GS Engineering & Construction (GS E&C) recently announced that one of its overseas construction projects won seven years ago was canceled on December 20.
The canceled contract, worth 3.25 trillion won (US$2.9 billion), was from Perdaman Chemicals and Fertilizers (PCF) in Australia in November 2010 and was to build the largest urea fertilizer manufacturing factory in the world.
GS E&C explained that the contract has been canceled because the ordering party did not complete financing and coal supply contracts and licensing related to the project was delayed. The money, in the meantime, is equivalent to 29.5% of GS Engineering & Construction’s sales for last year and 44% of the company’s sales for 2009.
These days, GS E&C is having a hard time both at home and abroad. For example, it recently failed to win a large-scale housing reconstruction project in Banpo, Seoul worth no less than 2.6 trillion won (US$2.3 billion) in total and its recent tower crane accident in South Korea resulted in five casualties. Besides, the Korea Commission for Corporate Partnership (KCCP) recently lowered its rating of GS E&C for the company’s violation of the Subcontract Act.