The Ministry of Land, Infrastructure and Transport asked the Ministry of Economy and Finance again to rule on sanctions against Hyundai E&C as a dishonest contractor after the company pulled out of the Busan Gadeokdo new airport project. The Ministry of Economy and Finance had earlier determined it would be "difficult to designate Hyundai E&C as a target for sanctions." But after the Ministry of Government Legislation replied that "sanctions on Hyundai E&C should be decided by the ministry in charge of the statute after determining the facts," the Ministry of Economy and Finance is once again set to make the judgment.
On the 17th, according to the Ministry of Land, Infrastructure and Transport (MOLIT) and the Gadeokdo New Airport Construction Corporation, MOLIT was confirmed to have again asked the Ministry of Economy and Finance (MOEF) to interpret the law on whether Hyundai E&C could be sanctioned as a dishonest contractor. MOLIT wrote out the facts that Hyundai E&C lacked grounds for its nonparticipation in the project, such as failing to conduct borehole drilling for the runway site, and again requested the MOEF to interpret the State Contracts Act. If it is acknowledged that Hyundai E&C fell short on the related reviews needed to decide to cancel its participation, sanctions as a dishonest contractor that restrict public bidding are likely.
A MOLIT official said, "The Ministry of Government Legislation recently replied that (whether Hyundai E&C can be sanctioned) is 'not a matter of statutory interpretation but one that concerns recognition of specific facts,' and that the ministry in charge of the statute should decide on whether designation as a dishonest contractor is possible, so we clearly wrote out the facts and again requested a legal interpretation from the MOEF."
Earlier, Hyundai E&C was selected in Oct. last year as the preferred bidder for the site preparation work of the Gadeokdo new airport. After a competitive bid failed, Hyundai E&C sought to participate in the project via a negotiated contract. However, Hyundai E&C and MOLIT could not narrow differences over the 84-month construction period proposed by MOLIT, and in May the company declared it would not participate. Hyundai E&C argued for a 108-month construction period.
MOLIT, judging that Hyundai E&C's mid-project withdrawal would disrupt the opening of the Gadeokdo new airport in 2029, moved to designate Hyundai E&C as a dishonest contractor under the State Contracts Act. To that end, it asked the MOEF to interpret whether sanctions against Hyundai E&C were possible, but the MOEF offered a general reading that "it is difficult to designate Hyundai E&C as a target for sanctions."
Even so, the MOEF left room for discipline, saying, "This was interpreted solely on the basis of the facts provided by MOLIT," and, "Whether there is a duty to conclude a contract, whether there is a justifiable reason for not concluding a contract, and whether there was interference related to the contract conclusion, among other factors, are judged by comprehensively considering each individual case."
Following the MOEF's statutory interpretation, criticism continued in the National Assembly that "the facts were not properly written." Kim Do-eup of the People Power Party said during the Oct. audit, "Hyundai E&C did not conduct a single borehole drilling survey of the runway site during the six months of basic design," adding, "This is a clear breach of contractual obligations and a violation of the State Contracts Act." Because of this, MOLIT again asked the Ministry of Government Legislation to interpret the law on whether sanctions against Hyundai E&C are possible.
In re-requesting the legal interpretation from the MOEF, MOLIT specified that Hyundai E&C's decision to withdraw from the project was made with inadequate related reviews. A MOLIT official said, "We did not describe the facts in detail in the first request for legal interpretation, and we were criticized for that during this year's audit," and added, "We supplemented concrete facts (that Hyundai E&C falls under a dishonest contractor under the State Contracts Act) and asked for the MOEF's judgment."
The official emphasized, "Hyundai E&C gave MOLIT confidence regarding contract conclusion. Yet during the basic design process, it did not conduct an offshore ground borehole survey, submitted a 108-month schedule, and although it had to comply with the bidding conditions, it did not do so without a justifiable reason, so we also see obstructive acts."