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[Alpha Biz=(Chicago) Reporter Paul Lee] Difficulties are expected this year, including suspension of operations, lawsuits and massive operating losses due to poor construction of apartments in Geomdan, Incheon, which took place last year.
The suspension of business will be suspended until the administrative litigation is completed, but competition for maintenance projects (redevelopment and reconstruction) will also have to be weakened.
GS Engineering & Construction posted its biggest annual sales record last year but posted a massive operating loss. It plans to start re-construction after the demolition in April to deal with the inspection accident, and about 75 billion won will be incurred immediately, including 71.5 billion won in demolition costs and 3.44 billion won in service costs.
The contract amount won by GS Engineering & Construction, which holds a 40% stake in the project, is 110.935 billion won out of the total project cost of about 277.3 billion won. At the 68% process rate, starting full reconstruction after demolition, and adding demolition costs, delay compensation, and reconstruction costs, GS E&C's financial losses are expected to amount to hundreds of billions of won, equivalent to its annual operating profit.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
