Samsung, SK, and HDC to Receive 9.6 Billion KRW Additional Construction Cost for Gunjang Bridge

Victory in Lawsuit for Extension of Air Conditioning Construction Payment

Dongbaek Bridge connecting Gunsan, Jeonbuk and Janghang, Chungnam

[Asia Economy Reporter Seongpil Cho] Leading domestic construction companies such as Samsung C&T, SK Engineering & Construction, and HDC Hyundai Development Company filed a lawsuit over the payment settlement for the national project GunJang (Dongbaek) Bridge construction connecting Gunsan and Janghang, and won the case.

According to the legal community on the 22nd, the Civil Division 27 of the Seoul Central District Court (Presiding Judge Woojung Kim) ruled partially in favor of the plaintiffs in the lawsuit filed by Samsung C&T and others against the government regarding the construction payment. The court ordered, "The government must pay approximately 9.6214 billion KRW to Samsung C&T and other construction companies involved in the project."

Previously, Samsung C&T and others formed a joint consortium and undertook the construction of the GunJang Bridge commissioned by the Iksan Regional Land Management Office under the Ministry of Construction and Transportation. Construction began in September 2008. This project, which involved building a marine road connecting Gunsan in Jeonbuk and Seocheon in Chungnam, was originally scheduled for completion in October 2013. However, due to budget allocation delays and the postponement of relocating underground power transmission lines, the construction period was extended by five years, finally concluding in December 2018. Samsung C&T and the government entered negotiations over the additional construction costs incurred due to the extension but ultimately failed to reach an agreement. Samsung C&T and others demanded 15.3 billion KRW for the additional costs, while the government argued that the amount should be reduced. Consequently, Samsung C&T and others filed a lawsuit in January 2019.

The court found that Samsung C&T and other construction companies were not responsible for the extension of the construction period and judged that it was reasonable for the government to pay the additional construction costs. The government argued that the construction companies' lack of schedule management partially contributed to the delay in budget allocation, which caused the extension, but the court rejected this, stating, "The responsibility for budget procurement lies with the ordering party, the government."

However, the court calculated the additional construction costs at 13.7 billion KRW, less than the 15.3 billion KRW claimed by Samsung C&T and others. It considered the delay caused by the relocation of underground power transmission lines as a factor likely recognized by both parties before the contract was signed and took this into account as a reason for reduction. Furthermore, the court stated, "It is difficult to place full responsibility for the delay of the GunJang Bridge construction on the government," and ruled that "it is reasonable to reduce the calculated construction costs by 30%."