The Ministry of Land, Infrastructure and Transport's 'Seven Unviable Reasons for Gadeokdo Airport', proposed 10 years ago, is gaining attention once again. Hyundai E&C is maintaining its position of not participating in the construction site work for Gadeokdo Airport, despite Busan's proposal to extend the timeline. While the Ministry announced plans to call for new bids soon, skepticism about the construction of Gadeokdo Airport is spreading within the construction industry.
According to the 'Seven Unviable Reasons for Gadeokdo Airport' presented by the Ministry in a preliminary feasibility study in 2016, the construction of Gadeokdo Airport was deemed impossible from seven aspects: safety, constructability, operability, environmental impact, economic viability, accessibility, and aviation demand. At the time, the Ministry pointed out that 'Gadeokdo is an area frequently affected by typhoons, raising concerns about safety during aircraft takeoff and landing due to strong winds and high waves.'
In a report submitted to the National Assembly in 2021, the Ministry also cited the seven unviable reasons, stating that 'failing to oppose the special law for Gadeokdo Airport despite recognizing the issues constitutes dereliction of duty.' However, the government decided to proactively promote the Gadeokdo Airport construction project just days before the April 7 Busan mayoral by-election that year, and the Ministry also accepted this decision.
The construction industry is paying attention to the background of Hyundai E&C, the industry leader, deciding not to participate in the Gadeokdo Airport site preparation work. Although Busan City agreed to extend the timeline for Gadeokdo Airport, Hyundai E&C announced that there would be no change in its position of withdrawing from the project, even if the bidding conditions change, such as an extension.
Busan City argued that it needs to adhere to an 84-month construction period to expedite the airport's opening in 2029, but after the groundbreaking on the 9th, it retreated slightly by stating that it would conditionally accept an extension if the conditions such as ground or climate change. Previously, the Hyundai E&C consortium submitted a basic design plan with a construction period 24 months longer than the bidding conditions, totaling 108 months, with an expected completion date in 2035.
An official from a large construction company said, 'Hyundai E&C's decision to opt out, even though Busan City is willing to accept conditions, suggests that there are indeed problems with the project itself,' adding that 'the other consortium construction companies may have placed some trust in Hyundai E&C when deciding to participate.'
The construction companies participating in the consortium are currently planning to observe the situation. There is a sense of unease as cases of lead companies withdrawing from projects in consortia have been rare. The Ministry has announced a policy to soon organize the bidding conditions for a new call for bids. Since the private contract with the Hyundai E&C consortium does not match the current bidding conditions, it will be suspended.
Kim Jeong-hee, head of the Gadeokdo Airport Establishment Promotion Team at the Ministry, stated, 'The private contract process with the Hyundai E&C consortium will be suspended under the national contract law,' adding that 'prior to the rebidding, we need to negotiate the bidding conditions with Busan City and the construction industry.'
Some are mentioning the possibility of Daewoo E&C, which holds the second-largest equity at 18.0% after Hyundai E&C's 25.5%, serving as the lead company for the rebidding. The consortium includes Daewoo E&C and KOLON GLOBAL (13.5%), both rated among the top ten construction companies in terms of construction capability and holding significant equity. Other companies include Kumho Engineering & Construction, Hyosung Heavy Industries, Dongbu Corporation, KCC E&C, and Ssangyong Engineering & Construction, each with 4% equity, while the remaining 11% equity is held by construction companies based in Busan. After being selected as the preferred negotiation party following four failed bidding attempts, there is a prevalent opinion that a new consortium will be difficult to form.
An official from a participating construction company stated, 'The current design plan that the consortium possesses is optimal, and it will take more than six months for a new consortium to emerge and create a design plan.' They added that 'there is a possibility for Daewoo E&C to absorb the equity that Hyundai E&C has abandoned and lead the project, and I understand that several medium-sized construction companies are interested in participating.'
An official from Daewoo E&C said, 'The construction period will determine the safety of the citizens who will use the future airport,' noting that 'the specific conditions for rebidding must be disclosed before we can decide on participation, and as of now, we cannot determine a yes or no.'