Gaepo Woosung 7th Reconstruction Project Terms and Conditions
Daewoo Engineering & Construction announced on June 23 that it had submitted a completion guarantee letter for the construction rights bid for the Gaepo Woosung 7th Reconstruction Project in Seoul. The association for this complex had closed the bidding on the 19th. The company stated, "In many redevelopment projects, construction is often delayed or halted due to negotiations over construction costs. To alleviate such concerns, we have expressed our commitment to 100% responsible completion without any construction stoppage."
Daewoo E&C pledged to fully finance the project costs, while aiming to reduce the financial burden on association members by setting the financing interest rate at the level of the Certificate of Deposit (CD) rate. In preferred areas such as Gangnam, it is common to add a premium to the CD rate, but the company proposed to arrange loans for association members without any additional premium.
When raising the required project financing (PF) through a guarantee from the Housing & Urban Guarantee Corporation (HUG), a guarantee fee is typically incurred. Daewoo E&C also indicated that the company, not the association, would bear this fee. For the payment of the members' contributions, the company proposed a 100% payment upon move-in, rather than requiring members to secure financing in advance. The proposal also included a benefit allowing the payment of contributions to be deferred for up to six years, in two-year increments.
Kim Bohyun, CEO of Daewoo Engineering & Construction, visited and inspected the Gaepo Woosung 7th Complex in Gangnam-gu, Seoul on the 12th. Provided by Daewoo Engineering & Construction
Recognizing that inflation is expected until actual construction begins, the company also offered to defer the impact of price increases for 18 months. Based on its own estimates, Daewoo E&C calculated that, considering the average annual increase in the consumer price index over the past four years, this could save 36.4 billion won.
The company proposed that construction costs be paid using the progress payment method within the limits of the association’s sales revenue. This approach, which pays construction costs only within the association’s sales income, is considered favorable for the association. When the association receives sales revenue, refunds to members are paid first, followed by the payment of essential project expenses, and finally, the construction costs are collected last.
Image of the new apartment complex name proposed by Daewoo E&C to Gaepo Woosung 7th Reconstruction Association. Provided by Daewoo E&C
Additionally, Daewoo E&C offered the condition that it would accept 100% of the construction contract proposed by the association and sign the contract immediately upon being selected as the contractor. The company explained that this measure is intended to prevent any change in attitude or tactics before and after the contractor selection. Daewoo E&C stated, "These project conditions reflect the determination of CEO Kim Bohyun to do his utmost to win the support of association members."
Daewoo E&C proposed naming the complex "SUMMIT PRINITY," utilizing its premium brand "Summit." "Prinity" is a coined term that combines "pride" and "infinity." The company is competing with Samsung C&T Engineering & Construction Group for the construction rights to this project.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
