Hyosung Heavy Industries, ILJIN Electric, LS ELECTRIC, and HD Hyundai Electric, among other major domestic power equipment companies, are facing an increased possibility of not receiving government construction orders for the next six months. The amount these companies win from the national and local governments and public institutions accounts for 3% to 17% of their annual revenue, which will significantly impact them if they cannot secure these orders. This amounts to several hundred billion won in total sales.
On the 18th, Korea Electric Power Corporation notified nine domestic power companies that they would be barred from participating in bids ordered by national and local governments and public institutions for six months. The affected corporations include four large companies: Hyosung Heavy Industries, ILJIN Electric, LS ELECTRIC, and HD Hyundai Electric, as well as five mid-sized companies like Cheryong Electric. The bidding restriction period is from the 25th of this month to January 24, 2026.
The Fair Trade Commission revealed that Korea Electric Power Corporation discovered collusion among 10 firms (nine power companies and the Korea Charging and Discharging Cooperative) in bids for 134 gas-insulated switchgear orders placed from March 2015 to September 2022, imposing a penalty surcharge of 39.1 billion won. Gas-insulated switchgear is a device that rapidly cuts off excessive currents in power plants and substations to protect power equipment.
Corporations argue that they have faced excessive measures while disputing the legitimacy of the Fair Trade Commission's decision. Some companies are currently pursuing legal actions to annul the administrative sanctions and have also filed for a temporary restraining order in court after being notified of the bidding restrictions for government construction projects.
ILJIN Electric had the largest proportion of government construction projects in its overall sales last year. The company's government construction project sales last year amounted to 269.5 billion won, making up 17.1% of its total sales of 1.7552 trillion won. Following ILJIN Electric, HD Hyundai Electric had 289 billion won (8.7%), Hyosung Heavy Industries had 395.6 billion won (8.08%), and LS ELECTRIC had 134 billion won (2.94%) in government construction project sales last year.
Concerns have been raised that if major power equipment companies are unable to participate in government construction project bids, it could hinder the replacement of aging transmission networks and the expansion of the grid. In response, an official from Korea Electric Power Corporation stated, "There are companies domestically that manufacture gas-insulated switchgear aside from the nine companies that have faced qualification restrictions due to bid collusion."