'2 Trillion Won Prize' Seongsu District 1, Board of Delegates Rejects Proposal... GS E&C Set for Uncontested Entry

Proposal to Change Bidding Guidelines Rejected
Hyundai and HDC Hyundai Development Company Skip Project Briefing
Private Contract with GS Engineering & Construction Now Likely as Second Briefing Falls Through

The association for Zone 1 of the Seongsu Strategic Maintenance Area proposed an amendment to the bidding guidelines, but it was rejected, increasing the likelihood that GS Engineering & Construction will secure the project without competition. HDC Hyundai Development Company and Hyundai Engineering & Construction, both of which were aiming to win the contract, are now expected to withdraw from the process.

According to the maintenance industry, the delegates’ meeting for Seongsu Zone 1 held on September 4 resulted in 71 votes against and 44 votes in favor out of a total of 115 members, leading to the rejection of the proposal. The agenda for the meeting included issues such as premium allocation of royal floors to association members, guaranteeing a premium upon move-in, prohibiting the disclosure of general and association member sales prices as well as contributions, and easing excessive obligations for guaranteed completion.

With the proposal rejected, it has become highly likely that GS Engineering & Construction will be awarded the contract through private negotiation. Previously, a three-way competition among GS Engineering & Construction, Hyundai Engineering & Construction, and HDC Hyundai Development Company was anticipated. However, Hyundai Engineering & Construction and HDC Hyundai Development Company did not attend the project briefing, citing the association’s bidding guidelines as excessively restrictive. Companies that do not attend the briefing are ineligible to participate in the construction bidding.

Both companies had been weighing their participation based on the outcome of the delegates’ meeting. On August 18, they sent an official letter to the association requesting the relaxation of bidding guideline restrictions, arguing that the excessive constraints made it impossible to differentiate themselves from competitors. As latecomers to the bidding process, both companies have repeatedly requested changes to the restrictive bidding conditions, stating that the current terms are unfavorable. Since GS Engineering & Construction has long been dedicated to this project, any challenger would need to propose significantly differentiated terms to overturn the current landscape. Regarding their potential withdrawal, a representative from HDC Hyundai Development Company commented, "We will continue to review the situation internally regarding Seongsu Zone 1," refraining from further remarks.

Seongsu Zone 1 is considered the largest redevelopment site along the Han River, with total construction costs amounting to 2.154 trillion won. Once redevelopment is completed, the area will feature 3,014 apartment units as well as cultural and convenience facilities.