Jamsil Jinju Construction Cost Confirmed at 8.115 Million KRW per 3.3㎡
Cheongdam Samik to Vote at August End General Meeting
Haengdang 7 District Also Agrees at 6.18 Million KRW per 3.3㎡
The Seoul Metropolitan Government dispatched conflict mediation coordinators to redevelopment and reconstruction project sites, including Jamsil Jinju and Cheongdam Samik, where disputes over construction costs had arisen, and successfully facilitated agreements through mediation.
On the 17th, Seoul City announced that agreements on construction costs had been reached at three project sites where conflicts had emerged: Jamsil Jinju, Daejo 1 District, and Cheongdam Samik Apartments.
At the Jamsil Jinju Apartments, the construction cost was finalized at 8.115 million KRW per 3.3㎡ during the general assembly on the 16th. The remaining schedule will proceed with the goal of launching sales in October.
Earlier this year, the contractors Samsung C&T and HDC Hyundai Development Company requested an increase in construction costs from 6.66 million KRW to 8.89 million KRW per 3.3㎡, citing reasons such as design changes, upgraded finishing materials, inflation, and financial costs. Subsequently, negotiations related to construction costs were delayed, including the rejection of a proposal to amend the construction contract at the general assembly.
Seoul City received documentation from the association and contractors regarding the requested cost increase and proposed a mediation plan based on the construction contract, resulting in an agreement. The city’s coordinators, along with the district office, association, and contractors, held six mediation meetings.
The Jamsil Jinju Reconstruction Association stated, “After the rejection of the cost increase at the general assembly, it was difficult to find a consensus on the cost increase and extension of the construction period with the contractor. However, through the active mediation by the coordinator dispatched by Seoul City, adjustments to the construction period and reduction of delay interest were made, reflecting the voices of the association members, which allowed the agenda to be approved at the general assembly.”
Cheongdam Samik, whose contractor Lotte Construction even displayed a 'Construction Stop Notice' banner, also reached an agreement. Following approval at the general assembly at the end of August, general sales will commence. The city dispatched coordinators to Cheongdam Samik, where the city, district office, association, and contractor held three mediation meetings. On the 8th, they adjusted construction costs, financial costs, and construction period to prepare an agreement.
Construction at Daejo 1 District, which had been halted since January due to internal association conflicts and unpaid construction costs, resumed on the 12th of last month after the formation of a new executive committee. Through five meetings among stakeholders including association members and contractors, consensus was reached on the formation of the new executive committee, and consulting and mediation necessary for normalizing the association, such as general assemblies and election management, were conducted.
Haengdang 7 District was selected as a pilot site for SH Corporation’s construction cost verification project and is an example where an agreement was reached between the association and contractor. The contractor, Daewoo Engineering & Construction, had requested an increase in construction costs from 5.43 million KRW to 6.32 million KRW per 3.3㎡, causing conflict. SH Corporation proposed an objective calculation method to resolve the conflict, and on the 25th of last month, a revised contract was signed to increase the construction cost to 6.18 million KRW per 3.3㎡, a figure acceptable to both parties.
The coordinators for maintenance projects consist of experts in urban administration, urban maintenance, law, taxation, and accounting. When disputes arise in maintenance projects, they form consultative bodies with the city, district offices, and conflicting parties to listen to opinions, analyze causes of conflict, and propose mediation plans to resolve disputes. Currently, coordinators are dispatched to six maintenance project sites: Daejo 1 District, Jamsil Jinju Apartments, Banghwa 6 District, Cheongdam Samik Apartments, Mia 3 District, and Anam 2 District.
Han Byung-yong, Director of the Housing Office at Seoul City, said, “Recently, rapid increases in construction cost indices and interest rate hikes have caused conflicts such as construction cost increases and construction stoppages at many maintenance project sites. We will actively engage in mediation and adjustment to prevent delays and damages to association members by identifying the causes of construction cost conflicts in advance through continuous monitoring and on-site investigations.”
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