Almost Reached Agreement... Yet the Duncheon Jugong Conflict Remains Unresolved

Seoul City Interim Announcement: "Agreement on 8 of 9 Clauses"
Union "Not True" Immediate Denial... Construction Project Team "Declared Mediation Breakdown Themselves, Serious Concern"
Resumption Timing and Final Agreement Still Challenging

The Dunchon Jugong union and the construction business group have agreed on 8 out of 9 major issues. The eight agreed-upon clauses are ▲ re-verification of the existing construction cost increase ▲ review of the sale price ▲ general sales and union member sales ▲ design and contract changes ▲ verification ▲ general meeting resolution ▲ resumption of construction ▲ effectiveness of the agreement and liability in case of violation. However, since there is a disagreement regarding the commercial dispute, more time is expected before construction can resume. A view of the Dunchon Jugong reconstruction site in Gangdong-gu, Seoul, on the 7th. Photo by Moon Honam munonam@

[Asia Economy Reporters Kim Hyemin and Hwang Seoyul] The Dunchon Jugong crisis in Gangdong-gu, Seoul, which seemed to have passed the critical point, is still unresolved.

This comes as the Dunchon Jugong Reconstruction Association denied Seoul City's announcement that only one of the nine clauses remains to be agreed upon. There remains a temperature gap between the association and the construction consortium (Hyundai Engineering & Construction, HDC Hyundai Development Company, Daewoo Engineering & Construction, Lotte Engineering & Construction) over the method of resuming construction and the commercial dispute issue. Observers say there is still a long way to go before a final agreement and construction resumption.

On the 8th, the Dunchon Jugong construction consortium issued a statement saying, "The association's executive committee is providing distorted information to the members and also giving false information about Seoul City's interim announcement," adding, "They are effectively declaring the mediation has failed themselves, which is a serious concern."

The previous day, Seoul City announced at a briefing on the interim results of mediation for Dunchon Jugong that the association and the construction consortium had reached agreement on eight out of nine contentious issues. However, Kim Hyuncheol, head of the Dunchon Jugong Reconstruction Association, immediately released a statement denying this, saying, "We informed Seoul City that we could not agree to the nine clauses of the agreement received on the 29th of last month, and there has been no progress to date," adding, "In this situation, Seoul City's announcement that eight clauses have been agreed upon is inappropriate."

Regarding Seoul City's announcement that the association agreed to resume construction after approving the increase in construction costs at a general meeting, Kim also expressed a difference in stance, saying, "This directly contradicts the association's claim for a swift resumption of construction," and "If the construction consortium's plan is followed, it will be difficult to resume construction within this year."

The construction consortium immediately rebutted, accusing the association's executive committee of providing distorted information to the members. The consortium stated, "They are informing members with false information that it takes 8 to 9 months from signing the agreement to resuming construction," and added, "Despite our additional proposal to cooperate by lending interest-bearing relocation expenses within 60 days after signing the agreement until the general meeting, the association (executive committee) falsely claimed that the consortium rejected it, and even distributed text messages stating 'the press release distributed by Seoul City is false,' undermining Seoul City's mediation efforts."

Regarding the last remaining contentious issue, the commercial dispute, neither the association nor the construction consortium is backing down. Kim emphasized, "The construction consortium demanded that within 60 days, the commercial representatives' organization and the PM company reach an agreement on the commercial issue and pass it through a general meeting, but if this is included in the agreement, the association will have no choice but to comply with any unfair demands from the PM company."

On the other hand, the construction consortium said, "If the commercial dispute is not resolved and approved at the general meeting before resuming construction, injunctions prohibiting sales or construction related to the commercial area may occur after construction restarts, which could delay the overall completion and move-in," expressing serious concern. They added, "Currently, construction on the third floor of the Line 9 commercial area is underway, and construction of two apartment buildings including association members' units from the fourth floor must proceed," and "If the commercial dispute is not resolved, it will be impossible to carry out construction of the two apartment buildings."

Contrary to the atmosphere at the time of Seoul City's announcement, the association and the construction consortium have not narrowed their conflicts over major issues, leading to predictions that it may take considerable time to reach a final agreement. An industry insider said, "Contrary to Seoul City's announcement that most clauses have been agreed upon, the rift between the parties remains deep."

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