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Hyundai E&C withdraws from Gadeok airport project
A rendering of a planned airport on Gadeok Island in Busan / Courtesy of Busan Metropolitan Government
By Ko Dong-hwan
Hyundai Engineering & Construction officially announced Friday its withdrawal from the site preparation project for a new airport on Busan's Gadeok Island.
The exit of the preferred contractor has raised concerns that the construction timeline for the airport could face significant delays. The government had selected the consortium — comprising Hyundai E&C, Daewoo E&C and POSCO E&C — as the preferred bidder last year after four failed rounds of competitive bidding.
“Despite our efforts to ensure safety and quality, it has become impossible to secure the necessary construction period to guarantee safety. We have decided not to participate in the site preparation project for the Gadeok Island new airport,” Hyundai E&C said in a press statement.
“It is unacceptable to comply with unreasonable demands and conditions to shorten the construction period, driven by regional and political interests, which compromise the safety of the airport.”
The project, which includes the construction of a runway and breakwaters, carries a budget of 10.53 trillion won ($7.63 billion). A preliminary feasibility study initially projected the airport's opening in June 2035. However, to support Busan’s failed bid to host the 2030 World Expo, the government advanced the timeline, targeting a preliminary opening in December 2029 and full completion by 2031.
In April, the consortium submitted a basic design estimating a 108-month, or nine-year, construction period — two years longer than the 84-month timeline set by the Ministry of Land, Infrastructure and Transport. Under this plan, completion would be delayed to 2035.
In response, the ministry announced on May 8 that it had begun the process of halting the negotiated contract procedures with Hyundai E&C.
Hyundai E&C reiterated that extending the construction period was unavoidable.
“During the design process, we calculated an appropriate construction period, taking into account the scale of the project — an excavation volume three times that of Mount Nam in Seoul and a development area 2.3 times the size of Yeouido — making it one of the most challenging construction projects in the country,” the company explained.
“The government's unreasonable demand to shorten the schedule is directly tied to public safety and is a line we cannot compromise on under any circumstances.”
However, Hyundai E&C clarified that the decision was made unilaterally and does not reflect the position of the entire consortium.
"By relinquishing all rights related to the consortium, Hyundai E&C aims to allow the consortium to remain intact and continue participating in the project, thereby minimizing potential delays," the company said.
With Hyundai E&C, the lead company in the consortium, making a sudden decision to withdraw, the other participating firms are also reportedly reconsidering their positions.
The transport ministry said that Hyundai E&C’s withdrawal from the project has not changed its position.
“Apart from Hyundai E&C’s decision, there has been no change in our stance,” a ministry official said. “We will continue with the process of halting the negotiated contract and pursue measures to normalize the project.”