Saudi Arabia: Contract of Korean company to build tunnel in Neom cancelled
A major tunnel construction contract in Saudi
Arabia’s Neom City project, led by
South Korean firms, has been terminated due to the client’s internal
restructuring.
On March 13, Hyundai Engineering & Construction
announced that the tunnel project contract awarded by Neom Company in June 2022
had been cancelled. The company said it received an official termination notice
from Neom the previous day, citing a request from the client to end the
contract as part of a business restructuring.
The project involved building a 12.5-kilometer underground tunnel section in Neom City, located in Tabuk Province, Saudi Arabia. The contract had been secured by a consortium consisting of Samsung C&T, Hyundai Engineering & Construction, and Greece’s Archirodon.
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Saudi Arabia had planned to construct the
tunnel beneath the linear city project known as “The Line,” which would
accommodate a highway, a subway line, and a freight railway. The total contract
value was estimated at about $1 billion.
Hyundai Engineering & Construction’s share
of the contract, disclosed in 2022, amounted to roughly 723.1 billion won. The
original construction period was scheduled to run until December 29, 2025.
The company stated that all settlement related to work already performed has been completed, meaning no financial losses have been incurred so far. However, specific details, including the termination payment amount, were not disclosed due to confidentiality clauses in the contract.
Source:
ChosunBiz
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