"False Promotion as Doosan Group" vs "Bid Violation"... Posco E&C and Doosan Construction, Overheated Bidding War

Gyeonggi Province’s Largest Reconstruction Project of the Year
Doosan Construction Makes a Bold Move with Ultra-Low Construction Cost
POSCO E&C Offers Measures to Ease Association Members’ Burden
Escalating Slander Battle... Association Issues Warnings to Both Sides

The bidding war for the reconstruction project of Eunhaeng Jugong Apartment in Seongnam City, Gyeonggi Province, considered the largest reconstruction project in the region this year, has heated up. POSCO E&C and Doosan Construction are competing fiercely, lowering construction costs competitively and promising no future increases in construction costs, escalating into an overheated competition. As mutual slander broke out, the association has stepped in to sanction them.

The Eunhaeng Jugong Apartment reconstruction project is a development plan to build a total of 3,198 residential units ranging from six basement floors to 30 above-ground floors in the Eunhaeng-dong area of Jungwon-gu, Seongnam City. After the contract with the previous consortium of GS Construction and HDC Hyundai Development Company was terminated due to issues with construction cost increases, the contractor is being reselected. POSCO E&C and Doosan Construction participated in this bid, and the association plans to decide the contractor after a general meeting on the 16th.

Doosan’s Shocking Proposal: Construction Cost of 6.35 Million KRW per 3.3㎡

Perspective view of POSCO E&C's 'The Sharp Master View'. Provided by POSCO E&C.

Doosan Construction has made a shocking proposal with a low bid. They proposed a construction cost of 6.35 million KRW per 3.3㎡. According to the Housing Environment Research Institute, the average construction cost per 3.3㎡ for nationwide redevelopment projects last year was 7.7 million KRW. This is a construction cost rarely seen these days in the metropolitan area. Additionally, Doosan Construction offered a condition to fix the construction cost without reflecting inflation for two years after actual construction begins. They also presented a blueprint to create a landmark in Seongnam’s original downtown by applying their high-end brand, 'The Zenith.'

On the other hand, POSCO E&C proposed a construction cost about 600,000 KRW higher than Doosan’s, at 6.98 million KRW per 3.3㎡. Instead, they set the association’s project budget limit at 890 billion KRW, proposing to procure 240 billion KRW interest-free to reduce the association’s burden. They also offered additional benefits such as attributing balcony option profits and demolition byproduct sales profits to the association. By proposing a specialized design called 'Grand Slope,' a gentle slope where residents can leisurely stroll along the water space, they are aiming to win the favor of the association members. Overall, POSCO E&C is evaluated to lead in brand and recognition, while Doosan Construction leads in cost.

"Misleading as a Doosan Group Affiliate" Sharp Exchange of Accusations

Doosan Construction 'The Zenith' bird's-eye view. Provided by Doosan Construction.

As the bidding competition overheats, slander between the two companies continues. With a high project feasibility due to a floor area ratio of 116% and a rare large-scale bidding opportunity in the Gyeonggi area, sharp exchanges are not spared. POSCO E&C claimed that Doosan Construction promoted content not included in the bid proposal and sent an official letter to the association requesting disqualification of Doosan Construction’s bid and forfeiture of the 35 billion KRW bid deposit. They alleged that Doosan Construction violated bidding guidelines by changing exterior wall finishes and gate designs during the briefing session.

Furthermore, POSCO E&C claims that a Doosan Construction executive made remarks at the briefing that could cause confusion, implying they are an affiliate of the Doosan Group. Doosan Construction was acquired by the private equity firm Q Capital in 2021 after leaving the Doosan Group. Regarding this, a Doosan Construction official said, "We are internally verifying whether such remarks were actually made." Doosan Construction countered by claiming that POSCO E&C’s conditions such as ‘no change in construction cost’ and ‘interest-free project fund loan’ violated bidding guidelines. The association has issued warnings to both companies to resolve the situation and stated that the contractor selection schedule will proceed without disruption.

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