South Korea’s GS Engineering & Construction Corp. said on Monday it expects to resume the construction to build a new city in Nha Be, Ho Chi Minh City late this year after Vietnamese authorities finally cleared hurdles related to compensation for land expropriation for affected dwellers.

The builder said the Ho Chi Minh City People`s Committee recently agreed to transfer the Nha Be project site to GS E&C by the end of May after removing high-voltage facilities remaining on the site.

The Nha Be project calls for the establishment of a 3.4 million square meter new city, about 5km away from the economic center of Vietnam. It is the first city construction project led by a single Korean company in Vietnam.

The Korean builder was entitled to develop the new city in the early 2000s in return for its construction of an outer ring road in Ho Chi Minh City. But the project came to a halt after GE E&C signed an investment agreement in 2007 due to conflicts with local residents over land compensation, tax problems and the international financial crisis.

A company official said Vietnamese authorities are cooperating regarding the permission for groundbreaking and the project will be able to get back on track from July or August with groundbreaking.

Meanwhile, GS E&C shares rose to a 52-week high on Monday. The stock was up 7.22 percent to close at 46,750 won ($43.77). Korea Investment & Securities said it maintained its ‘buy’ on the stock with a target price up from 39,000 won to 52,000 won, saying the builder’s expected net profit from the Vietnam New City Project to last until 2032 is 1.1 trillion won, or 1,700 won per share.

By Park In-hye and Minu Kim

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