Love Call to Samsung C&T for Sinwol-gok 1 District
Movement for Replacement Centered on Union Members
"We have not yet signed the main contract, and since the project has not properly progressed, we plan to switch to Samsung C&T this time." (A representative of the Hannam 2 District redevelopment association)
As Samsung C&T, which had been passive in the housing business, officially announced its expansion into the housing sector, the redevelopment industry is buzzing. Not only new redevelopment sites in Seoul’s Gangnam, Seongsu, and Yeouido areas but also complexes that have already selected construction companies are sending love calls to Samsung C&T.
According to the industry on the 28th, some complexes that have selected construction companies (preliminary construction contracts) are reportedly requesting Samsung C&T to participate if the construction company is reselected.
This phenomenon emerged amid intensified conflicts between construction companies and associations over fulfilling contract conditions made at the time of selecting the construction company, and while considering replacing the construction company, Samsung C&T announced its expansion into the housing business.
The most representative case is Hannam 2 District in Yongsan-gu. Hannam 2 District selected Daewoo Engineering & Construction as the construction company in November last year. At that time, Daewoo E&C promised to lift the height restriction to 118 meters and build up to 21 floors, but due to Seoul City’s policy not to ease height restrictions, achieving 118 meters became difficult, leading to conflicts with the redevelopment association.
Accordingly, the association’s board decided to submit a proposal to revoke Daewoo E&C’s construction company status at the delegates’ meeting on the 1st of next month. Subsequently, a general meeting will be held on the 17th of the same month to conduct a vote among association members.
At the same time, it has been confirmed that the Hannam 2 District redevelopment association officially requested Samsung C&T to participate if the construction company is reselected.
A representative of the Hannam 2 District redevelopment association said, "Samsung C&T also requested to participate during the construction company selection last year, but as the bidding competition intensified, Samsung C&T did not enter. Most association members still want Raemian, and since the selected construction company did not keep the contract, we requested Samsung C&T to attend if the construction company is reselected."
The Sinwol-gok 1 District Urban Environment Maintenance Project Association in Seongbuk-gu, Seoul, also recently met with Samsung C&T and reportedly requested their participation if the construction company is reselected. This project selected Lotte Engineering & Construction as the construction company in December last year and aimed for relocation in the first half of this year, but conflicts arose between the construction company and the association due to difficulties in securing relocation funds and project financing.
In addition, GS Engineering & Construction, which recently faced a scandal involving missing rebar in the underground parking lot of Geomdan Apartments, has also been facing demands for construction company replacement from some association members at sites such as Hangang Mansion in Yongsan-gu and Sangye Jugong 5 Complex in Nowon-gu. Most association members who want replacement are looking toward Samsung C&T.
Meanwhile, even some association members at sites that have signed the main contract and are progressing with relocation and other project stages have expressed a desire to reselect Samsung C&T as the construction company. One such site is Galhyeon 1 District in Eunpyeong-gu, with a project cost reaching 1 trillion won. The association signed a contract with Lotte E&C in 2020, but issues such as project financing and increased financial costs have led to strong opposition from association members. Recently, legal disputes have also arisen between the association head and members.
Cases like Galhyeon 1 District, where the main contract has been signed, are difficult because legal battles must be fought, but some association members are willing to endure this.
Previously, in the case of Sinbanpo 15th Complex in Seocho-gu (Raemian One Pentas), the construction company was replaced during construction (Daewoo E&C → Samsung C&T) in 2019 due to demands for increased construction costs related to specialized design. In Bangbae 5 District, the construction company was replaced with Hyundai Engineering & Construction despite having signed the main contract with L·P·G (Lotte E&C, POSCO E&C, GS Engineering & Construction).
A Samsung C&T representative said, "It is true that many complexes wanting to replace their construction companies are requesting Samsung C&T to participate if the construction company is reselected, but we must carefully select projects considering the company’s manpower and business feasibility. As we have decided to expand our housing business, we will keep broader possibilities open and carefully review projects going forward."
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