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| SK E&C Vice President Joo Yang-gyu, second from left, poses with Philippine President Rodrigo Duterte, third from left, during a business forum in Seoul, June 5. From left are Seohee Construction Vice President Ryu Byung-sun, Joo, Duterte and Philippine Energy Secretary Alfonso Cusi. / Courtesy of SK E&C |
By Nam Hyun-woo
SK Engineering & Construction is expanding its presence as a global developer, winning a series of key overseas development projects in recent years.
SK E&C said Wednesday it has signed a letter of intent with the Philippine government on building coal-fired power plants, during a ceremony on Friday.
Through the independent power producer (IPP) project, worth 2.2 trillion won ($2 billion), a consortium led by SK E&C will build and operate two 600 megawatt power plants on Luzon Island. It was proposed to the Philippine government during a June 5 business forum in Seoul attended by President Rodrigo Duterte.
The company said the power plants will be ultra-supercritical plants, whose generation efficiency is 15 percent higher than others, thus reducing the amount of coal used and emissions. Also, SK E&C will likely be granted pioneer status, which exempts the company from corporate income tax for up to six years.
SK E&C's global move has been picking up momentum recently. In February, a separate consortium led by the builder won a $737 million project building the Almaty Circular Road in Kazakhstan.
It was the first public-private partnership (PPP) project by the Kazakhstan government and SK E&C as they broke ground for the 66 kilometer road earlier this month.
Last year, SK E&C was awarded three overseas development projects, including the Canakkale 1915 Bridge project in Turkey.
The 3,869 meter bridge is currently under construction and will be the longest suspension bridge in the world by the length of its main span of 2,023 meters.
SK E&C attributed its recent surge in development projects, such as IPP and PPP, to its preparation for more than 10 years.
"Since the mid-2000's SK E&C has established teams and nurtured specialists to enhance its capabilities in infrastructure PPPs and IPPs," an SK E&C official said.
"Since infrastructure PPPs and IPPs include not only construction but also other elements of a project such as project financing, licensing and contracting, experience in coordinating various entities' opinions and risk diversification are important."
"For builders, such projects allow a company to design a quality project and guarantee profitability because the ordering entity mostly selects builders through private contracts, not competitive bidding," the official said.
SK E&C Vice Chairman Cho Ki-haeng said: "Development projects take a long period of time before seeing results and SK E&C is currently looking at the fruits of its long preparation and investments. SK E&C will continue its development projects in not only Asia but also other regions so it can be a global developer."
