An article in Nikkei Asian Review.
Japanese firms are facing new challenges from South Korean and Chinese companies within Asia’s expanding environmental protection market.
A project to build a 318-km sewage pipe and related facilities financed by Japanese official development assistance in central Sri Lanka will be undertaken by a South Korean firm this year. Despite the use of Japan’s ODA, Sri Lanka chose South Korea’s Kolon Global, a midsize conglomerate, to carry out the project.
Private sector collaboration
According to the Japan International Cooperation Agency, countries are not required to use Japanese companies for development projects financed by Japan’s ODA, with the exception of projects subject to aid-in-grant.
Kolon said that it won the 68.5 billion won ($64.7 million) Sri Lankan order due to support from the South Korean government. The win followed a South Korean environmental forum held in Sri Lanka last year, attended by cabinet ministers from both countries as well as South Korean Prime Minister Chung Hong-won. Kolon also attended the forum, and won the order as part of an agreement between the two governments to cooperate on water and sewage improvements in Sri Lanka.
In Ho Chi Minh City, Vietnam, Kbec Korea is building a garbage landfill facility using environment-friendly technology that uses plants to treat dirty water containing organic substances.
The midsize South Korean company gained the order from a Vietnamese state-run company in Ho Chi Minh City to build the disposal field for 23 billion won after operating trial facilities in the city between 2010 and 2012. While the operation of trial facilities cost 600 million won, 400 million won was provided by the Korea Environmental Industry & Technology Institute, part of South Korea’s Ministry of Environment.
Noting that it is difficult for small and midsize companies to raise 400 million won, a KEITI official in charge of supporting South Korean company exports said the initial stage assistance helped Kbec win the big order.
South Korea plans to boost environment-related exports to 10 trillion won in 2017 from 3.3 trillion won in 2010 under the framework law on low carbon and green growth passed by the national assembly in 2010. The government is actively engaged with programs to attain the target.
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