"Demanding 17.1 Billion KRW Over Construction Costs"... Ssangyong Construction Protests at KT Pangyo New Headquarters

On the 31st, about 30 employees from Ssangyong Construction and subcontractors held a rally in front of the new KT headquarters in Pangyo, appealing for an increase in construction costs reflecting the rise in prices.

On the 31st, employees of Ssangyong Construction and subcontractors held a protest in front of KT's new headquarters in Pangyo. [Photo by Ssangyong Construction]

Ssangyong Construction stated that since the signing of the subcontract agreement, various raw material prices have increased due to the COVID-19 pandemic, war, and other factors. Additionally, further adverse conditions such as delays in material delivery, labor union strikes, and suspension of reinforced concrete work have caused a significant rise in costs. They have requested an increase of 17.1 billion KRW (including VAT) in excess construction costs since July last year.

However, KT is reportedly refusing the request, citing the 'price fluctuation exclusion clause' in the subcontract agreement.

A representative from Ssangyong Construction said, "KT, as a large corporation client, is insisting on an 'unfair special clause' that disallows contract amount adjustments due to price increases and exchange rate fluctuations, causing damages to the contractor and subcontractors. Based on the Ministry of Land, Infrastructure and Transport’s guidelines on contract amount adjustments for private construction projects and the Framework Act on the Construction Industry, our demand for adjustment according to the 'Construction Cost Index' is justified."

Ssangyong Construction applied for mediation with the Ministry of Land, Infrastructure and Transport’s Construction Dispute Mediation Committee on the 30th. If the client shows no intention to negotiate after the first protest, they plan to continue with a second protest at the KT headquarters in Gwanghwamun.

Meanwhile, the 'KT New Headquarters' located in Pangyo Second Techno Valley is a building with 4 basement floors and 12 above-ground floors. In 2020, Ssangyong Construction won the sole contract at a final construction cost of 96.7 billion KRW after fierce competition with seven other construction companies following an invitation to bid from KT. After approximately 31 months of construction, the building was completed in April this year.