Maintaining Tower Height at 448m... LH to Proceed with Design Within the Year
[Asia Economy Reporter Park Hyesook] The construction project of Incheon Cheongna City Tower, which had been delayed due to cost increase issues between Korea Land and Housing Corporation (LH) and private developers, has found a new breakthrough.
The Incheon Free Economic Zone Authority announced on the 15th that it held the 'Cheongna City Tower Public-Private-Government TF Team 3rd Meeting' attended by Kim Jinyong, head of the Incheon Free Economic Zone Authority, and Park Dongseon, head of LH's Regional Balanced Development Headquarters, and reached a broad agreement on the construction and management plan of Cheongna City Tower.
At the meeting, the Incheon Free Economic Zone Authority explained that both organizations agreed that LH will be responsible for the construction of Cheongna City Tower, while the management and operation of the tower will be handled by the Incheon Free Economic Zone Authority.
Additionally, the height of Cheongna City Tower, 448m, which residents of Cheongna International City had long desired, will be maintained as is. This was proposed by the Incheon Free Economic Zone Authority and accepted by LH as the optimal project promotion plan discussed through the public-private-government TF meetings.
Although LH has not finalized detailed plans yet, it announced plans to proceed with the design within this year for rapid normalization. The Incheon Free Economic Zone Authority also decided to conduct management and operation of the tower and site activation services in the second half of this year in line with LH’s tower construction promotion.
Cheongna City Tower, the tallest observation tower in Korea, has been planned on a 33,000㎡ site in the center of the lake park in Cheongna International City, with 2 basement floors, 30 above-ground floors, and a height of 448m, but has faced difficulties.
The project implementer LH signed a business agreement in 2017 with Cheongna City Tower Co., Ltd., a special purpose company (SPC) composed of Hanyang, Boseong Industry, and Tower Escrow, and has been promoting the project.
However, LH and the SPC have been in conflict over the significantly increased construction cost sharing and the method of commencement compared to the original plan. The tower construction cost was set at 441 billion KRW in November 2021 but was increased to 560 billion KRW at the request of the construction company, POSCO Engineering & Construction.
LH demanded to sign a 'GMP contract' that sets an upper limit on construction costs and to start construction first, deciding the party responsible for the additional construction costs later, but the SPC delayed signing the construction contract, insisting that the party responsible for the increased project costs must be determined first.
Since November last year, LH sent three notices to the SPC warning of termination of the business agreement, but with no significant change in position, LH has decided to terminate the agreement.
An official from the Incheon Free Economic Zone Authority said, "The construction of Cheongna City Tower has gained momentum with a broad agreement reached just over two months after the TF was launched. We will shorten the time until completion and prepare thoroughly to prevent any setbacks in tower construction, including preparing for potential legal disputes between LH and the SPC."
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