Yangcheon District Office in Seoul emphasized "fair competition" to redevelopment business sites in Mok-dong, Sinjeong-dong and Sinwol-dong, where many reconstruction projects are underway, that are about to select construction contractors. As some business sites have recently run into trouble during contractor selection procedures in Apgujeong District 5 in Gangnam District, Seoul, and Sangdaewon District 2 in Jungwon District, Seongnam, the district appears to have begun crackdowns on business sites within its jurisdiction. In particular, it called in business sites pursuing reconstruction through the trust method to separately explain how they differ from union-led projects and urged them to prevent overheated bidding by contractors.
According to the redevelopment industry on the 23rd, Yangcheon District recently sent an official letter titled "Thorough guidance on eradicating illegal promotional activities by contractors in redevelopment projects and protecting personal information" to reconstruction unions and project implementers (trust companies), as well as to committees promoting reconstruction union establishment within the district. The district wrote in the letter, "Even though the contractor selection procedures have not fully begun at some business sites in the district, there have been complaints after personnel presumed to be contractors (or public relations agencies) illegally obtained the personal information of land and other owners and attempted illegal one-to-one promotions," adding, "To ensure fairness in redevelopment projects and prevent invasions of privacy for union members (owners), please exercise the utmost care in managing personal information and regulating contractor promotions."
As concerns about project delays have emerged due to overheated competition in the contractor selection processes at some reconstruction business sites such as Apgujeong District 5 and Sangdaewon District 2, the district appears to have issued this letter to repeatedly underscore fair competition at business sites within its jurisdiction that are about to select contractors.
Yangcheon District is home to many of Seoul's representative reconstruction business sites. Within the district, 21 complexes are undergoing reconstruction and 45 districts are undergoing redevelopment. In particular, in Mok-dong and Sinjeong-dong, 14 complexes in the Mok-dong New Town, totaling 53,000 households and a project cost of 30 trillion won, are advancing reconstruction. In Sinwol-dong, the Sinwol Siyoung Apartments are pushing a large-scale reconstruction for 3,149 households.
After Mok-dong Complex 6 became the first to enter the contractor selection phase, other redevelopment business sites are also preparing to choose contractors. Major builders such as Samsung C&T, Hyundai Engineering & Construction, Daewoo Engineering & Construction, GS Engineering & Construction, DL E&C, POSCO E&C, and Lotte Engineering & Construction are showing interest.
In particular, on the 14th, Yangcheon District called in trust-method redevelopment project implementers within the district and held a "meeting related to contractor selection." Unlike other districts, Yangcheon has many trust-method redevelopment projects, which involve different content and procedures from union-led projects, so the meeting aimed to prevent confusion before entering the contractor selection phase. It was also reported that the lawful conduct of the contractor selection procedures was addressed at the meeting.
Currently, 8 of the 14 complexes in Mok-dong New Town have chosen the trust method. The Sinwol Siyoung Apartments are also proceeding with trust-method redevelopment. In trust-method redevelopment projects, which can proceed without establishing a union, the trust company funds the project costs on behalf of the union, handles permitting procedures, selects contractors, and manages the overall project.
A district office official said, "Because the basic standards for contractor selection created by the Seoul Metropolitan Government are built around the union method, there are many parts that differ from the trust method," adding, "We held the meeting to explain differences in terminology and procedures from the union method to prevent confusion ahead of contractor selection." The official added, "Redevelopment projects include clauses such as bans on individual promotions to ensure fair competition," and "As many business sites reach the time to select contractors, we have no choice but to closely examine the selection processes."
Following the district office's request, redevelopment business sites are paying close attention to the contractor selection process. That is because if problems arise in contractor selection and permitting, projects could face long delays. An official at a business site in the district said, "We received notices on preventing overheated competition in contractor bidding, invalidating bids if contractors present excessive alternative designs or if misconduct is uncovered," adding, "Because delays immediately translate into higher project costs, we plan to share that the district office is closely watching contractors' bidding battles."