Samsung C&T vs Lotte Construction Fail... A Bland Ending to Gwacheon Jugong 10 Complex Bidding War?

The bidding competition to secure the construction rights for the reconstruction project of Jugong Complex 10 in Gwacheon-si, Gyeonggi Province, is expected to end quietly. Initially, a competitive bid between Samsung C&T and Lotte Engineering & Construction was anticipated, but Lotte E&C did not attend the mandatory pre-bid site briefing. Some speculate that the selection of the construction company for Gwacheon Jugong Complex 10 may be delayed longer than expected.

Perspective view of Jugong Complex 10 Reconstruction in Gwacheon-si, Gyeonggi Province / Image courtesy of Gwacheon-si

According to the maintenance industry on the 6th, the site briefing for selecting the construction company for the Gwacheon Jugong Complex 10 reconstruction project was held at the union office at 2 p.m. on the 5th, attended by Samsung C&T and Daebang Construction. Lotte E&C, which was expected to compete with Samsung C&T, was absent.

Gwacheon Jugong Complex 10, now 40 years since completion, is the last reconstruction complex in the area and is considered highly viable due to its low floor area ratio of 86% and a scale of 632 households with exclusive areas ranging from 84 to 125㎡. Through reconstruction, it is planned to be transformed into a complex with 1,339 households, ranging from two basement floors to 28 above-ground floors.

The bidding competition was initially expected to be between Samsung C&T and DL E&C, but DL E&C withdrew in June after about 10 months of effort, citing worsening project conditions such as rising construction costs. Subsequently, as Samsung C&T was likely to bid alone, Lotte E&C showed interest, changing the dynamics.

Samsung C&T has a track record of reconstructing three complexes in Gwacheon: Jugong Complex 3 (Raemian Sure), Jugong Complex 11 (Raemian Eco Palace), and Jugong Complex 7-2 (Raemian Central Suite). In contrast, Lotte E&C has no prior contract achievements in Gwacheon.

Meanwhile, Lotte E&C attracted attention by announcing a 'detailed bid' that specifies construction costs in detail. However, by not attending the site briefing, their opportunity to bid naturally disappeared, and a direct confrontation with Samsung C&T did not materialize. Lotte E&C explained that after internal deliberation until the last moment, they decided not to submit a bid.

Samsung C&T can now approach the bidding competition with less effort, as it holds advantages over Daebang Construction in terms of recognition and track record. However, the union's bidding participation guide states that "if fewer than two bidders submit proposals or if the bid is not validly established, a reannouncement will be made, and if the bid fails more than twice due to no bids or other reasons, a private contract may be made according to relevant laws," which could introduce variables. Samsung C&T indicated that if the process leads to a private contract, schedule delays are expected.

Meanwhile, the bid deadline for Gwacheon Jugong Complex 10 is the 31st of this month. The bid deposit is 20 billion KRW, of which 5 billion KRW must be paid in cash, and the remaining 15 billion KRW submitted as a performance bond. The construction cost is 7,405,710 KRW per 3.3㎡ (excluding VAT).

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