Samsung C&T is drawing attention as it repeatedly submits sole bids and experiences failed auctions in the selection of construction companies for maintenance projects, aiming to build a track record through private contracts.
Perspective view of the reconstruction of Jugong Complex 10 in Gwacheon-si, Gyeonggi Province / Image provided by Gwacheon-si
According to the maintenance industry on the 23rd, Samsung C&T was recently selected as the preferred negotiation partner for the construction company in the reconstruction project of Jugong Complex 10 in Gwacheon, Gyeonggi Province. The final contract award will be decided at the general meeting of association members scheduled for next month.
Jugong Complex 10 in Gwacheon, which is in its 40th year since completion, is the last reconstruction complex in the area and consists of 632 households with exclusive areas ranging from 84 to 125㎡. It is evaluated to have high business feasibility due to its low floor area ratio of 86%. Through reconstruction, it is expected to be transformed into a complex with 1,339 households, ranging from two basement floors to 28 floors above ground.
Although fierce bidding competition was initially expected due to the high business feasibility, the reality was a solo stage for Samsung C&T. In the first bidding, Lotte Construction, which was expected to compete, did not attend the site briefing, leaving Samsung C&T as the sole participant. In the subsequent rebidding site briefing, five construction companies attended, but ultimately only Samsung C&T qualified to bid. Samsung C&T was the only company to submit the bid deposit of 20 billion KRW on time, as required by the association.
Accordingly, the association is proceeding with related procedures with Samsung C&T based on the regulation that "if the auction fails two or more times due to reasons such as no bids, a private contract can be made according to relevant laws."
The selection of the construction company for the remodeling project of Jamwon Riverside Apartments in Seocho-gu, Seoul, is showing a similar trend to Jugong Complex 10 in Gwacheon. Samsung C&T attended the site briefings held on the 7th and 17th of this month alone, resulting in two failed auctions, and the association switched the selection method from competitive bidding to private contract. Samsung C&T also met the bid qualification requirements set by the association, including paying a bid deposit of 1 billion KRW in cash by the day before the site briefing.
Jamwon Riverside Apartments, completed in 1987, consists of four buildings with a maximum of 15 floors and 360 households. Due to a high floor area ratio of 243%, a remodeling project rather than reconstruction is being pursued, and it is expected to be transformed into 389 households ranging from four basement floors to 20 floors above ground. A Samsung C&T official said, "We will go through the process of selecting the preferred negotiation partner next month" and added, "We will strive to secure the final contract."
Meanwhile, Samsung C&T did not participate in the bidding for the redevelopment project of Noryangjin New Town Zone 1 in Dongjak-gu, which closed on the 20th, but is reconsidering participation in the rebidding. This project was expected to be a contest between Samsung C&T and GS Engineering & Construction, but it is reported that the low construction costs amid the real estate market downturn became a stumbling block.
However, GS Engineering & Construction receiving two warnings from the association for violating promotional regulations is expected to be a variable that makes their bidding uncertain. If three warnings are issued, the bid deposit may be forfeited, making it difficult for GS Engineering & Construction to proceed rashly. GS Engineering & Construction stated that they were not given an opportunity to explain against the unfair warnings and expressed willingness to reconsider bidding if the association cancels the warnings.
The association plans to announce a rebidding notice for the selection of the construction company next month. If the next selection also ends in failure, the association will proceed with a private contract. In this case, the association plans to hold a vote at the general meeting to select the construction company, with Samsung C&T, GS Engineering & Construction, and POSCO E&C?who have previously shown interest?as candidates.
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