Selection of Construction Companies for Sinbanpo 12th, 27th, and Jamsil Woosung 4th on the Same Day

Three reconstruction complexes in Seocho and Songpa districts will select construction companies on April 22. Since some sites have been re-advertised with increased construction costs after more than one failed bid, there is keen interest in whether all three will successfully select contractors.

According to the construction industry on the 6th, Shinbanpo 27th Complex, Shinbanpo 12th Complex, and Jamsil Woosung 4th Complex will hold bidding for contractor selection on April 22. On the previous day, site briefings for Shinbanpo 27th and 12th Complexes were held simultaneously, attended by six and five construction companies respectively. At the Shinbanpo 12th Complex briefing, Samsung C&T, Daewoo E&C, Lotte Engineering & Construction, HDC Hyundai Development Company, Kumho Construction, and Hoban Construction participated. At the Shinbanpo 27th Complex briefing, SK Ecoplant, DL E&C, Kumho Construction, Hanyang, and Doosan Engineering & Construction took part.

Shinbanpo 27th Complex Bird's-eye View (Source=Seoul City)

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Shinbanpo 27th Complex is holding its second contractor selection after a failed bid, raising the construction cost from 9.08 million KRW to 9.58 million KRW per pyeong (3.3㎡). The association also attempted contractor selection in January, but the proposed construction costs were too low, causing companies to withdraw from bidding.

Among the companies attending the site briefing, SK Ecoplant, which has been actively pursuing the Shinbanpo 27th Complex project, is considered the most likely to win the contract. SK Ecoplant is considering applying its high-end brand ‘Define’. Currently, the Define brand has been confirmed for projects such as Noryangjin 2nd and 7th Districts, Gwangjang-dong Samsung 1, Busan Gwang-an 2nd District, and Banyeo 1-2 District.

An SK Ecoplant representative stated, "Although the complex is small, the location is excellent and entering the Gangnam area is significant, so we are positively considering participating in the bid." A construction industry insider explained, "While the construction cost may seem high, considering the characteristics of the Shinbanpo area and the level of finishing materials requested by the association, there are aspects that justify it."

Shinbanpo 12th Complex Bird's-eye View (Source=Seoul City) [Image Source=Yonhap News]

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Shinbanpo 12th Complex announced contractor selection on March 23, setting the construction cost at 8.97 million KRW per pyeong (3.3㎡). Among the companies attending the briefing, Lotte Engineering & Construction shows the strongest intention to win the contract. The company’s headquarters is adjacent to Shinbanpo 12th Complex, and it also holds the construction rights for nearby Shinbanpo 13th Complex (Shinbanpo Le'El). Lotte Engineering & Construction is promoting the application of its high-end brand ‘Le'El’ for Shinbanpo 12th Complex and announced a collaboration plan last December with the global architectural design firm Jerde. John Paulin, Jerde’s vice president and chief designer, personally visited Shinbanpo 12th Complex to develop design proposals.

A Samsung C&T representative said, "We are interested and attended the site briefing, and we plan to finalize our participation after reviewing the bid and construction conditions." Shinbanpo 12th Complex, completed in 1982, consists of three buildings with 312 households. After reconstruction, it will transform into five buildings with up to 35 floors and 432 households.

Jamsil Woosung 4th Phase Aerial View

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Jamsil Woosung 4th Complex, which has failed contractor selection twice, will hold a site briefing on the 8th. Major construction companies confirmed to attend include DL E&C, Daewoo E&C, and POSCO E&C. Due to two failed bids, the construction cost in the third contractor selection announcement has been raised from 7.6 million KRW to 8.1 million KRW per pyeong (3.3㎡).

Attendance at site briefings is routine, and there is intense jockeying among construction companies, so whether they will participate in the bidding remains to be seen. Due to rising raw material prices and labor costs, construction companies are cautiously participating in bids. This has led to frequent cases of failed bids. Moreover, there is a sensed reluctance among construction companies to engage in competitive bidding, fearing that competition might lead to reduced construction costs.

A construction industry insider said, "Sales staff monitor the site atmosphere, and if a competitive environment forms among contractors, the association members might vote to lower construction costs, so companies avoid bidding in highly competitive areas altogether."

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