[비즈한국] The Busan Port Authority (BPA) and the project developer, PQ Construction, are locked in a dispute over design issues at the Busan North Port Transit Center. While the BPA has requested corrections, citing flaws in the transit center's design, PQ Construction claims the BPA is imposing excessive conditions. The conflict has escalated into legal action, leading the court to issue a mediation proposal to both parties. Local interest in Busan is focused on whether the BPA and PQ Construction will accept the court’s mediation or file an objection to continue the legal battle.
The BPA and PQ Construction signed a land sale agreement for the C-1 block in the North Port redevelopment zone in 2016. The key terms stipulated that ownership of the land would be transferred to PQ Construction for the purpose of building a transit center. The design includes a rooftop plaza on the lower levels, which is intended to house a pedestrian walkway connecting the Busan Station pedestrian path to the Busan Port International Passenger Terminal.
However, in June of this year, the BPA suddenly announced its decision to cancel the land sale agreement with PQ Construction. The stated reason was that a design error occurred in the walkway connecting Busan Station to the rooftop plaza, and PQ Construction had failed to properly address the BPA's correction requests. Specifically, the BPA argued that the rooftop plaza was designed to be approximately 3 meters higher than the Busan Station pedestrian path. The BPA maintained that building it as designed would create a slope, inconveniencing the elderly and disabled, and potentially obstruct the view of the Busan Port and Busan Port Bridge.
PQ Construction submitted a revised commitment letter including design modifications, but pushed back, claiming that the BPA was imposing excessive conditions, such as requirements for late penalties and the submission of insurance for completion of demolition. Consequently, the Busan District Court issued a construction suspension order in August, and in September, recommended that the BPA and PQ Construction reach an autonomous agreement.
Negotiations proved difficult, eventually leading to court-led mediation on October 2. According to legal circles, the Busan District Court issued a 'decision in lieu of mediation.' If neither side files an objection within two weeks, the mediation will be finalized. Conversely, if either party objects, the trial will resume. The specific details of the mediation proposal have not been disclosed.
Failure to reach an agreement could result in PQ Construction losing ownership of the C-1 block, which it secured with significant difficulty. As PQ Construction currently has no other major projects besides the North Port Transit Center development, it recorded no revenue last year. In such a climate, losing the C-1 block would cast a shadow over the company's future. The largest shareholder of PQ Construction is Jeong Cheol-won, chairman of Hyupsung Construction. According to audit reports, the company's profitability has recently declined, shifting from an operating profit of 2.4 billion won in 2024 to an operating loss of 600 million won in 2025.
In May of last year, Chairman Jeong Cheol-won expressed his intention to donate 300 billion won for the construction of a domed stadium in the North Port during a seminar. However, it remains questionable whether Chairman Jeong will fulfill his donation pledge if the conflict between PQ Construction and the BPA is not resolved. The construction of the North Port domed stadium is one of the key campaign promises of Busan Mayor Jeon Jae-soo, and it requires vast financial resources. For the city of Busan, it would be better for the conflict with PQ Construction to be resolved.
Even if the two sides reach an agreement, any delays in the process will push back the completion date of the transit center. Bizhankook visited the North Port Transit Center construction site on September 29. While construction appeared to have progressed significantly, no workers were visible, as the Busan District Court had issued a work suspension order in August. Given the high level of interest from the Busan Metropolitan Government in the North Port development, reports suggest there is internal pressure to resume construction as quickly as possible.
The BPA and PQ Construction are reportedly reviewing the court's mediation proposal. When Bizhankook reached out to both parties for comment, the BPA stated it was difficult to provide an official position as no final decision had been reached. PQ Construction also did not provide a specific comment.