Exclusive
Samsung C&T Sole Attendee at Apgujeong District 4 Re-bidding Site Briefing… Private Contract Imminent

[비즈한국] Samsung C&T028260 has moved one step closer to securing the construction rights for the Apgujeong District 4 reconstruction project in Gangnam-gu, Seoul. By being the sole attendee at the site briefing for the re-bidding of the Apgujeong District 4 contractor selection on the 8th, the possibility of the Apgujeong District 4 union entering into a private contract with Samsung C&T has increased. The previous first round of bidding also fell through as Samsung C&T was the only participant. It appears that the first major battleground of the Apgujeong reconstruction is being settled without competitive bidding.

According to the maintenance industry on the 8th, Samsung C&T was the sole attendee at the site briefing for the re-bidding of the Apgujeong District 4 reconstruction project contractor held at 9 a.m. that day. According to the Apgujeong District 4 re-bidding notice, construction companies intending to participate in the bid must attend the site briefing on this day to receive the union's bid participation guide. As a result, this re-bidding has effectively entered the process of failing as well. The previous first round of bidding fell through on the 30th of last month when Samsung C&T was the sole participant. The union issued the re-bidding notice the following day, the 31st.

A private contract between the Apgujeong District 4 union and Samsung C&T has become likely. Under the Urban and Residential Environment Maintenance Act, if a contractor selection bid fails twice or more, the union can select a contractor through a private contract. The union plans to designate Samsung C&T as the preferred bidder and finalize the contractor at a general meeting on May 23. Since Samsung C&T submitted a letter of commitment for responsible completion along with its bid proposal in the first round, observers anticipate that negotiations for a private contract will proceed relatively quickly.

Samsung C&T has been putting significant effort into winning the construction rights for Apgujeong District 4. In March, it established a cooperative system with 18 financial institutions to promote the Apgujeong District 4 project, emphasizing its competitiveness in financing conditions such as project funding and relocation expenses. It also unveiled a plan to transform Apgujeong District 4 into a local landmark complex in collaboration with the global architectural firm Foster + Partners from the UK. Samsung C&T maintains that it will offer differentiated financial conditions based on its AA+ credit rating, the highest among Korea's top 10 construction companies.

Initially, Apgujeong District 4 was considered the stage for the first battle of the Apgujeong reconstruction. Seven companies, including Samsung C&T, Hyundai E&C000720, DL E&C375500, POSCO E&C, Ssangyong E&C, Kumho E&C002990, and Jeil Construction, attended the first site briefing held in February. While there was speculation in the industry about a potential two-way race between Samsung C&T and Hyundai E&C, the first battle for Apgujeong was thwarted when Hyundai E&C decided to focus its capabilities on winning Districts 3 and 5. Some in the industry interpret that the high entry barriers, such as a 100 billion won bid deposit, influenced the failure to form a competitive structure.

The Apgujeong Apartment District in Gangnam-gu, Seoul, is considered the biggest battlefield for maintenance projects this year. Starting with Apgujeong District 4, Districts 3 and 5 will wrap up their first rounds of contractor selection bidding on the 10th. With a construction cost of 2.1154 trillion won, District 4 is the first to select a contractor, and its results are expected to influence the competitive landscape of the remaining districts. Last year, the largest project in the maintenance sector, District 2, was won by Hyundai E&C through a private contract.