Collapse disaster trial... Demolition estimate of 1.5 billion won cut before bidding "HDC Hyundai Development Company Dominant"

[Asia Economy Honam Reporting Headquarters Reporter Park Jin-hyung] Testimony has emerged in the trial of the 'Gwangju Collapse Disaster' indicating that there was prior price negotiation during the bidding process for selecting the demolition company.

The Criminal Division 11 of the Gwangju District Court (Presiding Judge Jeong Ji-seon) held a trial on the 22nd for seven construction officials indicted on charges including professional negligence resulting in death, and conducted witness questioning of Kim, CEO of Hansol Enterprise.

In response to prosecution questions about the related circumstances, CEO Kim explained that around August last year, before winning the bid as the demolition contractor, he met with the representative of Dawon ENC and Manager Choi of the Urban Maintenance Team at HDC Hyundai Development Company (HDC Hyundai) to discuss demolition costs.

At that meeting, at the request of Manager Choi from HDC Hyundai, they submitted an estimate between 8 billion and 8.5 billion KRW (approximately 800 to 850 million USD), and received feedback that the unit price per pyeong (Korean unit of area) was high. Subsequently, they kept lowering the amount and finally submitted an estimate of about 6.8 billion KRW. The actual contract was concluded at 5 billion KRW.

When asked by the prosecution whether the representative of Dawon, who was present together, also submitted an estimate, Kim replied, "I don't know well because it is a different company." This question appeared to be aimed at confirming bid rigging.

Not only did they adjust the unit price in advance, but testimony also claimed that the demolition company was unfairly burdened with waste disposal costs.

The prosecution asked about the circumstances under which Hansol Enterprise, when participating in the 'designated competitive bidding' method for selecting the demolition company, submitted an estimate of 6.87 billion KRW including waste disposal costs.

Kim answered, "We are always in the position of the subordinate party, so the principal told us to do so," and added, "HDC Hyundai, the primary contractor, set the conditions."

According to the Framework Act on the Construction Industry, HDC Hyundai Development Company apparently signed a direct contract with the waste disposal company Hyundai Environment Development, but Hansol was made to act as the guarantor.

This means that even if the waste disposal costs increase later, Hansol, which won the demolition contract, would bear all the costs instead of Hyundai Environment Development.

The demolition contract was illegally subcontracted in the order of HDC Hyundai Development → Hansol & Dawon → Baeksol Construction, etc.

It was also explained that broker Moon Heung-sik led the background of the side contract between Hansol and Dawon.

CEO Kim said, "We paid 100 million KRW to Mr. Moon, who proposed to settle Dawon, but after winning the bid, he told us to work together with Dawon, so we signed a side contract with a 70:30 split."

The contract terms stipulated that 70% of the construction profits would go to Hansol and 30% to Dawon, and they would share the work without dividing it.

Both companies assigned site managers to the demolition site.

Among them, the Dawon site manager claimed, "We only agreed to share the profits and did not take charge of site work," while CEO Kim stated, "We agreed to jointly carry out the demolition, with Hansol’s site manager handling administrative tasks and Dawon overseeing overall site management."

Meanwhile, the defendants in this consolidated trial include Seo (57), site manager of the redevelopment contractor Hyundai Development Company; Kim (57), safety manager; Noh (53), public affairs manager; Kang (28), site manager of Hansol, a general building demolition subcontractor; Jo (47), CEO of Baeksol and excavator operator; Kim (49), site manager of Dawon ENC, responsible for asbestos demolition subcontracting; and Cha (59), demolition site supervisor.

They were indicted on charges of causing a building collapse accident on June 9 in the Hakdong 4 District of Gwangju by ignoring demolition plans and regulations or neglecting supervisory duties, resulting in 17 city bus passengers passing nearby being injured or killed (9 dead, 8 injured).

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