[K-Construction, New Challenge]
Promoting K-New City Construction with Kuwait Government
Vietnam Economic Cooperation Industrial Complex Scheduled for Completion in September Next Year
Providing Comprehensive Support for Domestic Companies' Overseas Expansion
Industrial complexes and new towns familiar to us are being constructed overseas. In Vietnam, an economic cooperation industrial complex is being developed through bilateral cooperation, and in Kuwait, a Korean-led new town construction project is underway. These projects are all based on government-to-government (G2G) cooperation, with Korea Land and Housing Corporation (LH) securing the contracts. This is the result of over 60 years of accumulated trust in the international community and extensive experience in housing and urban development.
Korean-style New Town Construction in Kuwait Gains Momentum
On the 4th, LH won the project management (PM) contract for the Abdullah New Town construction from the Kuwait Public Authority for Housing Welfare. The project budget is approximately 17 billion KRW, and LH will manage the entire new town construction project for three years on behalf of the Kuwait Public Authority for Housing Welfare.
LH won the contract for the Abdullah New Town construction project management service from the Kuwait Public Authority for Housing Welfare on the 4th. After the announcement of the project management service contract award, Rashid Al Enezi, Director of the Kuwait Public Authority for Housing Welfare (second from the left), Lee Ji-soon, LH Headquarters Director (third from the left), and Jeong Byeong-ha, Ambassador to Kuwait (fourth from the left), are seen posing for a commemorative photo. [Photo by LH]
Specifically, the tasks include ▲establishing a project management system ▲managing construction schedules and detailed processes by phase ▲budget management and procurement planning ▲preparing bidding documents and supporting tenders ▲design review and technical support.
With this contract, the Abdullah New Town project will be fully launched. Land development for housing and infrastructure will begin within the year, followed by phased orders for residential area construction and public facility buildings.
Abdullah New Town is located 30 km west of Kuwait City, the capital, and is the most strategically positioned among the new towns promoted by the Kuwaiti government. The total project cost is about 23.6 trillion KRW, three times the size of Bundang (64.4 km²). It is planned to accommodate 46,000 residents.
Currently, Kuwait suffers from a chronic housing shortage. Although the government is legally obligated to provide housing to married men without homes, over 90,000 households have yet to receive housing. Compared to the national population of 1.38 million, the housing shortage is severe. To quickly resolve this issue, the Kuwaiti government has consistently sought assistance from the Korean government, which has extensive experience in rapidly constructing new towns.
Considering Kuwait’s housing culture, which does not favor apartment living, LH plans to develop low-rise houses and townhouses in Abdullah New Town. The urban infrastructure will focus on implementing smart technologies suitable for the Middle Eastern desert environment. Additionally, features such as artificial lake parks using recycled water, smart fine mist cooling, district cooling systems for water and energy conservation, smart water grids (real-time leak detection), smart microgrids (power supply management), and an Integrated Operation Center (IOC) will be introduced.
Korean-style Industrial Complex Established in Vietnam…Supporting Domestic Companies’ Entry
LH’s first Korean-style industrial complex project in Vietnam is also progressing smoothly. The Korea-Vietnam Economic Cooperation Industrial Complex (hereafter, Economic Cooperation Industrial Complex) broke ground last September, covering a site area of 1,431,000㎡. The current progress rate is 57%, with completion expected by September next year.
A view of the Korea-Vietnam Economic Cooperation Industrial Complex being developed by LH in Vietnam. [Photo by LH]
The Economic Cooperation Industrial Complex is the first Korean-style industrial complex in Southeast Asia targeting Korean companies as tenants. Korean companies participate in all construction phases including design, construction, and operation, with a consortium of Korean companies including LH holding 75% equity and local Vietnamese partners holding 25%.
This marks a significant milestone as the domestic public sector takes its first step into the Vietnamese industrial complex market, previously led by Singapore and Japan, thereby laying the foundation for Korean companies’ entry.
Since Vietnam’s economic liberalization in 1986, the government’s proactive investment promotion policies, combined with cheap and abundant labor and rapid urbanization, have driven sustained economic growth averaging over 6% annually for more than 30 years.
Korea is the top foreign direct investor (FDI) in Vietnam, with about 9,000 Korean companies having entered the market. Most have independently sought factory sites and conducted business, often facing communication issues with local authorities or falling victim to local fraudsters.
However, once the Economic Cooperation Industrial Complex is established next year, Korean companies’ entry into Vietnam is expected to become much smoother. Domestic companies will receive one-stop services covering administrative, financial, and tax matters from the entry stage through factory operation.
LH has secured permits allowing companies entering the Vietnamese industrial complex to enjoy corporate tax exemptions for two years and a 50% reduction for four years. Particularly, companies engaged in parts and materials industries and high-tech technology development designated by the Vietnamese government can receive a four-year corporate tax exemption, a 50% reduction for nine years, and a 10% reduction for two years.
Focus on Government-to-Government Cooperation Projects…Leading Support for Domestic Companies’ Orders
As such, LH is proactively leading various overseas projects based on government-to-government (G2G) cooperation. It secures preliminary project rights through direct negotiations with local government agencies and subsequently forms consortia with domestic companies to support overseas construction orders both upstream and downstream.
In particular, LH focuses on supporting the private sector as part of One Team Korea to activate overseas orders. Representative examples include global business conventions, invitation training for officials from partner countries, and collaboration programs with the World Bank. Through these, LH obtains diverse information from various countries, builds networks, and actively lays the groundwork for overseas construction orders.
Last June, Lee Han-jun, President of Korea Land and Housing Corporation (LH), took a commemorative photo after signing a memorandum of understanding to promote the 'Urban Growth Partnership Program' (UGPP) with Nguyen Huong Chang, Governor of Bac Ninh Province, at the Presidential Palace in Hanoi, Vietnam. [Photo by LH]
In fact, in June, coinciding with the Korea-Vietnam summit, LH achieved the signing of an MOU for the Urban Growth Partnership Program (UGPP) with five Vietnamese provinces (Bac Ninh, Thai Binh, Thanh Hoa, Hai Duong, Hung Yen).
UGPP is a G2G-based urban development cooperation platform where Korea and Vietnam share experiences and know-how in new town construction and industrial complex development to establish new urban models in Vietnam.
Urban development profits are reinvested into public projects such as social housing, and Korean companies’ participation is encouraged during the project process to support overseas construction orders. Since the MOU signing, Vietnam has proposed 18 candidate sites, and LH plans to select pilot project sites considering location conditions, master plans, and local government willingness.
Additionally, in November, to participate in Ukraine’s reconstruction cooperation, LH invited Ukrainian officials for a knowledge-sharing training program on post-war reconstruction. The training was attended by senior officials from Ukraine’s Ministry of Infrastructure and local governments in major affected areas such as Kyiv and Lviv.
The invitation training included discussions on the Korea-Ukraine reconstruction cooperation program and urban development master plan formulation, and cooperation MOUs were signed with Ukraine’s Ministry of Infrastructure and Lviv City, which are responsible for reconstruction.
LH is jointly implementing the master plan establishment project for the Kyiv area in collaboration with the Korea Overseas Infrastructure & Urban Development Corporation (KIND), and plans to consult with the Ukrainian government and related ministries including the Ministry of Land, Infrastructure and Transport to identify priority projects.
An LH official stated, “We will take the lead in facilitating the overseas expansion of our design, construction, and financial companies by leveraging our accumulated development project know-how and credibility.”
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