DL E&C participates in the construction project of a hydropower plant in Indonesia. It has expanded its business area beyond simple contracting into the area of Construction Management (CM), which has been monopolized by advanced countries such as the United States and Europe.
DL E&C announced on the 17th that it had signed a $15 million (about 22 billion won) contract with the special purpose corporation PT. Siborpa Eco Power, in which Korea Midland Power is a major shareholder, on the 14th.
PT. Siborpa Eco Power was established to promote the construction project of the Siborpa hydropower plant in Indonesia. This hydropower plant will be constructed with a capacity of 114 megawatts (㎿) on the Bilah River in northeastern Sumatra, Indonesia. Once the plant is completed, it will produce enough electricity for approximately 1 million local residents for a year.
DL E&C will take charge of CM, which comprehensively manages design and construction on behalf of the client until August 2030. CM is a technology-intensive field that requires a high understanding of project experience and processes. From the client’s perspective, there are advantages of significantly reducing expenses and time.
This order is a result of DL E&C proposing a new business model of CM to the client, breaking away from its previous simple contracting. Amid the current competitive threats from low-priced Chinese bids in overseas orders, domestic construction companies have expanded into technology-intensive business areas instead of price competition. This project, where a public institution proposes a project and a domestic corporation participates in design and construction management, is expected to be an important case of 'public-private (民官) win-win cooperation' in the future.
In this project, DL E&C's alternative design capability received high praise. DL E&C was the only company to propose an alternative design among those participating in the bidding. Hydropower generates electricity by utilizing the potential energy of water falling from a dam through a waterway. Initially, the client planned the waterway as a 4.5 km long underground tunnel. However, DL E&C determined that excavation would be difficult due to the unstable ground condition of Sumatra Island, which belongs to the Pacific Ring of Fire, and proposed changing the underground tunnel to an above-ground canal to actively address issues such as constructability, schedule, and cost.
DL E&C already has numerous construction achievements in Indonesia. At the end of this month, it is expected to complete the 'Karian Dam', the third largest in Indonesia. In 2022, it commenced construction on Indonesia's first pumped-storage hydropower plant, the 'Upper Chisokan Hydropower Plant.'
Moon Byung-doo, head of the civil engineering division of DL E&C, noted, "The technical expertise accumulated from constructing hydropower plants in the Middle East and Southeast Asia has influenced our success in winning this bid, and it is significant that we have entered the CM market, which has been monopolized by companies from advanced countries such as the United States and Europe."