Jamsil Woosung Unveils 'Pre-Promotion' Card... Bid Condition Relaxation as a Variable

Only GS Construction Participated in Last Bid, Resulting in Failure
Pre-Bid Promotion Opportunity Given to Contractors Before Briefing
Samsung C&T Likely to Participate if Bidding Conditions Are Relaxed

As the selection of the construction company for the Jamsil Woosung 1, 2, and 3 reconstruction project in Songpa-gu, Seoul, with a project cost reaching 1.6 trillion KRW, approaches, the association has introduced a 'pre-promotion' card. This strategy aims to encourage participation from construction companies after the previous bid failed with only GS Engineering & Construction participating. In particular, there is a high possibility of competitive bidding among interested construction companies such as Samsung C&T, as the association may relax the bidding conditions.

▲Jamsil Woosung Apartment exterior view.

The Jamsil Woosung Apartment Reconstruction Association announced on the 20th that it will accept draft leaflets from construction companies wishing to participate in the bid by the 25th, through a 'Notice on Promotion Before Construction Company Selection Bid Announcement.'

Any interested construction company can participate in the pre-promotion. An association official explained, "We want competitive bidding among association members, and since construction companies are preparing for re-bidding, we intend to proceed with this to allow companies to promote themselves."

Typically, explanatory meetings for association members are held after the construction company bidding takes place. However, the association decided to provide pre-promotion opportunities to encourage bids from major construction companies. At the on-site briefing held after the construction company recruitment announcement in September, nine construction companies including GS Engineering & Construction, Hyundai Engineering & Construction, Daewoo Engineering & Construction, and Lotte Engineering & Construction participated. However, only GS Engineering & Construction submitted a bid participation commitment letter, resulting in no competitive bidding and the bid being canceled.

The association also plans to change the bidding conditions before re-announcing the construction company selection. The association plans to announce the re-selection of the construction company around mid-next month after going through a delegates' meeting. The main bidding conditions in the announcement at the end of September included a bid deposit of 60 billion KRW and a prohibition on joint contracts. The project cost was approximately 1.6198 trillion KRW, with construction costs set at 8.8 million KRW per 3.3㎡. The association specified a 'responsible completion commitment' in the bidding guidelines when issuing the first construction company bid announcement.

If the bidding conditions are relaxed, a three-way competition among Samsung C&T, Hyundai Engineering & Construction, and GS Engineering & Construction may form. Samsung C&T, which has shown interest in the Jamsil Woosung reconstruction, has requested the association to ease the responsible completion commitment condition. Responsible completion refers to the obligation to complete construction within a set period and guarantee use approval or completion. Even if problems arise, the construction company must not halt work and must bear debts such as financial costs incurred if the deadline is exceeded. While this serves as a safety measure from the association's perspective, it is considered a burdensome factor for construction companies.

Samsung C&T has also requested easing of the responsible completion condition in bid guidelines for projects such as Hannam District 4 and Bangbae District 15. A Samsung C&T official explained, "If the responsible completion commitment condition is eased, we can participate in the bid, but if it remains as is, it will be difficult to participate."

Hyundai Engineering & Construction is reportedly requesting the association to delay the re-announcement schedule. An industry insider explained, "There is an opinion that an increase in construction costs is necessary, and in the case of GS Engineering & Construction, it is understood that they have a strong intention to participate in the Jamsil Woosung reconstruction bid to renew their brand image."

The Jamsil Woosung reconstruction project involves building 2,860 apartment units and neighborhood living facilities (commercial spaces) with 4 basement floors and 49 above-ground floors in the area of 101-1 Jamsil-dong, Songpa-gu, Seoul.