Seoul City Council Democratic Party Urges Full Review of Hangang Bus Project... Joo Yong-tae, Head of Seoul Future Hangang Headquarters, Briefs at City Hall on 30th, Explaining Contract with Gadeok Heavy Industries Established Last December 22 and Its Experienced Team
Suspicions surrounding the Hangang Bus are escalating. Among the total of eight Hangang Buses, company A, which secured contracts for six vessels, has been revealed to be a newly established company with no prior experience in building even a single ship at the time of the contract. The manufacturing contract was signed in March of this year, but the company’s incorporation date is April. Checking the four major social insurance enrollment records shows that employees were only hired in April.
An external shipbuilding engineer stated after an on-site inspection that finalizing the design drawings is urgent and early acquisition of welding machines is also necessary. If this is true, it is truly astonishing that the Seoul Metropolitan Government signed a massive contract worth 17.8 billion KRW with a one-person company that has no track record, no employees, not even the most basic welding machines, and is not even legally incorporated (registered).
The Democratic Party of Korea in the Seoul Metropolitan Council (Representative Assemblyman Seong Heumje) strongly urges the immediate suspension and comprehensive reexamination of the Hangang Bus project, which is increasing citizens’ concerns and anxieties due to the selection of unverified companies.
Recently, Seoul City announced that the operation of the Hangang Bus, originally scheduled for October this year, will be postponed to March next year due to “delays in the battery module testing schedule for the vessels and design changes to the dock causing process delays.” Just three months ago, Seoul City confidently claimed that the 150-ton Hangang Bus could be manufactured and officially operated within just six months.
According to data from the Fire and Disaster Headquarters, it takes one year and six months to build a 50-ton fireboat operating on the Hangang River. The ‘Hangang Bus’ (River Bus), which Mayor Oh Se-hoon is pushing as a key project, is 150 tons, three times the size of a fireboat. It is the first eco-friendly hybrid vessel introduced in Korea. In terms of size and technology, it is incomparable to a fireboat. It may have been impossible from the start for a small company with no shipbuilding experience to complete construction within six months. In fact, among the 45 companies interested in producing the Hangang Bus, 43 gave up on producing six vessels by October.
The problem does not end here. According to the ‘River Bus Project Financial Analysis’ requested by the Democratic Party of Korea in the Seoul Metropolitan Council, Seoul City has been heavily promoting in the media that, contrary to the initial estimate of a deficit of 8.09 billion KRW by 2029, a surplus will occur from 2027 by exceeding legal standards for ship inspection periods, arbitrarily adjusting ship service life, inflating ship sale revenues, reducing the amount and unit price of diesel fuel per trip, and increasing expected advertising revenue.
Large-scale environmental destruction, financial waste, various preferential treatment controversies, and irregularities surrounding the Hangang Bus project are not new issues. In particular, as the Seoul Housing and Communities Corporation (SH), which has nothing to do with the Hangang Bus, is bearing 51% of the total project cost, there have been continuous criticisms that SH is being reduced to a risk hedge tool for private companies, along with concerns about the lack of alternative functionality as a transportation means.
Regarding the suspicion that company A Heavy Industries, which has no shipbuilding record, no employees, and no factory, was selected as the contractor, Seoul City explained that “since the establishment of Gadeok Heavy Industries, contracts have been confirmed for two tugboats (March 2024) and two environmental clean vessels (April 2024) besides the Hangang Bus.” However, these are contract dates, not construction achievements. Since the contract date for the two environmental clean vessels is after the Hangang Bus contract, this cannot be a valid reason for selecting the company.
In response to the issue raised in the supervision report that the delay in progress might be due to the company’s lack of self-production capability, the city stated that “resident supervision has been deployed to manage progress and quality to resolve the issues pointed out at the time.” The company should have been verified and selected from the start. The explanation that efforts are being made afterward to resolve problems after recklessly selecting the company is nothing but a confession of having chosen a problematic company.
Despite SH bearing 51% of the project cost as a joint investor, citizens should not be deceived by the lame excuse that “the Hangang Bus contractor is eCruise Co., Ltd.” Mayor Oh Se-hoon and Seoul City are expected to clarify all controversies and suspicions through a fair and objective full investigation. The Democratic Party of Korea in the Seoul Metropolitan Council once again strongly urges Mayor Oh Se-hoon to immediately halt the Hangang Bus project, which is causing controversies and suspicions due to its hasty promotion.
In response to such criticism, Joo Yong-tae, head of the Seoul Metropolitan Government’s Future Hangang Headquarters, held a brief briefing at City Hall on the 30th and explained, “Regarding the criticism that the contract for building six Hangang Buses was signed with Gadeok Heavy Industries, established on December 22 last year, the company’s CEO was previously the CEO of the ship-specialized company KOSERI, and five professional personnel have moved to Gadeok Heavy Industries.”
He stated that the executives, including the CEO of Gadeok Heavy Industries, and technical advisors are ship experts who have worked at Daewoo Shipbuilding & Marine Engineering, and the company has 11 full-time employees.
He also explained that besides the Hangang Bus, contracts were signed for building two tugboats and two environmental clean vessels in March and April.
The city initially entrusted Eunsung Heavy Industries with building eight vessels, but since that company could only deliver two vessels by the deadline, the contract was signed with Gadeok Heavy Industries, which offered a lower price among two companies that promised delivery by the end of September.
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