"High Risk, Low Returns": Why Only Daewoo Remains Among Top 10 Builders in the Gadeokdo New Airport Bid

Lotte Engineering & Construction Withdraws Ahead of First PQ Deadline on the 16th
Hanwha Construction Division Still Undecided Until the Last Minute
Daewoo E&C Remains the Only Top 10 Firm in the Consortium
Government Offers Extended Timeli

There is a high likelihood that none of the top 10 major construction companies will participate in the pre-qualification (PQ) process for bidders in the site development project of Gadeokdo New Airport, a national project worth 10.7 trillion won. Despite the government offering conditions such as an extension of the construction period and an increase in construction costs, Lotte Engineering & Construction, which was considered a strong new participant, has confirmed it will not join the Daewoo Engineering & Construction consortium. The construction division of Hanwha Corporation is also still undecided, repeatedly deliberating without reaching a decision.

The vacancies left by the major companies' cautious withdrawal are expected to be filled by mid-sized and regional construction firms. These companies, often struggling with a lack of projects due to the financial power of the major firms, are joining the consortium in large numbers and will now shoulder this national project. Among the top 10 construction companies, only Daewoo Engineering & Construction remains, and it is expected to lead the consortium.

Last August, Yoonduk Kim, Minister of Land, Infrastructure and Transport (right), is seen inspecting the site of Gadeokdo New Airport. Ministry of Land, Infrastructure and Transport.

According to the construction industry on January 15, with the first PQ deadline approaching on January 16, Lotte Engineering & Construction, ranked eighth in construction capability, has decided not to join the consortium due to a lack of time for internal procedures and review. Although there were reports that the construction division of Hanwha Corporation, ranked eleventh, was certain to participate, the company stated, "Nothing has been finalized," and is still considering joining until the last minute. Lotte Engineering & Construction and Hanwha Corporation’s construction division were expected to fill the gaps left by Hyundai Engineering & Construction (previously holding a 25.5% stake) and POSCO E&C (previously holding a 13.5% stake), both of which withdrew from the consortium.

The reason major companies are holding back is that the project is considered high-risk but low-return. A representative of a major company that decided not to participate said, "Even if we take a 10% stake (about 1.7 trillion won), when divided over the 10-year construction period, the annual revenue contribution is less than 200 billion won. Considering the difficulty of maritime reclamation in front of Gadeokdo, weather variables, and major accident risks, the revenue share is too insignificant and does not align with our focus on sound management."

While the major companies are avoiding consortium participation, mid-sized and regional construction firms are eager to join. According to Daewoo Engineering & Construction, mid-sized companies such as HJ Heavy Industries & Construction and Joongheung Construction have decided to newly join the consortium. Industry sources say that some existing participants are even requesting larger stakes to secure more government projects. The desperation of mid-sized and regional construction companies, suffering from a "project cliff" due to the construction market downturn, is manifesting as requests for increased stakes.

As a result, among the top 10 construction companies based on construction capability, only Daewoo Engineering & Construction (ranked third) remains in the consortium. The likelihood has increased that Daewoo Engineering & Construction will lead the project, heading a group of mid-sized and small construction companies. The company is currently reallocating stakes, including the 39% previously held by Hyundai Engineering & Construction and POSCO E&C, who left the consortium. Daewoo Engineering & Construction’s stake is expected to increase significantly from the previous 18% to over 30%. Currently, the Daewoo Engineering & Construction consortium is the only eligible bidder for the Gadeokdo New Airport site development project, and if this sole bid is repeated twice, a private contract is expected to be awarded.

Some in the industry say that Daewoo Engineering & Construction’s actions reflect strong confidence in its port and maritime construction expertise as the top-ranked company in the civil engineering sector (as of 2025), as well as Chairman Jung Wonjoo’s determination to solidify the company’s position in the industry through the symbolic title of "lead contractor for the Gadeokdo New Airport project." A Daewoo Engineering & Construction representative stated, "Our experience and know-how in underwater and port construction off Gadeokdo, such as with the Geoga Bridge, are the best in the country and unmatched. As the lead company of the consortium, we will take responsibility and complete the project."

The Gadeokdo New Airport construction project involves building runways, breakwaters, and other airport facilities on a 6,669,000-square-meter site in the Gadeokdo area of Busan, with a total value of 10.7175 trillion won. The project began to falter last May when Hyundai Engineering & Construction, the lead company of the consortium, withdrew due to disagreements over construction period and costs. POSCO E&C subsequently left the consortium, resulting in a shift to a Daewoo Engineering & Construction-centered structure. To normalize the project, the government extended the construction period from 84 to 106 months and increased the construction budget by about 200 billion won, and is currently proceeding with a rebidding process.

Meanwhile, the Gadeokdo New Airport Construction Corporation aims to begin priority construction, including setting up an on-site office, in the second half of this year. On January 13, Lee Yoonsang, president of the corporation, stated during a Ministry of Land, Infrastructure and Transport agency work report, "We will select a qualified contractor for the detailed design by August and expedite compensation and relocation procedures to get the project on track within the year." The plan is to start land expropriation procedures next month, proceed with temporary resident relocation and compensation in April, and move the project forward with a focus on smart innovation and a low-carbon green airport.