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By Cho Jin-seo
Staff Reporter
July 23 was a monumental day for Korea's construction engineers. Being built by Samsung Corp., the Burj Dubai tower in the United Arab Emirates has become the world's tallest building at 512 meters, beating the reigning champion Taipei 101 tower by four meters. The super-tall skyscraper is a symbol of the prospering overseas construction business of South Korean firms. According to the Ministry of Construction and Transportation, orders received outside Korea this year reached $17 billion, breaking the $16.5 billion record set last year in only seven months.
The tally is continuing to grow upward in the second half of the year, just like the Burj Dubai keeps growing skyward. Samsung, which began construction in February 2005, has completed 140 floors so far. The final number of floors and exact height of the tower has not yet been revealed at the request of its owner Emaar Properties. But it is expected to be over 160 floors and 800 meters, including a metal minaret which will be over 100 meters high.
``Our goal is to add one floor every three days with our sophisticated technologies,'' said Kim Kyung-jun, Samsung's onsite manager of the project. ``We are setting up a milestone in the history of the construction industry. We are proud that we are representing the Korean construction industry and we are determined to complete the construction on schedule with utmost accuracy.''
Samsung has been involved in the construction of the world's three tallest buildings _ the Burj Dubai, Taipei 101 and Malaysia's Petronas Towers. But it is the first time for it to be a leading contractor. The tower is the epitome of cutting-edge building technologies and is built to withstand earthquakes of over 7.0 in magnitude and wind speeds of more than 36 meters per second, the firm says.
It was difficult to imagine that the construction industry would grow so fast. Overseas orders were only $3.6 billion in 2003. Then from 2004 the firms began to ride on the so-called second Middle East boom. There has been an endless supply of projects in oil-rich Arab nations thanks to soaring oil prices. This year, the government expects more than $20 billion of orders to be won in foreign countries.
More than two thirds of the overseas projects are plant and infrastructure projects. Doosan Heavy Industries, a company that excels in building desalination facilities, is leading the field as it alone received $2.85 billion worth of orders this year. Hyundai Heavy Industries ($2.08 billion), Samsung Engineering ($1.97 billion) and Samsung Corp. ($1.22 billion) are following in the pack.
Investors are upbeat about the future of the overseas business as well, expecting the foreign orders will compensate the loss in the sluggish domestic market.
``The profitability of the overseas divisions of major builders should continue to improve, as the companies did substantial construction-loss provisioning from the fourth quarter of 2006,'' said Choi Na-young, analyst at Woori Investment and Securities. ``We expect the major builders' results to improve substantially from 2008.''
The overseas construction had its heyday in the 1970s when dollar-thirst Korean firms rushed to the Middle East to take part in infrastructure projects, such as building highways in Saudi Arabia and laying massive aqueducts in Libya. The foreign orders received in 1981 and 1982 each exceeded $13 billion. Only the United States had more overseas projects than South Korea at the time.
It took decades for the construction industry to build up a global reputation as relentless and arduous builders. But it took only two years to lose it all.
In 1994, a middle section of Seongsu Bridge fell into the Han River in Seoul during the morning rush-hour, killing 32 people and injuring 17. The bridge was built by Dongah Construction, the builder of the Libyan waterway, in 1979. Investigators found that the company made many omissions in the welding and its construction management and inspection methods were remarkably slipshod. The accident was broadcast worldwide and many believed that Korean firms' obsession with speed finally paid its price.
Another disaster hit the construction industry less than a year later. Sampoong Department Store in southern Seoul collapsed on June 29, 1995. With 501 killed and 937 injured, it was the worst peacetime disaster in South Korean history. Again, shoddy engineering practices and government corruption were blamed for the accident. Few wanted a Korean firm to build their homes and bridges anymore.
Fast but Perilous
Though many Korean firms are now globally recognized for their competence, they are still not deemed completely safe and trustworthy. According to the Labor Ministry, eight of the top nine firms with most industrial fatalities in Korea in 2006 were construction firms.
Major accidents have taken place once every few years in cities like Busan, Daegu and Seoul. Samsung Corp., the builder of Burj Dubai, is not free from accidents either.
In October 2005, a GS Home Shopping logistics center site in Icheon, Gyeonggi Province, collapsed, killing nine workers. The project was led by GS E&C but the firm refused to take responsibility, saying that it had subcontracted the crashed part to Samsung Corp. Government investigations later found that Samsung Corp. used an unverified engineering method in building it.
Since then, the two firms have filed civil lawsuits against each other. They are also charged with criminal suits by the prosecution. The cases are still pending at the court and one or both of them can be suspended for up to one year depending on the court's ruling.
GS was also notoriously named as the worst workplace by NGOs in 2006 for its high fatalities at workplaces. Including the Icheon collapse, a total of 46 workers were killed from 2002 to 2006 at the firm's construction sites, according to the ministry.
More blood has been shed this year. In April, nine workers fell to their death as a bridge collapsed during construction on Sorok Island, South Jeolla Province. Hyundai E&C was in charge of the project and is waiting for the government's ruling.
The situation doesn't seem to be improving. According to the Labor Ministry, some 2.8 million are employed by the construction industry. This year alone, 157 were killed and 3,748 were injured, up from 19 deaths and 362 injuries of the same period of last year.
Unscrupulous business practices such as price fixing are also a chronic problem of the industry. The Fair Trade Commission fined seven construction firms for a total of 36.5 billion won for collusion in sewerage system contracts ordered by local governments earlier this month. It also charged 22.1 billion won on six firms _ Samsung, Daewoo, Hyundai, GS, SK and Daelim _ for colluding on subway construction projects in Seoul.
indizio@koreatimes.co.kr
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