Bid Participation Confirmation Submitted by Hyundai Engineering & Construction and Samsung C&T

First Head-to-Head Since 2009... Both Companies Express Strong Will to Win the Project

Samsung C&T and Hyundai Engineering & Construction, ranked first and second in construction capability evaluation, are set to compete for the construction rights of the Hannam District 4 redevelopment project in Yongsan-gu, Seoul. Amid a trend in the construction industry toward selective bidding for redevelopment projects, this marks a rare competitive landscape. It is the first direct competition between the two companies in 15 years, since 2009.

A view of the alley in Hannam 4 District, Yongsan-gu, Seoul. (Photo by Kim Hyemin)

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According to the Hannam District 4 association on the 8th, only Hyundai Engineering & Construction and Samsung C&T submitted bid participation confirmations by the deadline the previous day. The bid participation confirmation is a pre-bid procedure to confirm participation, and companies that do not submit it cannot participate in the main bid. As a result, the competition for the contractor has effectively narrowed down to two companies.

The maintenance industry is paying attention to the rare formation of a competitive bidding structure. The number of maintenance projects selecting contractors through competitive bidding has sharply decreased this year. Nine out of ten sites have selected contractors through private contracts without competition. Only two sites?Yeouido Hanyang Apartment reconstruction and Dogok Gaepo Hanshin reconstruction in Gangnam-gu?have proceeded with competitive bidding. Among redevelopment zones, Hannam District 4 is likely to become the first such case. An industry official said, "With its location overlooking the Han River and a relatively large number of general sales units, Hannam New Town is considered highly profitable, attracting strong interest from competitors."

Particularly, the fact that the top two companies in construction capability evaluation are competing has heightened market interest. The last time Samsung C&T and Hyundai Engineering & Construction competed for construction rights was in 2009 for the Bucheon Dodang 1-1 District redevelopment, where Hyundai Engineering & Construction won. In Seoul, the last competition was the Jeonggeum Village reconstruction in Dongjak-gu in 2007, which Hyundai Engineering & Construction also won, leading to the construction of 'Isu Hillstate.'

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Both companies are showing strong determination to win the Hannam District 4 project, and given the long-term preparation, the market finds it difficult to predict the outcome. Samsung C&T, which has been selectively bidding for major projects, has been preparing its proposal for two years and is actively pursuing the project. At a site briefing held at the association office late last month, more than a dozen employees displayed a banner reading "The best location, Hannam District 4. We will share a brilliant future together." Samsung C&T plans to highlight its experience constructing landmark complexes such as Raemian One Bailey and Raemian One Pentas.

Hyundai Engineering & Construction has also been focusing on District 4 since winning the adjacent Hannam District 3 project. The company intends to combine Hannam Districts 3 and 4 to create its high-end brand "The H Town." They emphasize that redeveloping the two districts together can reduce construction costs such as civil engineering expenses.

As the contractor selection approaches, the competition is becoming increasingly heated. The two companies have already engaged in a war of nerves over the wording of the bid announcement before its release. Controversy over illegal promotional activities continues as well. Since the 20th of last month, Hannam District 4 has completely banned individual promotions by construction companies to association members. If caught even once, the company is disqualified from bidding under a "one-strike-out" policy. An industry official stated, "Allegations of illegal individual promotions continue to surface, and whether violations are detected could be crucial in the contractor competition."

The Hannam District 4 redevelopment project involves building a large-scale complex of 51 buildings, 2,331 units, with 7 basement and 22 above-ground floors in the Bogwang-dong 360 area of Yongsan-gu. Of these, 1,981 units will be sold to the general public, excluding 350 public rental units. The total project cost is KRW 1.5723 trillion. The association will close the main bid on the 18th of next month and hold a general meeting on January 18 next year to select the final contractor.