ED Full-scale rebuilding

HDC Hyundai's decision is necessary to restore public trust.

HDC Hyundai Development has decided to demolish all eight apartment buildings at a complex in Gwangju under construction and rebuild them. The builder decided so, judging that it could hardly dissipate would-be residents' safety concerns if it rebuilds only one partially collapsed building. We hope the decision will ultimately serve as an occasion for the company facing a crisis of trust to change its perceptions of building safety.

It is unusual to tear down substantially constructed apartment buildings and build them all over again, which is the case of Hwajeong I'Park in Gwangju, some 330 kilometers south of Seoul. The developer expects the reconstruction to cost 370 billion won ($294 million) and take about 70 months. However, all these factors could not keep the company from making the unusual decision, believing nothing less would restore the public's confidence.

Since the building's collapse, HDC has faced a significant crisis, with orders already signed being canceled. For example, it lost a contract in Daejeon with a down payment of 1 trillion won. The company was also excluded from the main biddings for new apartment complex projects in Seoul's satellite towns. The central and local governments' administrative steps also threaten the company's survival.

The Seoul Metropolitan Government has recently suspended the company's business for eight months concerning another accident last June, when a five-story building, also in Gwangju, collapsed onto a bus during demolition work supervised by HDC, killing nine bus passengers and injuring eight. Concerning the apartment building collapse, Seoul City Hall notified the company of canceling registration or business suspension for one year.

All this shows any company can be at the crossroads of survival if it fails to take safety seriously. “Our company would be worthless if it fails to secure customers' safety and the public's trust,” HDC Hyundai Chairman Chung Mong-kyu said Wednesday. That should not be a stopgap remark to avoid public criticism and administrative steps. The builder must reshuffle its organization and establish a safety management responsibility system to eliminate shoddy construction practices.