2023-12-30 01:27:29
The Dunchon Jugong Construction Team and the redevelopment association, which had been engaged in a tug-of-war over additional construction costs, reached an agreement on a 12% reduction in the amount. Photo = Reporter Kang Min-seok kms@newsway.co.kr
With just over a year left until the completion of the Dunchon Jugong reconstruction (Olympic Park Foreon) in Gangdong-gu, Seoul, the construction project group Hyundai Engineering & Construction Consortium and the Dunchon Jugong Redevelopment Association concluded negotiations on additional construction costs.
According to related industries on the 30th, the construction business group and the Dunchon Jugong Redevelopment Association decided to pass and accept the agenda for changes in additional construction costs discussed with the construction business group at the extraordinary general meeting of union members on the 27th. The changed amount was 998.5 billion won, a 12% decrease from the original 1.1385 trillion won.
Previously, the construction business team and the Dunchon Jugong Reconstruction Association requested verification of the additional construction cost of 1.1385 trillion won from the Korea Real Estate Board. However, in June, the Korea Real Estate Board concluded that KRW 162.1 billion, or regarding 14% of the additional construction cost, should be reduced by KRW 37.7 billion, while it concluded that verification of the remaining amount of KRW 976.4 billion was impossible.
The Korea Real Estate Board said, “In the case of financial cost losses due to delayed sales, there is no agreement between the cooperative and the construction company on standards for calculating financial costs such as sales price, sales point, down payment schedule, and applicable interest rates, and the liability ratio due to delayed sales. “It is difficult for the verification agency to arbitrarily make a decision due to differences of opinion,” he said. “In the case of the price increase due to recommencement of construction, there is a dispute over the ratio of responsibility for construction interruption, so the verification agency cannot arbitrarily set a specific standard and responsibility ratio to calculate the amount. “It was not included in the target,” he explained.
Accordingly, the construction team and the union continued to negotiate, engaging in a tug-of-war until recently. Ultimately, an agreement was reached on an increase of KRW 998.5 billion, a reduction of KRW 140 billion of the additional construction cost of KRW 1.1385 trillion.
Article 4 of the agreement reached by both sides last year states, ‘If verification by the Real Estate Agency is not possible, the data submitted by the construction business team must be followed.’ For this reason, the union was in a situation where it had to pay a total of 1.1 trillion won in additional construction costs, excluding the 37.7 billion won concluded by Korea Real Estate.
Despite the agreement and the Korea Real Estate Board’s construction cost verification results, the construction business group showed an attitude of actively cooperating with the union’s difficulties by additionally reducing part of the construction cost and reducing the burden on union members.
The construction team decided to help increase the value of Olympic Park Foreon by accommodating the union’s additional requests, such as upgrading the community and landscaping and providing warehouses for each household.
Hyundai Engineering & Construction, the organizer of the Dunchon Jugong reconstruction project, reached a reasonable agreement with an organization dedicated to managing the contracted business site, while also negotiating the construction cost from a general perspective.
An official from Hyundai Engineering & Construction said, “Urban maintenance projects are suffering in various places due to the recent rapid rise in raw material and labor costs, but Dunchon Construction is providing a win-win situation by taking sufficient consideration of areas that the construction business team can compromise on.” “A direction has been agreed upon,” he said. “We will continue to discuss issues with the union through ongoing dialogue and do our best to help union members move in as quickly as possible.”
An official from the union said, “Despite the recent increase in construction costs due to internal and external conditions, many sites across the country are experiencing conflicts with construction companies, the successful completion of this construction cost negotiation can be seen as the result of constant communication between the union and the construction business group.” He said, “We will continue to actively cooperate with the construction team and cooperate to enhance the grandeur of the largest reconstruction complex in Korea.”
The Dunchon Jugong reconstruction is a project to demolish the existing 143 buildings and 5,930 households and rebuild them with 85 buildings and 12,032 households with the highest 35 floors above ground. It will be constructed by Hyundai Engineering & Construction, Hyundai Development Company, Daewoo Engineering & Construction, and Lotte Engineering & Construction, and is scheduled for completion in November next year.
1703920403
#Dunchon #Construction #reaches #agreement #additional #construction #costs…12 #reduction
