Private Contractor Selection Fails Twice
Construction Company Not Found Due to Cost Burden
Seoul City to “Quickly Change Project Method”
Seoul City is set to push forward with the Wirye-Sinsa Line as a public investment project. Despite two increases in the total project cost, no participants have come forward.
On the 4th, Seoul City announced that the second re-announcement to recruit a private investor for the Wirye-Sinsa urban railway project resulted in no successful bidders as of October 4th.
The Wirye-Sinsa Line is a light rail route connecting Wirye New Town and Sinsa Station on Subway Line 3. It has been in the works since the planning phase of Wirye New Town in 2008. However, the initial private contractor, Samsung C&T, withdrew in 2016, and the consortium led by GS Engineering & Construction, which was chosen as the preferred negotiator, also gave up on the project, leading to its prolonged stagnation.
In August, Seoul City increased the construction cost from 1.4847 trillion won to 1.7605 trillion won and extended the construction period from 5 to 6 years to attract private contractors. Despite re-announcing the project, they failed to find a new contractor. In the second re-announcement, the project cost was further increased by 4.4% (775 billion won) compared to the first attempt, following the Ministry of Economy and Finance’s ‘Private Investment Activation Plan’, which allowed for an increase of up to 4.4% in private investment project costs due to cost factors such as rising construction costs. However, construction companies continued to be deterred by the cost burden, resulting in the second failure to secure a contractor.
Seoul City plans to swiftly proceed with the procedure to change the Wirye-Sinsa Line from a private investment project to a public investment project.
[Reporter Kim Yushin]