[Report] GS Geonseol Facing 'Business Suspension', All-Out Effort to Secure 500 Billion Won Garak Plaza Contract

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On the morning of the 29th, a large banner posted by GS Construction and Hyundai Engineering was prominently displayed on the exterior wall of an apartment at the entrance of the Garak Plaza complex in Garak-dong, Songpa-gu, Seoul. The GS Construction banner caught the eye with the phrase “All-New (NEW) Xi, New Determination · Promise · Start,” seemingly promising a complete break from its previous image of poor construction. On the other hand, Hyundai Engineering’s banner on the opposite apartment wall emphasized safety and trust. With the bidding scheduled for the 20th of next month, the industry expects a two-way competition between GS Construction and Hyundai Engineering.

On the 29th, I visited Garak Plaza Apartment in Songpa-gu, Seoul. Large banners from GS Construction and Hyundai Engineering stood out on both sides.
[Photo by Kwak Minjae]

Amid GS Construction’s 10-month business suspension penalty due to poor construction at the Geomdan Apartments in Incheon, attention is focused on the Songpa-gu Garak Apartments reconstruction bidding. Since this bidding is the first after the GS Construction poor construction controversy, it could serve as a litmus test to gauge whether the company can make a comeback in future urban maintenance projects. There are concerns that failing to secure the construction rights could solidify a negative image, but success could open doors to other bids. GS Construction is reportedly aiming to win bids for Noryangjin 1 District, Hannam 4 District, and Mia 2 District within this year.

Initially, there were predictions that GS Construction would be at a disadvantage in the Garak Plaza project bidding due to the 10-month business suspension caused by the rebar omission incident. However, the actual site visit revealed a tense atmosphere where predicting the winner was difficult. A union member, Mr. A, whom we met at the apartment complex, said, “Although GS Construction received a 10-month business suspension from the government, the final decision takes 3 to 5 months, and if they file for a provisional injunction to suspend execution, they can delay for several years, so the business suspension itself may not have a significant impact on the bidding.”

Another union member, Mr. B, regarding safety concerns, said, “GS Construction put up a banner in front of the complex stating they will proceed with a new determination after the underground parking lot collapse accident at the Geomdan Apartments in Incheon,” adding, “If they use that incident as a stepping stone to strengthen safety, wouldn’t that be a good thing?”

A view of Garak Plaza Apartment in Songpa-gu, Seoul, visited on the 29th.
Photo by Kwak Minjae

The reason union members’ opinions are not leaning heavily toward one side despite GS Construction’s poor construction controversy is that GS Construction is mounting an “all-out effort” to win the bid. In fact, GS Construction has been steadily cultivating grassroots support such as apartment women’s associations for the past 2 to 3 years. A union official, Mr. C, said, “Unlike other construction companies, GS Construction’s site staff have not changed for 2 to 3 years and have consistently visited,” adding, “That sincerity seems to have a somewhat positive effect on the residents.”

He continued, “Many residents here are elderly, so showing rather than explaining is more effective for persuasion,” and hinted, “I understand GS Construction is making efforts to dispel safety concerns by visiting the Xi model house in Daechi-dong together with the residents.”

However, since Hyundai Engineering is also actively pursuing the bid, predicting the outcome is not easy. In particular, Hyundai Engineering is reportedly promoting aggressively by introducing its high-end brand “The H” to win the Garak Plaza project. If successful, Garak Plaza will be the first complex where Hyundai Engineering applies The H brand.

The banner of Hyundai Engineering installed within the Garak Plaza apartment complex emphasized financial capability.
Photo by Kwak Minjae

Hyundai Engineering is also emphasizing its financial capability since the Garak Plaza reconstruction project is being promoted as a joint project implementation method. The banner installed in the apartment complex highlighted “Industry’s lowest debt ratio of 63.3%, highest credit rating AA-.” A resident in his 60s said, “Since the Garak Plaza reconstruction project is a joint project implementation method, the higher the construction company’s financial capability and credit rating, the lower the burden on residents,” adding, “Isn’t GS Construction the company that omitted rebar? Since its financial stability has deteriorated, it is indeed a concern.”

Meanwhile, Garak Plaza was completed in 1985 and is now 38 years old. The Garak Plaza reconstruction project involves transforming the existing 672 households in 11 buildings on a 45,808.8㎡ site at 125 Munjeong-ro, Songpa-gu (Garak-dong) into 12 buildings ranging from 3 basement floors to 34 above-ground floors, with 1,068 households and auxiliary facilities. The expected construction cost is 7.8 million KRW per 3.3㎡, with a total estimated cost of 505 billion KRW.

This content was produced with the assistance of AI translation services.