[Edaily Reporter Ham Ji-Hyun ] It has been confirmed that the redevelopment association for the Sangdaewon 2 District in Seongnam, Gyeonggi Province—where the project has been delayed due to conflicts over the replacement of the construction contractor—is undergoing a special on-site inspection by the government. Attention is focused on whether this special on-site inspection will serve as an opportunity to verify the appropriateness of the association’s operations and the construction cost contracting process, as well as to resolve the long-standing conflicts at the project site.

According to the urban renewal industry on the 6th, the Sangdaewon 2 District has been included in the second round of special on-site inspections targeting illegal activities by urban renewal associations, a program led by the Ministry of Land, Infrastructure and Transport (MOLIT). Accordingly, a joint on-site inspection by MOLIT, the Korea Real Estate Board, and Seongnam City is scheduled to take place from the 9th to the 20th. Previously, MOLIT conducted a comprehensive survey of 568 urban renewal sites nationwide, identifying 138 sites that had not undergone statutory verification of construction costs. Based on applications from local governments and the survey results, 16 of these sites were selected for special inspections.

During the inspection, the Korea Real Estate Board will review the appropriateness of construction cost calculations and the justification for cost increases, while local governments will examine potential violations of laws, regulations, and association bylaws. External experts will review the association’s operations, budget execution, and procedures for selecting and contracting services. If violations of relevant laws and regulations, such as the Urban Renewal Act, are confirmed, corrective orders and administrative guidance will be issued; if serious criminal allegations—such as embezzlement, breach of trust, or fraud—are discovered, the matter will be referred for investigation.

The first round of special on-site inspections was already conducted from the 19th to the 30th of last month. The Sangdaewon 2 District is included in the second round, which will take place from the 9th to the 20th of this month.

The Sangdaewon 2 District is a large-scale redevelopment project in the Sangdaewon-dong area of Jungwon-gu, Seongnam, involving the construction of 43 buildings up to 29 stories tall, comprising 4,885 households. DL E&C was selected as the general contractor in 2015 and signed a construction contract worth 984.9 billion won with the association in 2021.

Subsequently, conflicts escalated as disagreements between the association and DL E&C intensified over issues such as the application of a high-end brand and the association’s demand to select specific suppliers for key finishing materials. The association pushed for a change in the general contractor and began the process of selecting GS E&C as the new general contractor.

The construction cost proposed by DL E&C is 1.8479 trillion won, an 87.6% increase from the original contract amount. Although DL E&C’s figure is lower than the cost proposed by GS E&C, the association requested a verification from the Korea Real Estate Board to confirm the appropriateness of the cost increase.

However, as the court suspended the effectiveness of the general meeting resolution regarding the change of contractor, DL E&C continues to hold its position as the existing contractor. The conflict between the two sides has escalated into a legal battle. DL E&C filed a complaint with the police, alleging that GS E&C spread false information to association members and used their personal information without authorization.

Internal divisions within the association also persist. The association’s executive board and the emergency response committee are each pushing for the dismissal of members from the opposing side. On the 14th, both sides are scheduled to hold counter-dismissal general meetings, and on the 28th, a general meeting to address issues related to the contractor is scheduled.

However, the Ministry of Land, Infrastructure and Transport has stated that it will not disclose the list of construction sites subject to inspection, out of consideration for the burden on association members and residents. The ministry explained that while it typically takes two to three weeks or more to announce the results, a specific announcement date has not yet been set.

An MOLIT official stated, “From the residents’ perspective, the mere fact that a site is under inspection could be a source of stress, so we are not disclosing the sites,” adding, “We must also give the association an opportunity to explain its position, and after verifying this, we need to compile a list of violations and determine follow-up measures, so it is difficult to specify an exact date for the announcement of the results.”