Announcement of Preferred Negotiation Partner for Private Contract After 2 Failed Bids
Construction Cost Remains 7.3 Million KRW per 3.3㎡ as Before
POSCO E&C Shows Strong Willingness to Secure the Order
Noryangjin 1 District is set to select a construction company through a private contract after two failed bids. Since the private contract bidding will proceed without changes to conditions such as construction costs, it is highly likely that POSCO E&C, the only bidder in the previous rounds, will participate alone again.
View of the Noryangjin redevelopment site in Seoul from the 63 Building observatory. Photo by Hyunmin Kim kimhyun81@
According to industry sources on the 19th, the Noryangjin 1 District association announced on the 15th the selection of a preferred negotiation partner for the private contract and stated that bidding will take place on the 22nd. Previously, two announcements for construction company selection were made but failed, making a private contract possible.
The construction cost for Noryangjin 1 District is 7.3 million KRW per 3.3㎡, the same as the previous bidding conditions. The total construction cost is 1.0926 trillion KRW. The Noryangjin 1 District redevelopment project involves building 2,992 households in 28 buildings ranging from 4 basement floors to 33 above-ground floors in the area of 278-2, Noryangjin-dong, Dongjak-gu, Seoul. Although it is the last district in Noryangjin New Town to select a construction company, the response from construction firms has been cold.
The Noryangjin 1 District association specified that only companies that attended the site briefing held in December last year and received the construction company selection plan are eligible to participate in the bidding. The six construction companies that attended at that time were Samsung C&T, GS Engineering & Construction, POSCO E&C, Kumho Construction, Hoban Construction, and Hyosung Heavy Industries. No company participated in the first bidding in November last year, and only POSCO E&C submitted a bid alone in the second bidding last month, which failed.
POSCO E&C has expressed its intention to participate in this private contract bidding as well. A POSCO E&C official said, "We plan to bid under the same conditions as before and will participate with the best proposal and wait for the results."
Samsung C&T and GS Engineering & Construction either have no plans to participate or are reviewing their participation. A Samsung C&T official explained, "We received an official letter from the association last Friday asking about our intention to participate, but it is difficult to participate under the existing conditions. We plan to respond to the association that we will participate if the project conditions change." A GS Engineering & Construction official said, "We are reviewing whether to participate."
There was also a difference of opinion between the association and Dongjak District Office regarding the construction cost for Noryangjin 1 District. Dongjak District Office proposed receiving advice or verification related to construction costs according to the 'Seoul City Public Support Maintenance Project Construction Company Selection Criteria,' but the association did not accept it.
A Dongjak District Office official explained, "The verification of construction costs, which was previously a discretionary regulation, has recently become mandatory. Although Noryangjin 1 District is not subject to this as the bidding was conducted before the revision, we recommended verification to prevent future disputes. However, the association stated that they would not undergo verification due to time and cost reasons, so we decided to proceed according to the association's opinion."
Another obstacle is that members of the Noryangjin 1 District association filed a provisional injunction lawsuit to invalidate the association leader election results held in January. Last month, Dongjak District Office requested the association to reconsider the private contract selection of the construction company until the court's ruling is issued.
In response, a Noryangjin 1 District association official said, "Since the private contract cannot change the construction cost, we announced the bidding under the same conditions as before. We need to observe the status of construction company participation until the 22nd. The lawsuit result has not yet come out, and we plan to proceed with the construction company selection as scheduled, following the district office's opinion that the procedure can continue."
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