Local Vietnamese sources have reported that South Korea's major builders are scrambling to win orders for highway construction from Vietnam, with new overseas construction orders tumbling.
According to the International Contractors Association of Korea (ICAK), new overseas construction orders in the first quarter plunged 42 percent year on year to a combined $8.2 billion on decreased demand from Asian countries stung by the global economic recession, while new orders from Asian countries, including Vietnam, fell 65 percent to $1.92 billion in the January-March period, compared to the year-ago period.
The ICAK has forecasted that demand for highway construction in Vietnam would increase sharply on the back of the country's policy to expand its nationwide highways, according to the local sources.
On the other hand, the Vietnamese government has mapped out a plan to construct highways spanning 5,753 kilometers (3,574 miles) nationwide. Between 2006 and 2020, the country will pave a total of 2,235 kilometers of highway. Four highways spanning 231 kilometers are already under construction.
In February 2008, South Korean state-run builder Korea Expressway Corp. signed a deal with Vietnam Infrastructure Development and Finance Investment to design a 105.5-kilometer highway linking the Vietnamese capital Hanoi with Haiphong, a port city 100 kilometers from Hanoi.
Following the deal, GS Engineering and Construction Co., South Korea's second largest builder, won a $175 million order in December 2008 to build a 9.3-kilometer section of the Hanoi-Haiphong expressway from Vidfi. The builder plans to complete construction by October 2011.
Meanwhile, South Korean builder POSCO Engineering and Construction Co. signed a $153 million deal in March with state-run Vietnam Express Corp. (VEC) to build a 27 -kilometer section of the 244-kilometer highway linking Lao Cai and Noi Bai. POSCO Engineering and Construction is in talks with VEC to obtain orders to construct a 22.1-kilometer section of the highway.