POSCO wins $900 mil. project for hotel in Saudi

A rendering of a hotel to be built by POSCO Engineering and Construction in Saudi Arabia. / Courtesy of POSCO Engineering & Construction

POSCO Engineering & Construction (E&C) said Tuesday it won a $900 million deal to jointly build a hotel in Madinah Hajj City, Saudi Arabia, with POSCO E&C Saudi Arabia (PECSA), a joint corporation between POSCO E&C and Saudi’s Public Investment Fund (PIF).

The four-star hotel will include five 20-story buildings with 3,070 rooms in total and will be built by February 2019, ordered by PIF-owned Dar Al Hijra REDIC, POSCO E&C said.

According to POSCO E&C, the Saudi Arabian government has been developing Madinah Hajj City, a new town near downtown Madinah, since 2014 in order to offer amenities for Muslim pilgrims, who make their trips from Mecca to Madinah.

After winning the national industrial project of Saudi Arabia for the first time, POSCO E&C and PECSA said they presented a new paradigm of obtaining orders in the Middle East construction markets, where potential risk and tough competition exist.

As the ordering organization and the constructor will mutually invest in the project, POSCO E&C said the construction will be low-risk, high-income, excluding any possible dispute between the ordering organization and local subcontractors, which is common in the Middle East construction market.

POSCO E&C plans to teach its developed construction technologies to Saudi Arabia and supports the country’s construction business.

The company is also offering a 12-day training session for Saudi Arabian employees of the local joint corporation at its Global Leadership Center in Songdo, Incheon, from Oct. 31.

“Our company will successfully complete this project with our developed construction management technologies and differentiated strategies from local builders in Saudi Arabia,” POSCO E&C President and CEO Han Chan-kun stated in a press release. “We will continue to seize chances to win more construction projects in other Middle East countries.”

Meanwhile, PECSA seeks to be one of the top five constructors in the Gulf Cooperation Council until 2025, based on POSCO E&C’s developed technologies.

(Advertorial)