Noryangjin 1 District Construction Company Re-selection 추진 "6 Companies to Propose"

Construction Company Selection Failed Twice... POSCO Submitted Sole Bid
Official Letters to Be Sent to 6 Companies That Attended Site Briefing
Noryangjin1 Normalization Committee Sent Participation Letter to Samsung First

Noryangjin 1 District, the last redevelopment site in the Noryangjin New Town project to select a construction company, is ultimately moving forward with reselecting the contractor. Although POSCO E&C was the sole bidder for this project, the decision is analyzed as an effort to increase options for the union members.

View of the Noryangjin redevelopment site in Seoul from the 63 Building observatory. Photo by Hyunmin Kim kimhyun81@

According to the Noryangjin 1 Redevelopment Promotion District Union on the 23rd, the union plans to send official letters requesting participation in the contractor selection to six companies?Samsung C&T, GS Engineering & Construction, POSCO E&C, Kumho Construction, Hoban Construction, and Hyosung Heavy Industries?after passing through the delegates' meeting. Prior to this, the emergency committee, Noryangjin 1 Normalization Committee, sent a letter proposing Samsung C&T to participate in the bidding.

A representative of the Noryangjin 1 District union stated, "We plan to send bidding participation letters to the six construction companies, including Samsung C&T, who attended the site briefing," adding, "The schedule for re-announcement has not been finalized."

The emergency committee acted before the union. On the 21st, the Noryangjin 1 District Normalization Committee delivered an official letter to Samsung C&T requesting their participation as the contractor. The letter also included a proposal to increase the construction cost to the 8 million KRW range per 3.3㎡.

Regarding this, a Samsung C&T official said, "Since this is not an official request from the union, it is difficult to provide a specific response," but added, "If an official participation request comes from the union in the future and it meets the conditions we consider for the project, we will consider participating in the bidding."

The union considered submitting only Samsung C&T and POSCO E&C to the contractor selection general meeting but decided to offer bidding opportunities to six companies, judging that giving the chance to only specific construction companies could violate the law.

The contractor selection for Noryangjin 1 District has failed twice. The union insisted on proposing a construction cost of 7.3 million KRW per 3.3㎡, leading most construction companies to withdraw from bidding. During the first bidding in November last year, no construction company participated, and in the second bidding held on February 13, only POSCO E&C participated alone. According to the Urban and Residential Environment Improvement Act, when a general competitive bidding for contractor selection in redevelopment projects has no bidders or only a single bidder, it is considered a failed bid. If the bid fails twice or more, a private contract is possible. POSCO E&C, which was the sole bidder, became the preferred negotiation partner. POSCO E&C proposed the high-end brand 'Otier' for Noryangjin 1 District.

Regarding this, a construction industry insider said, "Noryangjin 1 District has a large number of union members and has been touted as the biggest redevelopment project in Noryangjin New Town, but due to construction cost issues, construction companies showed little interest," adding, "With only POSCO E&C bidding, the union was in a difficult position, but it seems POSCO also gave the union time to build justification."

Noryangjin 1 District is a project to build 2,992 households in 28 buildings ranging from four basement floors to 33 above-ground floors on a 132,132㎡ site in Noryangjin-dong, Dongjak-gu. The number of union members reaches 1,019. The area was first designated as a redevelopment zone in 2009, but the union was established in 2017, and the redevelopment zone designation was made in 2020. The project received implementation approval in March last year and is currently undergoing relocation. The Noryangjin 1 District union is considering increasing the building height to a maximum of 49 floors before receiving management disposition approval and increasing the number of medium-to-large units, changing the total number of households to 2,870. The union plans to offer units to members within this year and receive management disposition approval next year.