The South Korean steel maker Posco has agreed to sell a 38 per cent stake in its engineering and construction division to Saudi Arabia’s Public Investment Fund (PIF) for $1.08 billion.
The Posco chairman Kwon Oh-Joon announced that it would also collaborate with PIF with a view to setting up a Saudi government-run construction firm. The joint venture would target major railroads, hotels and other government-commissioned building programmes in the kingdom.
Saudi Arabia needs more capacity in its contracting market as there are only a handful of companies capable of delivering the country’s mega projects. As a result, several of its flagship infrastructure projects have suffered from long delays.
For instance, a new terminal at King Abdulaziz International Airport, north of Jeddah, that was awarded under a three-year contract in November 2010 is now set to be completed next year. The Haramain High-Speed Rail project is currently running about two years behind schedule. It is now set to be delivered in December 2016.
Posco said that PIF’s investment is likely to be finalised in August.
mfahy@thenational.ae
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