Gyeonggi Housing & Urban Development Corporation and Pyeongtaek Urban Development Corporation Notify Termination of Project Agreement to Preferred Negotiation Partner in Hyunduk District Development Project

[Suwon Ilbo=Park No-hoon Reporter] The Gyeonggi Housing & Urban Development Corporation (GH) and Pyeongtaek Urban Development Corporation notified the Daegu Bank Consortium, which had been selected as the preferred negotiation partner for the Hyunduk District development project in Pyeongtaek, of termination of the project agreement on the 12th and 18th respectively, citing reasons including failure to submit the project agreement performance guarantee.

Gyeonggi Province (Gyeonggi Free Economic Zone Authority) held a public recruitment of private contractors to promote the Hyunduk District development project through a public-private joint development method, and in December 2020 selected the Daegu Bank Consortium, comprised of seven corporations including Daegu Bank, as the preferred negotiation partner and proceeded with the project.

In February 2021, the Gyeonggi Housing & Urban Development Corporation (GH) and Pyeongtaek Urban Development Corporation concluded a project agreement with the Daegu Bank Consortium and agreed to submit a guarantee certificate equivalent to a performance deposit of 12.9 billion won for the project agreement.

The Gyeonggi Housing & Urban Development Corporation (GH) and Pyeongtaek Urban Development Corporation received the first guarantee certificate (6.9 billion won) and proceeded with negotiations on shareholder agreement conclusion for establishment of the project implementation entity (PFV).

However, the Daegu Bank Consortium failed to comply with key terms of the project agreement signed in February of last year, including 'announcement of compensation plans for the upper and lower halves of 2021 and commencement of compensation consultation' and 'submission of the second project agreement performance guarantee (6 billion won) by the end of 2021'.

The Gyeonggi Housing & Urban Development Corporation (GH) notified the Daegu Bank Consortium on two occasions in December of last year that it corresponded to 'grounds for agreement termination in case of failure to fulfill conditions,' but this was not fulfilled.

Accordingly, the Gyeonggi Housing & Urban Development Corporation (GH) and Pyeongtaek Urban Development Corporation notified the Daegu Bank Consortium, a party to the project agreement, of the 'termination of project agreement' on the 12th and 18th respectively and informed the Gyeonggi Free Economic Zone Authority of this fact.

Upon receipt of the project agreement termination documents from the two public sector institutions, the Gyeonggi Free Economic Zone Authority plans to review whether to cancel the selection of the preferred negotiation partner.

In addition, to explore future implementation directions for the Hyunduk District development project, it plans to closely cooperate with related agencies including Pyeongtaek City.

Meanwhile, the Hyunduk District development project is being promoted at a scale of 2.316 million square meters in the Jangsu-ri and Gwongwan-ri areas of Hyunduk-myeon, Pyeongtaek, with the Gyeonggi Housing & Urban Development Corporation (30%+1 share) and Pyeongtaek Urban Development Corporation (20%) planned to share equity with the private contractor (50%-1 share) and proceed with the project.