South Korea’s Hanwha Resumes $9.8 Billion Iraqi City Development Project After Payment Issues

BAGHDAD – South Korea's Hanwha Group has partially resumed its work on a $9.8 billion city development project in Iraq, the Bismayah New City project, following a hiatus of over a year caused by unpaid construction bills, the Ministry of Land, Infrastructure and Transport announced on Monday. The project's continuation marks a significant step in the collaboration between the two countries in the infrastructure sector.

According to Yonhap News Agency, Infrastructure, and Transport, a ceremony was held in Iraq to celebrate Hanwha Group's recommencement of the Bismayah New City project. The event was attended by a South Korean government task force led by Land Minister Park Sang-woo, as well as Haider Muhammed Makkiya, head of the Iraqi National Investment Commission (NIC), the project's contracting authority.

The Bismayah New City initiative, which began in 2012, aims to construct 100,000 housing units along with various social infrastructure facilities across a 5.5 million square-meter area near Baghdad. The project encountered financial difficulties from the Iraqi side, leading to Hanwha suspending construction in October 2022. At that time, only a minimal staff was maintained on-site for essential maintenance.

Negotiations between Hanwha and the NIC for the project's resumption started in January of the previous year. These discussions eventually led to Hanwha receiving $230 million in December of the last year out of the $629 million owed. Officials have clarified that the current resumption focuses on completing the unfinished segments of the project and transitioning towards the conclusion of the existing contract, indicating that this step does not represent a full project resumption.

A Hanwha official emphasized the conditional nature of the project's continuation, stating, "Full resumption of the project can be discussed only after receiving the remaining outstanding payments." This phased approach underscores the complexities of international construction projects and the importance of financial commitments in ensuring their completion.

scroll to top