Will Ulsan B-04 Redevelopment Contractor Be Decided as 'Samsung Hyundai Project Team'?

Consortium Designated as Preferred Negotiation Partner for Samsung-Hyundai Consortium
Bidding Expected in March, General Meeting Scheduled Around April-May

[Asia Economy Reporter Cha Wanyong] The redevelopment project of Ulsan Metropolitan City Jung-gu B-04 district (around 190-4 Gyodong) that had failed multiple times to select a construction company is once again challenging the selection process. This time, the bidding will proceed through a private contract. To this end, the union has requested participation in the project in a consortium format from Samsung C&T and Hyundai Engineering & Construction, and has completed the notification of the preferred negotiation candidate selection.

A panoramic view of the area around 190-4, Gyodong, Jung-gu, the Ulsan B04 redevelopment zone.

According to the Ulsan B04 redevelopment union and the urban maintenance industry on the 29th, the union switched the selection of the constructor to a private contract on the 5th and designated the Samsung C&T-Hyundai E&C consortium as the preferred negotiation candidate. The two companies, having received the notification as preferred negotiation candidates, have reportedly decided to name themselves the ‘Samsung Hyundai Project Team (tentative)’ and have begun full-scale bid preparations. According to the union’s schedule, the bidding is expected to take place in March, with the general meeting scheduled around April to May.

The Ulsan B04 redevelopment project was known as the ‘largest local redevelopment project’ until the first half of last year, attracting attention from the construction industry. However, since last year, factors such as the real estate market downturn and rising raw material costs have caused difficulties in selecting a construction company.

Attempts to select a constructor in August (1st bid), November (2nd bid), and December (3rd and 4th project briefings) of last year all failed. Although Samsung C&T and Hyundai E&C, ranked first and second in construction capability evaluation, showed considerable willingness, both companies refrained from bidding alone due to the large scale of the project and the challenging real estate market, bearing the burden of solo contracts.

In fact, the Ulsan B04 redevelopment project involves building 55 apartment buildings with 4,080 households (including 206 rental units). The expected project cost exceeds 2 trillion KRW, with anticipated construction costs of about 1.2 trillion KRW. Even the top two companies in the industry cannot help but feel the burden in the current real estate market.

Nevertheless, both construction companies have not withdrawn from the site and have been promoting to the union and its members by operating a promotional center. This is the background for the union designating the Samsung C&T-Hyundai E&C consortium as the preferred negotiation candidate.

Meanwhile, the Samsung Hyundai Project Team is expected to participate in the March bidding through detailed negotiations with the union regarding project conditions, share distribution between the two companies, lead company selection, brand order, and other specifics. If smooth agreements are reached during this process, the Ulsan B04 redevelopment project will be carried out by Samsung C&T and Hyundai Engineering & Construction, the top two construction companies in Korea.