Dunchon Jugong, Dramatic Agreement Between Union and Construction Team... Final Decision to Be Made at Union General Meeting

Signed Final Agreement for Resumption of Construction
Project to Proceed Only if Agreement Passes at October General Meeting

On the 11th, the Dunchon Jugong Reconstruction Association Normalization Committee and the construction business group in Gangdong-gu, Seoul, signed the final agreement to resume construction. Now, if the agreement passes at the association's general meeting, the project is expected to resume. Photo by Moon Honam munonam@

[Asia Economy Reporter Cha Wanyong] The Dunchon Jugong Reconstruction Project Normalization Committee (Sajeongwi) in Gangdong-gu, Seoul, and the Construction Consortium (Construction Dan) have agreed to resume construction. If the association, which is currently in conflict over several key issues, can gather opinions through a general meeting, the project is expected to restart.

On the 11th, according to Sajeongwi and the Construction Dan (Hyundai Engineering & Construction, HDC Hyundai Development Company, Daewoo Engineering & Construction, Lotte Engineering & Construction), both parties signed the final agreement for resuming construction at the Dunchon Jugong Reconstruction Association office at 5 p.m.

The agreement includes eight of the nine key issues prepared by the Seoul Metropolitan Government: ▲withdrawal of lawsuits for resuming construction ▲re-verification of the increased existing construction costs ▲review of sale prices ▲general and association member sales ▲design and contract changes ▲verification ▲resolution at the general meeting ▲effectiveness of the agreement and responsibility in case of violation.

The issue related to the 'commercial dispute' was partially revised by specifying the wording of the clause based on Seoul City's mediation proposal.

Sajeongwi plans to hold a general meeting in October to appoint a new executive team and resume construction. They intend to pass the agreement at this meeting. To this end, they plan to consolidate the association’s opinions on some conflict issues, such as improving transparency in committee meetings and elevator installation, which had caused internal conflicts.

A Sajeongwi official emphasized, “Learning from the current situation of massive damage, it is now necessary to unite the minds of the association members for the swift resumption of construction and move-in.”

The Construction Dan also expressed high expectations for the project’s restart. A Construction Dan official said, “Although the construction can officially resume only after passing the association’s general meeting, we trust the association members and will prepare for groundbreaking from now on to resume construction as soon as possible.”

Meanwhile, with this agreement, the loan period for the 700 billion KRW project financing, which matures on the 23rd, is expected to be extended by six months. Earlier, on the 4th, the association sent a letter requesting cooperation and extension of the loan period to the Construction Dan and the main lenders, and on the 9th, the Construction Dan requested the main lenders to extend the loan period by six months.