Korea Land and Housing Corporation (LH) and Hyundai Construction have denied allegations of collusion in the ‘Wirye New Town Bokjeong Station Area Complex Development Project (Bokjeong Station Area Project)’ that were raised by some parties.
On the 16th, LH issued a clarification stating, “The public offering for private developers of the Wirye Bokjeong Station Area Complex Development Project was conducted fairly and transparently,” and explained, “Due to funding shortages caused by the real estate market downturn, most of the 56 entities that submitted letters of intent were unable to participate in the bidding.”
Location map of the complex development project site near Bokjeong Station in Wirye New Town. [Data provided by LH]
LH also argued that the project is being pursued as an integrated development under government policy and agreements with related local governments, making collusion impossible.
Regarding criticisms that the participation conditions favored certain companies, LH emphasized, “The Bokjeong Station Area Complex Development Project is a large-scale project with a total budget of 10 trillion KRW (with land costs of 3.2 trillion KRW), and to ensure project stability, participation by construction companies with high credit ratings and excellent construction capabilities is essential.”
The Hyundai Construction consortium, selected as the project operator, also refuted the allegations, stating, “This is a project fairly bid according to the bidding guidelines,” and “The prior collusion suspicions are unfounded.”
Regarding the Fair Trade Commission’s investigation conducted last week, Hyundai Construction said, “The investigation was initiated due to persistent allegations by a specific politician,” and added, “There was no preferential treatment or collusion, so there is absolutely no issue.”
They further noted, “Due to the real estate market downturn, all construction companies are facing difficulties, and most companies declined to participate in this project.”
Meanwhile, the Bokjeong Station Area Complex Development Project is a large-scale project to develop the area near Bokjeong Station (Line 8 and Suin-Bundang Line) on the east side of Wirye New Town into office and commercial facilities, with a total floor area of approximately 1 million square meters. Although 56 companies, including construction and financial firms, submitted letters of intent to LH, only the Hyundai Construction consortium (Hyundai Construction, HDC Hyundai Development Company, Koramco Asset Trust, Korea Investment & Securities) formally bid.
In response, at the National Assembly’s Political Affairs Committee audit, Rep. Kang Min-guk of the People Power Party raised suspicions of collusion, and last week the Fair Trade Commission’s Cartel Investigation Division reportedly conducted an on-site investigation of Hyundai Construction.
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