011 Korea gave $1bn. Capex of USD 225 bn is expected from 2011 to 2016 in Qatar.”
In his closing remarks Dr.R.Seetharaman stated that South Korea Engineering, Procurement and Construction (EPC) Companies have bigger role to play in the infrastructure boom.