[Asia Economy Reporter Lee Chun-hee] The Banpo Jugong 1 Complex 3rd District in Banpo-dong, Seocho-gu, Seoul, has begun the process of reselecting a construction company. The association appears to be taking thorough preliminary measures, such as operating a direct reporting center and obtaining compliance pledges, to prevent overheated bidding during the recent construction company selection process.
According to the Seoul Metropolitan Government's Reconstruction and Redevelopment Cleanup System on the 17th, the Banpo Apartment (3rd District) Housing Reconstruction Maintenance Project Association announced a bid for the selection of a construction company for the housing reconstruction maintenance project on the 17th. This project involves reconstructing the 3rd District (1,490 households) in Banpo-dong 1109, Seocho-gu, into a complex of 17 apartment buildings ranging from three basement floors to 35 above-ground floors, totaling 2,091 households, along with commercial and other ancillary facilities. The construction cost is 5.42 million KRW per 3.3㎡, with a total planned construction cost reaching 808.7 billion KRW, making it a large-scale project.
The association announced that an on-site briefing session will be held on the 25th. Construction companies wishing to bid must pay 1 billion KRW in cash out of the 80 billion KRW bid deposit by the day before the briefing session, the 24th. Of the remaining 79 billion KRW, 19 billion KRW must be paid in cash, and 60 billion KRW in performance guarantee insurance certificates or other guarantees must be submitted by the bid deadline scheduled for April 10.
Currently, many major construction companies such as Samsung C&T, Hyundai Engineering & Construction, Daelim Industrial, GS Engineering & Construction, Daewoo Engineering & Construction, Hyundai Engineering, and Lotte Construction are fiercely competing for the Banpo 1 3rd District reconstruction project. Since the association has prohibited consortium bids, the competition for the contract is expected to be even more intense.
▲ Seoul Seocho-gu Banpo Jugong Complex 1 District 3 Construction Contractor Selection Bid Announcement (Provided by Cleanup System)
The association has established various measures for a 'clean competition' during this bidding process. This is to preemptively block overheated competition among construction companies that has recently occurred in maintenance projects. For example, the redevelopment of Hannam 3 District in Yongsan-gu saw overheated competition among Hyundai Engineering & Construction, Daelim Industrial, and GS Engineering & Construction, which eventually led to a re-bidding process. Some association members even filed complaints with the prosecution, alleging that GS Engineering & Construction promotional staff offered money and entertainment.
The association has made it mandatory to submit a compliance pledge for construction company promotional activity guidelines and decided to operate a clean reporting center to monitor violations of illegal activities. The association prohibits ▲individual member promotions ▲false or exaggerated promotions and mutual defamation, dissemination of false information ▲fraudulent acts, among others. If these rules are violated, sanctions such as invalidation of bids, disqualification from selection, and forfeiture of the bid deposit (1 billion KRW) to the association can be imposed. Additionally, it is specified that even being indicted for illegal acts related to project progress can result in forfeiture of the bid deposit and loss of construction company status.
Furthermore, if an illegal act is reported and confirmed to be true, the reporting association member will be rewarded according to relevant laws. Currently, the Seoul Metropolitan Government's 'Urban and Residential Environment Maintenance Ordinance' allows for a reward of up to 200 million KRW for reporting acts such as bribery and entertainment.
An industry insider commented, "Even in Hannam 3 District, the overheated bidding has caused significant delays in the project," and analyzed, "It seems the association intends to lead clean competition to accelerate the project's progress."
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