Construction Companies Competing for the 7 Trillion Won Project Contract: Hyundai, Daelim, and GS

General Meeting for Construction Company Selection at COEX, Seoul on the 21st at 2 PM

Regular General Meeting of Hannam 3 District Redevelopment Association held at Cheonbokgung Church in November 2019 / Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Onyu Lim] Hyundai Engineering & Construction, Daelim Industrial, and GS Engineering & Construction are competing for the construction rights of Hannam 3 Redevelopment Promotion District (Hannam 3 District) in Yongsan-gu, Seoul, known as the largest redevelopment project since the era of Dangun.

The Hannam 3 District redevelopment association will hold a general meeting at 2 p.m. on the 21st at COEX in Gangnam-gu, Seoul, to select the construction company. For the general meeting to select the construction company to be held, more than half (1,921) of the total 3,842 association members must attend.

Despite concerns over the spread of the novel coronavirus (COVID-19), the Gangnam District Office issued an administrative order prohibiting gatherings to the association on the 17th, but the association decided to proceed with the general meeting, fearing that further delays in selecting the construction company would prolong the project.

The association has been in the process of selecting a construction company for 10 months. Since the first announcement at the end of August last year, the bidding competition overheated, leading the Ministry of Land, Infrastructure and Transport and the Seoul Metropolitan Government to invalidate the bids, and the process has been delayed due to subsequent prosecution investigations.

Moreover, the rapid spread of COVID-19 has further delayed the schedule. The venue for the construction company selection general meeting was originally planned to be Hyochang Stadium in Yongsan-gu, Seoul, but due to the re-spread of COVID-19 and the closure of public facilities, the reservation was canceled, and the venue was urgently changed.

Including the three construction companies participating in the bidding, it is expected that at least 2,000 people will gather on site. The association emphasized that it has simultaneously reserved the 1st and 3rd floors of COEX to secure safe distances for members and will strictly follow the quarantine guidelines of the Korea Disease Control and Prevention Agency during the general meeting.

On the day of the construction company selection general meeting, the procedure will include listening to presentations from the three companies, voting, and then conducting a final vote between the top two companies. Association members will cast their votes considering the bidding proposals and brands of these three companies.

Regarding project financing, Hyundai Engineering & Construction proposed over 2 trillion KRW (including 500 billion KRW for project promotion costs), Daelim Industrial proposed 1.6 trillion KRW, and GS Engineering & Construction proposed 1.5 trillion KRW. Construction costs are Hyundai Engineering & Construction 1.7377 trillion KRW, Daelim Industrial 1.888 trillion KRW, and GS Engineering & Construction 1.655 trillion KRW.

All three companies promised 100% support for relocation costs with a 100% loan-to-value (LTV) ratio and 100% compensation in case of unsold units.

Meanwhile, Hannam 3 District is the largest redevelopment project to date, with a total project cost of about 7 trillion KRW and planned construction costs reaching 1.888 trillion KRW. It will develop 197 buildings with 6 basement floors to 22 above-ground floors, 5,816 households (including 876 rental units), and neighborhood living facilities in the 686 area of Hannam-dong, Yongsan-gu, Seoul. Since being designated as a New Town in 2003, it was designated as a maintenance district in 2009, approved for association establishment in 2012, passed Seoul city architectural review in 2017, and received project implementation approval at the end of March this year.

This content was produced with the assistance of AI translation services.