Bidding for Contractor Selection Closed on the 20th
Hyundai Engineering & Construction Sent Message Declining to Participate
Risk Management in Response to Controversies Surrounding the Association
Hyundai Engineering & Construction has decided not to participate in the contractor bidding for District 1 of the Seongsu Strategic Redevelopment District, the largest redevelopment project site in northern Seoul. With Hyundai Engineering & Construction, a strong contender, opting out of the bid, GS Engineering & Construction is now widely expected to secure the construction contract through a virtually uncontested, sole bid.
According to the redevelopment industry, Hyundai Engineering & Construction sent a text message to association members on the 20th, the bid deadline, to announce its intention not to participate. In the message, Hyundai Engineering & Construction stated, "Considering the uncertainties and risks that have emerged during the project promotion process, we have determined that participating in the bid could be burdensome for both the association and our company, and therefore decided not to take part in the bidding."
The decision by Hyundai Engineering & Construction to withdraw is seen as being influenced by various controversies surrounding the association. Initially, a three-way competition among Hyundai Engineering & Construction, HDC Hyundai Development Company, and GS Engineering & Construction was expected for Seongsu District 1. However, after allegations surfaced of collusion between the association and a particular construction company, the bidding was canceled once, and procedural disruptions continued. The Seoul Metropolitan Government and Seongdong District Office launched a fact-finding investigation to determine whether any illegal acts had occurred, and legal risks also emerged as the association president was criminally accused on charges of breach of duty.
During this process, HDC Hyundai Development Company decided not to participate, narrowing the race to Hyundai Engineering & Construction and GS Engineering & Construction. However, Hyundai Engineering & Construction is also believed to have withdrawn from the bidding after concluding that smooth project execution would be difficult because transparency concerns surrounding the association had not been resolved.
Industry observers also believe that ongoing controversies at other project sites within the Seongsu Strategic Redevelopment District influenced the decision to withdraw. In Seongsu District 2, the former association president resigned following an unfortunate incident involving a POSCO E&C promotional staff member (OS), leading to a halt in the contractor selection process. In Seongsu District 4, Lotte Engineering & Construction and Daewoo Engineering & Construction participated in the bid, but conflicts arose when the association announced a re-tender citing incomplete documentation and then abruptly canceled it. As friction continued to arise at project sites within the same area, Hyundai Engineering & Construction appears to have revised its strategy from a risk-management perspective, choosing instead to concentrate the company’s full capabilities on Apgujeong Districts 3 and 5, which are key project sites for the first half of the year.
As a result, the likelihood has increased that GS Engineering & Construction will secure District 1 of the Seongsu Strategic Redevelopment District without competition. On the previous day, GS Engineering & Construction visited the association office to submit its bidding documents and paid the entire 100 billion won bid deposit in cash. The company has proposed the complex name "Rebenique Xi" and plans to offer a differentiated design in collaboration with world-renowned architectural firm David Chipperfield Architects.
Seongsu District 1 is considered the largest redevelopment project site along the Han River, with a total construction cost of 2.154 trillion won. Once the project is completed, it will feature an apartment complex with 3,014 households, as well as cultural and convenience facilities.
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