With the government extending the timeline for preparing the site for "Gadeokdo New Airport," it plans to issue a new bid notice as early as this year and again seek a preferred negotiating partner. Hyundai E&C, which withdrew saying the construction period was too short, drew a line that it will not participate again despite these changes in conditions, while Daewoo E&C is emerging as a strong next candidate.
According to the industry on the 24th, the Gadeokdo New Airport Construction Corporation will hold a "business briefing session for the Gadeokdo New Airport site preparation construction" on the 26th in Nam District, Busan. The briefing will mention an overview of the site preparation work for Gadeokdo New Airport, the construction period and amount, key contents of the bidding guide, and the schedule. The session is for domestic construction and engineering companies, and they must submit a pre-registration application by the 25th.
Why has Gadeokdo New Airport, which should have started the main construction around now under the original plan, gone back to the beginning to conduct bidding again? The site project for Gadeokdo New Airport involves building a runway and breakwaters, with a budget in the 10 trillion won range. However, the bidding failed four times. Because the project must be built across land and sea, the construction difficulty is high; the joint contracting requirement was limited to two of the top 10 builders; and conditions such as the short construction period were unfavorable.
In the end, the Ministry of Land, Infrastructure and Transport and the Public Procurement Service eased joint contracting to three companies and shifted to a private contract, selecting a consortium led by Hyundai E&C as the target in Oct. last year, a year earlier. Looking at the initial consortium composition, among the top 10 builders were Hyundai E&C (equity 25.5%), Daewoo E&C (18%), and POSCO E&C (13.5%). In addition, Kumho E&C, HL D&I Halla, Kolon GLOBAL, Dongbu Corporation, KCC E&C, Ssangyong E&C, BS Hanyang, and Hyosung Heavy Industries each held 4% equity. The remainder were Busan-area builders, holding 11% equity. This consortium was so committed that it bid alone without competitors from the second tender on.
The issue arose when the Hyundai E&C consortium, after conducting basic design for six months, proposed to the Ministry of Land, Infrastructure and Transport in Apr. to extend the duration to 108 months (9 years), 24 months longer than the original 84 months (7 years). The Ministry of Land, Infrastructure and Transport rejected this, saying it "does not meet the bidding conditions." Ultimately, Hyundai E&C, the lead company, declared in May that it would not participate and withdrew from the consortium. Although the ministry, after six months, extended the period to 106 months (8 years and 10 months), similar to what Hyundai E&C proposed, Hyundai E&C has said it "has no plans to participate again."
Accordingly, the Gadeokdo New Airport site preparation will likely proceed with other builders remaining in the consortium, excluding Hyundai E&C. In the industry, Daewoo E&C is seen as the leading candidate to head the project. Daewoo E&C holds the second-largest equity after Hyundai E&C in the previously selected consortium. It also has experience serving as the lead company in several airport projects, including the site preparation for the new metropolitan area international airport and the southern civil engineering facilities of the Incheon International Airport first runway area.
For this reason, there is speculation that a new consortium will be formed centered on Daewoo E&C. An industry official said, "At the re-bid, it is expected that joint contracting by top 10 builders will also be allowed for up to three companies," adding, "Among large builders, Lotte E&C and Hanwha E&C are likely to participate, and HJ Shipbuilding & Construction, which has extensive collaboration experience with Daewoo E&C, is also expected to join." POSCO E&C, which had the third-largest equity in the consortium, withdrew after suspending new infrastructure order activities following a series of fatal on-site accidents this year.
However, many issues still need to be resolved. The planned site for Gadeokdo New Airport has thick layers of weak marine ground, raising the possibility of differential settlement of the land and sea runways, and depending on equipment fabrication and site conditions, the schedule and expense may further increase after groundbreaking. Although the duration has been extended by nearly two years this time, the construction amount rose by only 200 billion won, from 10.5 trillion won to 10.7 trillion won, reflecting inflation, leading to analysis that the incentive to participate is weak.