Won 7.5 million non-Gangnam-do per pyeong… Rising construction costs conflict [집슐랭] : Seoul Economic Daily

Amid the rapid increase in construction costs in maintenance projects due to rising labor costs and raw material prices, there have been cases in non-Gangnam areas of Seoul demanding a construction cost of 7.5 million per 3.3㎡. Clashes over construction costs seem to be escalating by the day, with construction companies even filing lawsuits against the union as demands for increased construction costs spread across the country.

According to the maintenance industry on the 14th, Hyundai E&C notified Deungchon District 1 Housing Reconstruction Maintenance Business Association in Gangseo-gu, Seoul to raise the construction cost by 54% from 4.87 million won to 7.5 million won by 3.3 square meter. This project is to rebuild the area around 366-24 and 366-61 in Deungchon-dong with 540 households. After choosing Hyundai E&C as the construction company in October 2019, the union signed a contract at about 4.87 million won per 3.3㎡. However, Hyundai E&C has asked for a significant increase considering the price increase over the past three years. Hyundai E&C explained, “Due to the special characteristics of the long and narrow site in Deungchon District 1, the construction cost was higher than that of other complexes.”

Unions are against it. It is argued that the amount offered by the builder is too high even after considering the increase in price. A union official said, “We have offered to accept up to 6.9 million won per 3.3㎡ in four negotiations, but we have not yet narrowed the difference with the builder.” He pointed out that the person’s details are not shown correctly. “

The Gwangmyeong 5R district redevelopment project jointly built by GS E&C, Hyundai E&C and SK Eco Plant is also experiencing conflict over rising construction costs. This is because the construction cost signed by the construction team and the association in December 2021 was about 4.89 million won per 3.3㎡, but about a year later, it is currently offering 6.3 million won . After negotiations, the union suggested 5.7 million won per 3.3㎡ and the construction team suggested 5.97 million won, narrowing the differences, but a final agreement has not yet been reached. An official from the association said, “The contract states that the construction cost should be raised in line with the rate of increase in the consumer price index until the start of construction, but if this is applied, the construction cost will be earned of 5.3 million per 3.3㎡. “I offered 5.7 million won, but the construction team is not accepting it.” GS E&C, the organizer of the construction team, said, “At the time of starting construction, we analyzed the geological trend within the site, and it was confirmed that the size of the banks was increasing due to the excessive rocky area.”

Conflicts between construction companies and unions over construction costs have even gone to court. Gyobang District 1 (Changwon Prugio The Platinum) in Changwon, jointly built by Daewoo E&C and Ssangyong E&C, is a representative example. The construction team requested an increase in the construction cost worth 6.4 billion won by the Gyobang District 1 Redevelopment and Maintenance Project Association, but the association refused and eventually filed a lawsuit for the construction payment last year. Daewoo E&C said, “According to the contract, the construction cost is to be increased by reflecting the rate of change in the consumer price index until the start of construction.” The court is expected to hold its first hearing at the end of this month. An official from the association explained, “Since the result of the trial has not come out, we will respond according to the result.”

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