Gyeongnam Administrative Appeals Commission Dismisses Consortium Company's Claim
A decision has been made that there is 'no problem' with the cancellation of the designation of the preferred negotiation partner for the 5th public offering of the Masan Marine New Town Private Complex Development Project, which was issued by Changwon Special City in Gyeongnam.
On the 17th, Changwon City announced that the administrative appeal filed by a member company of the HDC Hyundai Development Company consortium, which was the preferred negotiation partner for the 5th public offering, to cancel the cancellation of the designation of the preferred negotiation partner, had been dismissed.
According to Changwon City, Hubex P&D, a member company of the consortium, filed an administrative appeal, claiming that Changwon City had abused its discretionary power to cancel the selection of the preferred negotiation partner despite having no reason to do so.
On May 30, the Gyeongnam Administrative Appeals Commission stated, "Changwon City canceled the designation of the preferred negotiation partner based on relevant laws and the public offering guidelines, so there is no problem with the administrative procedure," and dismissed the appeal.
The Masan Marine New Town development project is a project to attract private investment to build apartments, tourism and cultural complex facilities, and commercial facilities on an artificial island created by reclaiming Masan Bay with soil from the construction of Gapo New Port.
Changwon City held public offerings for private operators from August 2015 to 2021, but no operator was selected.
On May 31, 2021, the Hyundai Development Company consortium was designated as the preferred negotiation partner in the 5th public offering, but even after 13 rounds of negotiations until November last year, the two sides could not narrow their differences on key issues.
The two sides reached agreements on public contributions, regional coexistence measures, and the creation of a symbolic landmark building through an international competition, but reportedly remained at odds over changing the use of residential accommodation facilities.
The company reportedly requested that the implementation agreement specify the possibility of changing to officetels, fearing that it would become difficult to sell the 1,280 residential accommodation units in the business plan due to amendments to the Building Act and other relevant laws.
The city is understood to have maintained the position that it could not accept this request, as the laws had already been amended or were in the process of being announced when the business plan was submitted, and specifying the change of use for the main facility of residential accommodation in the agreement could be seen as a special favor.
When the differences were not resolved even in the final negotiations, Changwon City concluded that further negotiations were meaningless and, after a hearing process, canceled the designation of the preferred negotiation partner in March this year.
In response, Hubex P&D, a member of the consortium, filed both an administrative lawsuit and an administrative appeal against Changwon City's administrative action. The administrative appeal was dismissed, and the administrative lawsuit is currently ongoing.
Kim Jongpil, Director of the Marine, Port and Fisheries Bureau, said, "Based on the result of the administrative appeal, we will actively respond with our legal representatives to the administrative lawsuit filed by the consortium member and strive to win the case."
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