Gadeokdo New Airport Back on Track After Cost Dispute... Ministry, Daewoo Consortium Begin Detailed Design

Land Ministry, Gadeokdo New Airport Construction Corporation and Daewoo E&C consortium settle on amending New Airport Special Act

The Ministry of Land, Infrastructure and Transport and the Gadeokdo New Airport Construction Corporation said they had agreed with the Daewoo Engineering & Construction consortium, a preliminary candidate for a negotiated contract for the Gadeokdo New Airport site preparation work, to begin detailed design on November 9. The parties had previously differed significantly over how to account for the price of the early construction work, but are said to have found common ground through negotiations.

The ministry said, "We are beginning detailed design for the site preparation work to ensure the smooth opening of Gadeokdo New Airport in 2035, which will boost the global logistics competitiveness of Busan and the southeastern region in preparation for the era of Arctic shipping routes and support balanced national development."

Bird's-eye view of Gadeokdo New Airport. Provided by Busan Metropolitan City.

After Hyundai Engineering & Construction, the lead company in the consortium originally responsible for the site work, withdrew, Daewoo Engineering & Construction took the lead in selecting a preferred bidder again and has since carried out basic design work. Costs surged ahead of the main contract, creating a problem: there is no legal basis for covering additional costs incurred before the main contract is signed, even if they are higher than expected. During negotiations, some construction companies also indicated they might withdraw from the consortium because of concerns that the sharply increased construction costs might not be reflected in the contract.

The ministry said it is consulting with the National Assembly on amending the Gadeokdo New Airport Act so that inflation can be reflected in construction costs. It said on November 9 that it aims to have the amendment passed by the National Assembly by the end of 2026. The ministry had initially considered revising the relevant guidelines, but appears to have settled on amending the law, citing the need to ensure fair treatment compared with other projects. The ministry said, "We plan to continue discussions with Daewoo Engineering & Construction so that the contract for the early construction work, linked to the law amendment, can be signed by the end of 2026 to ensure the smooth progress of the main construction work in 2027."

The detailed design that began on November 9 will continue for 180 days. The ministry and the corporation said they aim to begin the main construction work in the first half of 2027, after completing the detailed design and following procedures such as a review of the design's appropriateness.

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