Gadeok airport project faces mounting uncertainties
An illustration of an airport planned for construction on Gadeok Island in Busan / Courtesy of Busan Metropolitan City
A new airport construction project on Busan’s Gadeok Island is facing increasing uncertainties, as the government's attempt to secure builders for the initial phase of site preparation has failed for the third time.
The Ministry of Land, Infrastructure and Transport announced Monday that the third attempt to secure a construction contract for the Gadeok Island project, situated in the southwestern waters of Busan, was unsuccessful due to a lack of candidates. Only a consortium led by Hyundai Engineering and Construction (E&C) submitted a bid.
Regulations mandate that competitive bidding is a requirement for state contracts. As a result, the ministry initiated a fourth bid through the Public Procurement Service starting Tuesday. The deadline for applications is Sept. 5.
"We aim to foster fair competition among companies to single out the most competent firms," the ministry said.
"Once we select the final bidder, we will focus on completing the airport before the end of 2029. We plan to shorten the construction timeline by utilizing the most advanced automated construction equipment and cutting-edge building technologies."
The authority's plan to open the airport in 2029 is facing growing concerns following the latest unsuccessful bid. The first round of bidding in early June saw no applicants. In the second round later that month, Hyundai E&C's consortium was again the sole bidder. In the third round, while more companies joined Hyundai’s consortium — Hyundai E&C holding 25.5 percent, Daewoo E&C 18 percent, and POSCO E&C 13.5 percent — the bid still did not succeed.
Out of the project's total budget of 14.49 trillion won ($10.88 billion), the initial phase is expected to cost 10.53 trillion won. Once site preparation is complete, the project will advance with land reclamation around the island, the construction of runways, aprons, terminals, as well as coastal facilities and a bridge connecting the island to the mainland. The entire project is slated for completion within six years of commencement.
After the second bid failed, the ministry relaxed the eligibility requirements for companies forming a consortium. The changes included increasing the number of eligible construction firms from the top two to the top three in the country’s construction performance rankings. Additionally, the overall construction period for the project was extended from six years to seven, and the blueprint design phase was lengthened from 10 months to 12.
Despite these changes, industry observers believe that completing the project will remain a formidable challenge.
“The project’s scale is huge and its difficulty level is high. Also, because of the short construction period, it would be hard for companies willing to compete in the bid to seek partner firms for a consortium,” said an official in the construction sector.
“Moreover, a social overhead capital (SOC) project of this magnitude typically divides the site into multiple sections. However, this project is a single, unified section worth 10 trillion won. The scale alone is likely to deter potential builders.”
Another official noted that due to the repeated delays in the bidding process, the ministry will likely need to push back the projected opening year of the airport as well.