This second half of the year, the Seoul maintenance project market is seeing the emergence of massive projects worth 2 to 3 trillion won, yet competition among construction companies for contracts is becoming increasingly rare. Multiple firms may attend project briefings, but often only one bids, leading to a pattern of single bids after failed attempts and re-bidding.
According to the maintenance industry on August 12, among 25 bids for Seoul maintenance projects involving the top 10 construction companies from January to July this year, only three had actual competition among multiple firms. This trend is attributed to rising construction and financing costs, as well as large firms focusing their efforts on projects with higher profitability and bidding potential.
On August 10, the first bid for the reconstruction of Mokdong Apartment Complex 10 in Yangcheon District was rejected after only Hyundai Engineering & Construction submitted a bid. The project aims to rebuild the existing 2,160 units into 4,248 units, with an estimated construction cost of 2.6135 trillion won. Although six construction companies attended the briefing, only Hyundai submitted a bid. Korea Land Trust plans to participate in a second bidding round, and if competition does not materialize, a negotiated contract may be pursued.
The scale of projects emerging in the second half of the year is unprecedented. Mokdong Complex 13 has an estimated construction cost of 2.3763 trillion won, while the Seongsu Strategic Maintenance Zone 2 has 2.0137 trillion won, and Seongsu District 3 is estimated at 1.8275 trillion won. The combined total for the five major projects, including Mokdong Complexes 10, 12, and 13, and Seongsu Districts 2 and 3, reaches approximately 10.62 trillion won.
Additionally, Mokdong Complex 14, the largest reconstruction project in the area, is expected to exceed 3 trillion won in construction costs as it aims to increase the number of units from 3,100 to 5,123. The bidding process is underway, targeting a contractor selection announcement in September. If the project proceeds as anticipated, it could become the largest maintenance project of the second half of the year, with Hyundai Engineering & Construction, DL E&C, and Daewoo Engineering & Construction among the potential bidders.
The Yeouido Shimbun Apartments will also close bids for contractors on the 25th. The project involves the reconstruction of 2,491 units, with an estimated construction cost of about 1.5 trillion won, and a briefing in May attracted seven construction firms, including Samsung C&T and GS Engineering & Construction.
However, contrary to initial expectations that larger project sizes would intensify bidding competition, competitive tenders are actually diminishing. Construction firms are now focusing their resources on one or two projects based on their bidding potential and profitability rather than pursuing every large opportunity.
Seongsu District 3 exemplifies this trend. While the first briefing attracted Samsung C&T, Kumho Construction, and Jeil Construction, only Samsung C&T attended the second briefing for re-bidding. With two rounds of competition failing to materialize, the likelihood of a negotiated contract with Samsung C&T has increased.
In contrast, Seongsu District 2, which closes bids on the same day, still holds potential for competition. Last month’s briefing saw DL E&C and IPARK Hyundai Industrial Development in attendance, with industry insiders noting that DL E&C is taking a more proactive approach, though actual competition will depend on the bid deadline.
On the same day, the Mokdong Complex 12 briefing included GS Engineering & Construction, Daewoo Engineering & Construction, POSCO E&C, and IPARK Hyundai Industrial Development. GS Engineering & Construction has been particularly active, revealing a specialized design in collaboration with a global design firm. The bid guarantee is set at 80 billion won.
An industry insider stated, “To bid on a large project, companies must prepare cash guarantees in the hundreds of millions of won, along with significant costs and manpower for design, financing conditions, and member benefits. In Mokdong, the simultaneous contractor selections for 14 complexes are proceeding faster than expected, making it difficult for even large construction firms to respond to all projects.”
* This article has been translated by AI.
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