Countdown to Contractor Selection for Seongsu Zones 1 and 2... Will the 4 Trillion Won Redevelopment Stay on Track? [Real Estate AtoZ]

Internal Strife Continues in Seongsu District 1
Re-bidding to Proceed After General Assembly on the 18th
Nine Companies Attend Briefing for Seongsu District 2
Too Early to Predict Three-Way Race Among Samsung, DL, and POSCO

The competition to secure construction contracts for Seongsu Strategic Maintenance Districts 1 and 2, with total construction costs exceeding 4 trillion won, has officially begun. District 1, which started the bidding process first, is expected to face inevitable delays in contractor selection due to ongoing internal conflicts within the union. The situation now requires watching whether the internal strife can be resolved and whether construction companies will participate in the re-bidding process. Meanwhile, District 2, which has been closely monitoring the outcome of District 1, has drawn attention as many construction companies attended its project briefing session, raising questions about whether a three-way competition will emerge.

Suspicions of Favoritism Toward a Specific Construction Company... District 1, Conflict Remains Unresolved

According to the maintenance industry on September 15, District 1 held an emergency board meeting (including the union president and executives) on September 9, where it partially revised the bidding guidelines and passed an agenda to re-bid for contractor selection. If the agenda is finally approved at the general assembly scheduled for September 18, the bidding process can start over from the beginning. District 1 is considered the largest redevelopment site along the Han River, with total construction costs reaching 2.154 trillion won. Once redevelopment is completed, the area will feature 3,014 apartment units and cultural amenities.

On the 4th, 58 members of the Seongsu 1 District union held a rally near the union office condemning the executive committee. Photo by Lee Ji-eun

The revised bidding guidelines include allowing union members to be allocated to premium floors and buildings, removing the cap on additional relocation loans, eliminating the clause for priority reimbursement, relaxing the contractor's completion guarantee, and clarifying the scope of construction. The clause limiting relocation loan collateral value to within 100% LTV will be removed at the request of union members for fairness with other districts. However, a new provision was added to ensure that union members will not be jointly liable if the collateral is exceeded. The allocation of premium floors and buildings was also permitted, as it was determined not to violate the Urban Maintenance Act or related regulations.

This board meeting was convened after union members strongly protested the absence of Hyundai Engineering & Construction and HDC Hyundai Development Company at the project briefing. Initially, HDC Hyundai Development Company, Hyundai Engineering & Construction, and GS Engineering & Construction were considered the leading competitors for Seongsu District 1. However, due to the bidding conditions, HDC Hyundai Development Company and Hyundai Engineering & Construction did not participate, leaving GS Engineering & Construction as the sole candidate for a negotiated contract.

Despite the board's decision, union members' opposition is not expected to subside easily. Some members have formed an emergency committee, raising suspicions of favoritism toward a particular construction company and pushing for a motion to dismiss the union's executive committee.

The emergency committee also criticized the board's decision as a "show of action" in response to backlash against the union president and executive committee. In particular, the emergency committee is focusing on the issue that the "mutually conflicting clauses" were not removed. Initially, the union had decided that in the event of a conflict between the bidding guidelines and the contractor's proposal, the union would make the final decision. Union members argued that this guideline could impose excessive restrictions on contractors and demanded its removal. Although the union partially amended the clause, it did not delete it. Moreover, distrust has reached its peak as the union's executive committee is currently under police investigation for allegedly receiving entertainment from executives of a specific construction company.

Hyundai Engineering & Construction and HDC Hyundai Development Company have stated that they will decide whether to participate in the bidding after observing future developments. A Hyundai Engineering & Construction representative said, "We will decide whether to participate once the contractor bidding guidelines are released."

District 2: Will There Be a Three-Way Competition? Samsung C&T's Demands Are Key

While the conflict in District 1 deepens, District 2 is making smooth progress in its contractor selection process. At the project briefing held on September 10, nine construction companies participated, including POSCO E&C, Samsung C&T, DL E&C, Kumho Construction, and Daewoo E&C. The union plans to close bidding submissions on October 28 and, if competitive bidding is achieved, to hold a joint briefing and a general assembly for contractor selection in December.

Old low-rise buildings stand in a row around the Seongsu 2 District area. Photo by Lee Ji-eun

The maintenance industry is closely watching whether this contractor selection process will result in a three-way competition among DL E&C, POSCO E&C, and Samsung C&T. DL E&C and POSCO E&C have been actively promoting themselves at the site from an early stage. DL E&C is appealing to union members with its high-end brand "Acro" and financial stability. POSCO E&C has chosen not to participate in the Songpa Hanyang 2nd bidding, instead focusing its resources on District 2, signaling its intention to establish its high-end "Otiere" brand along the Han River through this bid. Samsung C&T is considering a strategy to develop Districts 2, 3, and 4 into a Raemian brand town.

It is still too early to predict a three-way competition. Samsung C&T is known to have requested that the union exclude itemized bidding and the completion guarantee letter even before participating in the bid. Furthermore, there is skepticism within the union about the feasibility of Samsung C&T's Raemian brand town strategy.

The union has stated that it will focus on whether the design can provide a 100% Han River view, ultra-high-rise buildings up to 65 stories, and realistic alternative designs. Lee Giwon, president of the Seongsu District 2 union, said, "We will pay close attention to contractors who can present design drawings that maximize ultra-high-rise and Han River views and bring the most feasible alternative designs within the planned budget," adding, "I hope all three construction companies participate and compete in the bidding."

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