KSA: Samsung Eng quits work on power plant project
Samsung Engineering received a termination notice from state-owned, Saline Water Conversion Corporation on the engineering, procurement, and construction contract
South Korea’s Samsung Engineering said it won’t be completing the construction of a $3bn, 3,100-megawatt (MW) power and desalination plant in Saudi Arabia.
Samsung has stated that the client terminated the contract due to difference over the final construction terms.
In a statement, the company said it received a termination notice from state-owned, Saline Water Conversion Corporation on the engineering, procurement, and construction contract, South Korean publication, Pulse reported.
The Samsung-led consortium won the $3bn project in 2012 to build a power plant on the Red Sea coast in the Yanbu Industrial City.
The development is part of the country’s multistage project to desalinate and supply freshwater and power to the industrial city and residents of Yanbu and nearby region.
Samsung was the main constructor for the power plant, commanding half, or $1.5bn in lump-sum contract value.
At the time, the contract made up nearly 20% of the Korean construction company’s annual sales, the report said.
The contract was initially due to be completed by 28 December, 2016, but pushed back to 25 August, 2017 upon agreement.
A company official said about 55% of the construction has been completed and claimed the contract termination won’t hurt its bottom line because it has already been paid for the construction so far.