Korean Contractors Hope for a Windfall in Postwar Iraq
By DON KIRK


SEOUL, South Korea, March 19 — South Korea's big construction companies, which have been important builders throughout the Arab world for decades, are hoping that the war in Iraq will produce a bonanza for them in a lucrative market they had to abandon 12 years ago.

Representatives of the big contractors, led by Hyundai Engineering and Construction, one of the leading builders in Iraq before the 1991 Persian Gulf war, said today that they had been quietly developing plans for weeks to jump back in when the shooting stops and the reconstruction begins.

"Certainly we should have an interest in going back," said Cha Song Chun, senior vice president for marketing at Hyundai Construction. "In the past we built a hospital, roads, highways, railways and highways. We will see what we can do."

South Korea's construction companies, many of them still trying to fully recover from the Asian financial crisis of 1997 and 1998, hope to move quickly to take over jobs that military engineers are likely to have begun in the immediate aftermath of the war.

Indeed, South Korea's contribution to the American-led coalition may include sending an army engineering unit to Iraq to help start the reconstruction, Ra Jong Yil, President Roh Moo Hyun's national security adviser, said today.

Mr. Ra said that American and South Korean officials were talking about possible noncombat roles for Korean troops, including aiding the evacuation of refugees as well as reconstruction, but that nothing had yet been decided.

Still, the Korean contractors, known for bidding aggressively for work in politically risky places, is aching to get back to Iraq.

"We were the last construction company in Iraq before the gulf war," said Cho Sang Hoon, a deputy general manager at Hyundai Construction. "We still maintain a branch office there."

That office, Mr. Cho said, is a one-executive outpost left behind to watch over millions of dollars worth of construction equipment stranded in the country since 1991. The manager left Baghdad a month ago and is now in Amman, Jordan, waiting for a chance to return.

Other companies are eager as well, and the Seoul government is encouraging them to look to Iraq as a source of new work at a time when business elsewhere is soft. "We have not had any construction in Iraq since before the gulf war," said Kim Heung Jin, deputy director for overseas construction at the construction ministry. "Before that, we had many construction companies in Iraq. They all want to go back. Even if they don't have a detailed plan, they just want to go back."

That includes Daelim Industrial, which built bridges and highways in Iraq before 1990. "If we have an opportunity, we will go back," said Kwon Sung Yong, the company's planning manager. "We are now monitoring the situation." And it also applies to LG Engineering and Construction, which has never built in Iraq before but sees attractive prospects now, perhaps even for work before the shooting is over.

But the company with the most at stake is Hyundai Construction, whose founder, Chung Ju Yung, always viewed it as "the mother company" of a business empire that once sprawled from cars to shipbuilding to semiconductors before it was broken up in the late 1990's.

Mr. Chung, who died two years ago this month, went into Iraq in 1980, winning contracts to build a $300 million medical complex, a sewage treatment plant and a number of supermarkets. Hyundai crews stayed in the country and kept working through the war with Iran that Iraq started later that year, adding assignments to build apartment blocks on Baghdad's historic Haifa Street, a $400 million power plant south of the capital and an expressway from the border with Jordan to the Syrian border.

A small Hyundai contingent even stuck around through the invasion of Kuwait and counterinvasion by the American-led coalition in 1991. It was not until after American warplanes bombed radar and missile sites in southern Iraq in January 1993 that the company gave up hope of resuming work on its projects in Iraq any time soon, and pulled out almost all its remaining employees.

"They still owe us more than $1 billion," Lee Tae Suk, senior manager of public relations for Hyundai Construction, said of the Iraqi government.

Mr. Lee said his company now had 22 active projects in the Middle East, including a $1.2 billion contract to build parts of the South Pars natural gas pipeline in Iran.

But it badly needs profitable new work, and is looking urgently toward its old stomping ground in Iraq to find it. After heavy losses in 2000 and 2001, the company reported a tiny $22 million net profit last year, and has debt equal to seven times its equity. "We lose a lot of money," Mr. Lee said.