Only Major Construction Companies in Seoul's Private Maintenance Project TF? "Concerns Over Sweeping Contract Wins"

The Seoul Metropolitan Government has confirmed that Samsung C&T, Hyundai Engineering & Construction, and GS Engineering & Construction have been included in the TF team established to prepare detailed guidelines for the ‘Advancement of Construction Contractor Selection Timing in Maintenance Projects,’ which will be implemented on July 1. Some construction companies have expressed regret that only these large firms with strong market dominance were included, while concerns are growing that the guidelines might be biased in favor of certain construction companies as meetings have been held privately.

Seoul City has formed a task force team to establish detailed guidelines for the 'Advancement of Construction Contractor Selection Timing in Maintenance Projects,' which will be implemented on July 1. The photo shows the area around 699 Ahyeon-dong, Mapo-gu, selected as a candidate site for Seoul City's public redevelopment. Photo by Mun Ho-nam munonam@

According to the Seoul Metropolitan Government and the construction industry on the 31st, Seoul formed the TF team in January to improve the system for the ‘Advancement of Construction Contractor Selection Timing in Maintenance Projects,’ which will take effect on July 1, and has been holding closed-door meetings and discussions since then.

The companies participating in the TF team were selected by Seoul from private firms representing different sectors such as contractors, maintenance project management specialists, designers, and construction managers (CM). Among them, Samsung C&T, Hyundai Engineering & Construction, and GS Engineering & Construction participated as contractors.

The main issues discussed included ▲whether to limit the scope of alternative design maintenance plans by contractors (minor cases) ▲review authorities for violations (district offices, Seoul city), penalty provisions ▲whether exceeding the estimated price is possible in case of errors in the union’s estimated price (such as quantity omissions) ▲problems arising when a contractor is selected with the consent of the majority of union members (not the majority of attendees at the general meeting), among others.

News of the TF team’s formation and discussions has sparked dissatisfaction among some construction companies, as they were unaware of the TF team’s existence. A representative from a construction company ranked within the top 10 in construction capability said, “I have never heard about the formation of the TF team, nor was I ever invited to attend. If it is a meeting to prepare sensitive guidelines such as changing the timing of contractor selection, it should have been conducted transparently or a representative construction company representing the industry should have been selected to participate.”

A representative from a mid-sized construction company said, “I’m not sure if the construction companies participating in the TF team can represent the industry. In fact, since large construction companies are sweeping up Seoul’s maintenance projects, listening only to the large companies seems to mean excluding mid-sized companies altogether,” expressing frustration.

In response, the Seoul Metropolitan Government explained, “While it would be ideal to include all companies to gather opinions, due to time constraints, we included three companies that can represent the construction industry in the TF team. There is absolutely no secretive process as some companies fear, and once the basic plan is drafted, we will reflect industry feedback through administrative notices and make improvements.”

Meanwhile, the construction industry anticipates that the advancement of the contractor selection timing in Seoul’s maintenance projects will further intensify the large construction companies’ monopolization of orders. Originally, design changes in reconstruction and redevelopment projects were mainly made during the architectural review conducted between the approval of the union establishment and the project implementation approval. However, if the contractor is selected early, and all designs are finalized, any design changes requested during the architectural review are likely to lead to additional construction cost increases. Consequently, it is expected that unions will prominently prefer large contractors with the financial capacity to accommodate design changes.