Controversy Over Fairness in 'Yeosu Jukrim 1 District Development' Open to Private Sector Bidders

Local Business Officials Point Out "It's No Different from Starting a Game on a Tilted Field"

[Asia Economy Honam Reporting Headquarters Reporter Kim Chunsu] As Jeonnam Development Corporation is soliciting private developers for the Yeosu Jukrim 1 District apartment complex development, voices of dissatisfaction are emerging from the local construction industry, claiming that unfavorable evaluation criteria have been applied, resulting in a loss of fairness.

Some parts of the public announcement guidelines for selecting private developers can only be met by large central construction companies, effectively excluding local firms.

The estimated project cost for Yeosu Jukrim 1 District is a total of 450 billion KRW, with pure construction costs excluding land acquisition expenses amounting to about 270 billion KRW. The private developer will be responsible for construction and sales-related costs.

According to Jeonnam Development Corporation on the 3rd, the Jukrim 1 District project involves constructing 1,272 apartment units, including 60,659㎡ (931 units) in A2 Block and 21,453㎡ (341 units) in A4 Block.

Jeonnam Development Corporation announced the public solicitation for private developers of the Jukrim 1 District apartment complex on August 31, and has been receiving letters of intent and conducting Q&A procedures.

They plan to receive project applications by the end of this month, form a selection committee, and select the preferred negotiation partner on December 2.

The evaluation scores total 1,000 points, divided as follows: project plan 240 points, management and operation plan 420 points, development plan 120 points, specialization plan 120 points, and total project cost price evaluation 100 points.

Most of the evaluation is relative, but within the management and operation plan, which carries the highest weight of 420 points, 230 points (financial soundness and performance capability) are evaluated on an absolute scale.

The local construction industry is protesting that, among the absolute evaluation criteria, only companies ranked within the top 5 nationwide in construction capability evaluation can receive full marks for the representative company's equity capital and construction capability evaluation items.

For the representative company's equity capital, which has a maximum of 40 points, companies with equity capital at least ten times the total project cost of 450.1 billion KRW can receive full marks, but it is known that only about two companies nationwide meet this criterion.

Regarding the construction capability evaluation, only five companies, all central construction firms, received full marks based on the Ministry of Land, Infrastructure and Transport's 2021 announcement.

Local construction companies have also raised complaints about the large 10-point intervals between score grades in both evaluation items.

A local construction industry official said, "In the case of Jeonnam Development Corporation's Jukrim 1 District, the evaluation criteria are excessively stringent, making it difficult for local companies to participate," and expressed frustration, saying, "If the evaluation proceeds as is, it means competing on a tilted playing field."

Jeonnam Development Corporation stated that out of the total 1,000 evaluation points, 230 points are absolute evaluations, and the remaining 730 points are relative evaluations, so the evaluation structure is not as disadvantageous to local companies as perceived.

A Jeonnam Development Corporation official explained, "Such criteria were applied because an accurate evaluation of companies is necessary," and added, "Of the 1,000 evaluation points, 630 points are from relative evaluations by the review committee, allowing a 63-point difference, so if local companies submit good project proposals, they can sufficiently make up for it."

Previously, in the apartment complex (3940BL) project in the Oryong District, which Jeonnam Development Corporation pursued in a similar manner, full marks for the representative company's construction capability evaluation were given up to the top 10 companies, and the score intervals for credit ratings were set at 5 points per grade.

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