Gaepo Woosung 4th Phase Resolves Conflict with Union President's Dismissal... Construction Contractor Competition Remains Uncertain

Preparing for Contractor Selection Under Interim Director System
Announcement Expected in January, Selection in March
Competitive Landscape Reshaped After Bid Cancellation

The executive board of the Gaepo Woosung 4th phase reconstruction association, which had been plagued by internal strife, was dismissed, effectively resolving the conflict. The association plans to proceed with the selection of a construction company by early next year without any setbacks. However, since the bidding process for the construction company was canceled once and has returned to square one, it is difficult to predict the competitive landscape for the construction contract at this time.

According to the maintenance industry on October 3, the Gaepo Woosung 4th phase Reconstruction and Maintenance Association held an extraordinary general meeting on September 27 to dismiss its executives. Out of a total of 505 association members, 200 participated through written resolutions and 55 voted on-site, making a total of 255 participants. Six agenda items related to the dismissal of the executive board were put to a vote that day. The motion to dismiss the association president passed with 253 out of 255 votes in favor, and the motions to dismiss three board directors and one auditor were also approved.

Perspective view of Gaepo Woosung 4th phase. Provided by Seoul City

The motion to dismiss the association president was initiated due to allegations that the president had designated specific finishing materials and received hospitality from a particular materials supplier during the construction company selection process. Additionally, the fact that owners of large units would not all be able to move to similarly large units after reconstruction, as well as the closure of the association's online communication channel, further fueled the push for dismissal.

Until a new executive board is formed, it is reported that a board director will act as interim president and prepare for the construction company selection. The next election for association executives and president is expected to take place in December. Once the new executive board is established, the association plans to announce a new tender for the construction contract in January next year, with the general meeting to select the construction company expected as early as March. Initially, the association had planned to complete the selection of a construction company in the second half of this year, but the cancellation of the tender in September delayed the schedule. Nevertheless, the re-tendering process, which is now targeted for early next year, is expected to proceed as planned despite the dismissal of the president.

However, the competitive landscape among construction companies remains unpredictable. While a competitive bid between Lotte Engineering & Construction and POSCO E&C was initially expected, POSCO E&C now faces the risk of license revocation due to a series of fatal accidents, making its participation uncertain. Furthermore, the association canceled the tender over concerns about Lotte Engineering & Construction being the sole bidder, leading to a reshuffling of the competition. Recently, Hyundai Engineering & Construction and GS Engineering & Construction have also joined the promotional race.

Gaepo Woosung 4th phase is a 459-unit apartment complex with nine floors, located in Gaepo-dong, Gangnam-gu. It is close to Maebong Station on Subway Line 3 and stands alongside Tower Palace by the Yangjaecheon Stream. Its proximity to the Daechi-dong private education district makes it one of the most sought-after locations in Gangnam-gu. In addition, 70% of the units are 129 square meters or larger, and the floor area ratio is only 145%, making the project highly profitable. The total construction cost is estimated at 730 billion won.