Jung Min-ho has worked as a staff writer at The Korea Times since 2012, mostly covering social and political issues. He currently belongs to the Politics & City Desk where he covers topics such as health, labor and human rights. Prior to joining the team, he was responsible for covering North Korea and sports. His article about a biosecurity breach of Middle East respiratory syndrome won him an award from the Korea Science Journalists Association in 2016. He is also the co-author of the book, "Medical Pioneers of Korea" (2019). He served as the head of the international relations committee at the Journalists Association of Korea from 2021 to 2023.
Iraq slaps big fine on Korean firm
By Jung Min-ho
A Seoul-based construction firm, UI enc, has been ordered to pay the Kurdish Ministry of Health $22 million after breaking a contract to build a hospital in Sulaymaniya, a city located in Kurdistan, northern Iraq.
Multiple sources confirmed that the breach of contract also hurt the general level of trust in Korean firms in the autonomous region of Iraq.
Beginning in 2004, the project was scheduled for completion in 2007. But UI enc pulled out in 2009 after finishing only 32 percent of the total construction, according to Korean consul Eom Ki-young who is working in the region.
A regional court decision to impose the multimillion dollar fine was made on Feb. 12 this year. Representatives from UI enc failed to appear in court. No date was set stipulating when the fine should be paid.
After UI enc’s unexplained withdrawal, it took four years for a Turkish firm, part of the Galala Group of Companies, to complete the remaining construction work for a total of $87 million according to a source researching the project. The Kurdistan Regional Government (KRG) initiated the project by signing a $57-million contract with UI enc.
According to Goran Abdulla Sabir Zangana, a local doctor and a representative for the Federation of Civil Society Organizations in Kurdistan, the company received at least $10 million for equipment, although the total amount of money UI enc received for the project remains unclear. The KRG received its funds from the Iraqi Federal Government with about 90 percent of this coming from oil profits.
Now people in the region are demanding a full explanation of the circumstances that led to the delay and the flow of capital involved. There is also growing hostility directed toward UI enc.
“It was and is largely still, our understanding that Korea is a friend of the Iraqi people. Therefore the news about corruption committed by the Korean company is generating great anxiety and feelings of betrayal,” Zangana said.
“People initially had a good opinion about Korea’s involvement in the war in 2003 and the help of the Korean troops in reconstruction, but this project negatively affected that impression.”
Falah Murad Khan Shakarm, the Wadi Organization’s Iraq project coordinator, also said that the delay profoundly affected the image of Korea because it affected the lives of many people across the region.
“Koreans helped us so much in the past,” Shakarm said. “The Korean Army opened hospitals, schools for many people here but this (the hospital construction) is a bad thing in the people’s memory.”
Goran said that the KRG repeatedly provided extra funds for the project, and that some of this money was allocated for other purposes such as financing trips for politicians, doctors and other policy makers to Korea rather than building the hospital.
“The question is why it took the Korean company so long? The company has to answer it. But they refuse to do so avoiding our questions numerous times,” Zangana said.
The Embassy of Korea has not conducted an investigation because of the “sensitive nature of the matter,” which might be connected to corruption within the local government, although there are strong suspicions over UI enc’s involvement, Eom said.
UI enc refused to comment on the issue. The company’s offices are in Yeoksam-dong in Seoul’s Gangnam district.
An opening ceremony for the 400-bed hospital was held on May 28.