Sindap Geukdong, Construction Cost Conflict Resolved
Construction Expected to Start After Consultation with Store Owners
A view of Sindap Geukdong Apartment in Dapsimni-dong, Dongdaemun-gu, Seoul. (Provided by Ssangyong Construction)
Among the remodeling complexes in Seoul, the Sindap Geukdong Apartment in Dongdaemun-gu, known as an 'ultra-speed' project due to its fast progress, will break ground in the second half of this year. After resolving the construction cost dispute with the contractor, the remaining procedures, such as negotiations with the commercial building owners, are being finalized before starting construction.
According to industry sources on the 27th, Sindap Geukdong in Dapsimni-dong, Dongdaemun-gu, Seoul, completed negotiations to increase construction costs at the end of last year and is currently preparing for groundbreaking.
A union official stated, "If things go well, we plan to obtain the construction commencement report (construction start permit) by the end of the first half of this year," adding, "After obtaining demolition permits and completing internal demolition, we expect to begin full-scale construction in the second half of the year." Once all construction documents, including the construction guarantee certificate, are submitted to the Dongdaemun District Office, the construction start permit can be obtained about a week later. After the installation of fences, full-scale construction (actual groundbreaking) will commence. The union is promoting a horizontal expansion remodeling project, increasing from a building with 1 basement floor to 15 floors above ground, totaling 225 households, to a building with 3 basement floors to 17 floors above ground, totaling 254 households.
This complex is known for its rapid project progress among remodeling complexes in Seoul. The union was established in 2019, the project plan was approved in 2021, and relocation was completed by the end of 2022, taking only three years.
The remodeling project, which was progressing smoothly, stalled due to a dispute over construction costs with the contractor. Ssangyong Construction, the contractor, demanded an increase in construction costs citing rising prices of building materials, but the union rejected this. The originally contracted construction cost was 6.6 million KRW per 3.3㎡, but Ssangyong Construction demanded 8.7 million KRW, an increase of over 30%. Unable to reach an agreement, the union even considered replacing the contractor. However, since they could not find a contractor at the price the union wanted, they ultimately agreed to increase the cost to 8.4 million KRW per 3.3㎡ at the end of last year.
A union official said, "At that time, all construction costs were fluctuating between 7 million and 9 million KRW per pyeong," adding, "Since relocation was already completed, considering additional costs, we judged that it was better to quickly reach an agreement and start the project."
Having overcome major issues, the project, which was delayed for nearly a year, can now resume. The union plans to speed up the project by resolving remaining tasks such as negotiations with commercial building owners. Currently, the union is coordinating compensation plans for noise and other impacts caused by the remodeling construction. They are also organizing additional permits and approvals that arose due to strengthened remodeling policies. Changes in the contractor’s management, personnel gaps, and personnel transfers of permit officials are also cited as reasons why construction could not start immediately.
A union official said, "In the past, contractors would open the site within one or two months after agreement, but nowadays, the atmosphere is to handle all risks before starting," adding, "Most issues are being resolved, and once finalized, construction will begin immediately."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
