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BOK to face further delays in construction of new headquarters

The Bank of Korea is likely to experience further delays in the reconstruction of its headquarters as a disputed builder asserted its rights as the successful bidder, challenging the procurement office’s plan to carry out a re-tendering process.

The Seoul Central District Court on Thursday granted a provisional injunction filed by Kyeryong Construction Industrial, demanding that the Public Procurement Service halt its re-tendering process for the reconstruction of the BOK’s annex, BOK officials said Friday.

The Bank of Korea’s old headquarters (Yonhap)
The Bank of Korea’s old headquarters (Yonhap)

The local builder had also demanded that the BOK resume talks for the technical consultation, adding pressure upon the delayed groundbreaking, but this was rejected by the court.

The procurement office is to decide within a week whether to appeal the case to a higher court, officials said.

In 2017, the PPS tapped Kyeryong as the preferred bidder to rebuild the BOK’s outdated annex. The runner-up was Samsung C&T, the construction arm of Samsung Group, which had been widely expected to win the bid.

The Board of Audit and Inspection, however, declared that the tendering process was in breach of the Act on Contracts to Which the State is a Party because the selected builder had suggested an amount higher than the expected bidding price.

The Board of Audit and Inspection in April this year reiterated that stance, saying the contract would set the state budget back 46.2 billion won ($39 million). The PPS subsequently declared the bidding results invalid.

Kyeryong filed for a court injunction in May, seeking to stop the re-tendering and maintain its position as successful bidder in the initial round.

With Kyeryong insisting on its conventionally acquired status and the re-bidding process suspended, it now remains uncertain when the central bank will have its new building.

“(The BOK) will keep watch on the situation and wait for the procurement office’s decision,” said a BOK official.

Regarding the possibility that the BOK could seek damages from the PPS over alleged missteps in the bidding process, the official said “we shall decide after the current situation wraps up, as it is difficult to assess the amount of damages.”

The BOK currently occupies 15 floors within the Samsung Life Insurance headquarters in central Seoul, paying some 1.3 billion won per month in rent.

The setback is expected to cause more than 15 billion won ($12.73 million) every year that the project is delayed.

By Bae Hyun-jung (