Controversy Over Calls Urging Delegates to Reject Agenda Ahead of Bidding Guideline Change Meeting
Members Protest, Accusing Association of Favoring a Specific Construction Company
It has been confirmed that the association of Seongsu Strategic Maintenance Zone 1, considered a major redevelopment project along the Han River Belt, made phone calls to delegates requesting them to vote down a proposed change in the bidding guidelines for selecting a construction company. This move comes as Hyundai Engineering & Construction and HDC Hyundai Development Company, both interested in the project, demanded a relaxation of the guidelines, and the association effectively asked delegates to block such changes. Some association members have raised concerns that the association may be favoring a particular construction company.
According to an Asia Economy report on September 3, the association recently hired part-time staff to conduct telemarketing targeting delegates. During this process, some delegates received requests such as, "Hyundai Engineering & Construction initiated the proposal, so the delegates' meeting will be reconvened," and "If you support the agenda, the project will be delayed. Please oppose it." The upcoming delegates' meeting on September 4 will discuss agenda items including the removal of regulations prohibiting the allocation of premium floors to association members, guaranteeing premiums upon move-in, and prohibiting the disclosure of general and association member sale prices and contributions, as well as the relaxation of excessive completion liabilities.
On the 29th of last month, a sign opposing private contracts was posted in front of the Seongsu 1 District Association office in Seongsudong 1-ga, Seongdong-gu, Seoul. Photo by Lee Ji-eun
Some association members have claimed that the association is deliberately encouraging a rejection to enable a private contract with GS Engineering & Construction. Seongsu 1 District was originally expected to see a three-way competition among HDC Hyundai Development Company, Hyundai Engineering & Construction, and GS Engineering & Construction. However, Hyundai Engineering & Construction and HDC Hyundai Development Company did not attend the site briefing, citing excessively strict bidding conditions. They argued that the excessive restrictions in the bidding guidelines made it impossible to differentiate themselves from competitors. Since only companies that attend the site briefing are eligible to bid, GS Engineering & Construction now stands a strong chance of winning the contract alone. GS Engineering & Construction has invested considerable effort in this project site for a long time.
If the proposal to change the bidding guidelines is approved at the delegates' meeting, another site briefing must be held. Construction companies that missed the first briefing would then be able to participate in the bidding if they attend the new briefing. This would allow Hyundai Engineering & Construction and HDC Hyundai Development Company to rejoin the competition. Association member Mr. A stated, "In a situation where the success of competitive bidding is at stake, the association's encouragement to reject the proposal can only be interpreted as siding with a particular construction company," adding, "There are even suspicions that GS Engineering & Construction may have intervened in the decision-making process of the delegates' meeting."
Amid growing controversy, the association explained to its members in a statement that "the incident was caused by mistakes made by temporary staff." The association stated, "There was an error during the process in which temporary staff encouraged delegates to attend the meeting and explained the situation. There was no intention to pressure delegates to participate in the meeting." An association representative clarified, "It appears that the temporary staff made calls to some, not all, delegates over several hours," and emphasized, "This has nothing to do with favoring any particular construction company."
A GS Engineering & Construction representative denied allegations of involvement in the delegates' decision-making, stating, "These claims are groundless, and we are diligently preparing for the bidding to select the construction company."
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