Drifting or Progressing... Selection of Construction Company for Bangbae Shinsamho on the 26th

[Financial News]  The Bangbae Shinsamho Apartment Reconstruction Association in Seocho-gu, Seoul, will begin selecting a construction company this month. This general meeting is expected to be a turning point in normalizing the association's operations, which were unsettled due to the dismissal of the association president and rumors of participation by a specific construction company, and in determining whether the project will drift for a long time.
According to the maintenance industry on the 14th, the Bangbae Shinsamho Apartment Reconstruction Association will hold a general meeting of members on the 26th to select a construction company. 
Previously, the association designated HDC Hyundai Development as the preferred negotiator through a private contract after two competitive bids for selecting a construction company failed. Subsequently, some emergency committees raised allegations of interference in competitive bidding by the association and rumors of Samsung C&T's participation, which intensified conflicts within the association, ultimately leading to the dismissal of the third-term president. The rumor of Samsung C&T's participation was confirmed to be false, and the incident was settled.
If a construction company is confirmed at this general meeting, the project can proceed with the approval procedures, such as integrated review, within the year. However, if the selection of a construction company fails, the bidding process must be restarted from the beginning, raising concerns about increased financial costs due to project delays and the application of the maintenance project sunset clause. 
Within the association, there is a growing consensus that "confirming a construction company is crucial for the subsequent procedures, such as project implementation plan approval and management disposition plan establishment, to be fully initiated, making this general meeting a critical turning point for the association's future."
HDC Hyundai Development is known to have proposed conditions to the association, including a construction cost of 8.76 million won per pyeong, approximately 700,000 won cheaper than nearby areas, a project cost interest rate of CD+0.1%, a relocation loan LTV of 100%, and a project promotion fee of 200 billion won.
Meanwhile, the Bangbae Shinsamho reconstruction project was first designated as a maintenance area in 2016 and received approval for association establishment in 2019. However, the project has been stalled several times due to conflicts with the first and second executive bodies, failed bids, and the dismissal of the third-term president.




going@fnnews.com Choi Ga-young Reporter