A legal dispute between the Busan Port Authority (BPA) and developer PQ Construction over the termination of a land sale contract for the North Port transit center site is intensifying.
BPA notified the developer on June 26 that it was terminating the sale contract for the North Port transit center (Block C-1) site and filed for a court injunction to halt construction. PQ Construction (Hyeopseong General Construction) responded in a statement published in a local newspaper, calling the move "a unilateral act of gapjil by a public institution and an attempt to destroy workers and subcontractors," and demanded the immediate withdrawal of what it called an unreasonable attempt to stop construction. A separate appeal issued in the names of on-site subcontractors and workers said the action was "using administrative disagreements as a pretext to strip construction workers of their jobs and push their families to the brink," adding, "Do not drive materials suppliers into a chain of bankruptcies."
A PQ Construction official said Tuesday that the company had received court documents with the hearing date set for July 16 and had retained a lawyer to file a written response. "We don't know whether the court will grant the injunction, but once a ruling comes, we will file a full lawsuit challenging the contract termination," the official said.
The official added that the company planned to request a postponement given the tight timeline, though acknowledged it was unclear whether the request would be granted. The company's lawyer advised that a ruling would likely not come until around mid-August, as the court's recess period begins at the end of this month. On the contract termination itself, the official expressed concern that "more than 50 pieces of heavy equipment on site, workers, ready-mix concrete and steel suppliers, service contractors, and nearby restaurants and shops will all take a hit."
Earlier, Hyeopseong General Construction and PQ Construction said in a June 24 statement that BPA's claim of a "district-unit plan implementation guideline violation" was not accurate, arguing that the company was pursuing a design change to connect pedestrian decks horizontally but that the process had been delayed due to BPA's lack of cooperation.
The developers also argued that BPA had agreed to defer the imposition of development delay penalties upon Hyeopseong's request, and that construction had begun under an understanding that BPA would not separately demand submission of a demolition performance bond. They said they had continuously sought the deletion or revision of those clauses even before the ground-breaking.
BPA pushed back point by point, saying the developers' account of the facts was incorrect. On the allegation of non-cooperation over the design change, a BPA official said in a phone interview Tuesday that the authority had responded within three business days to PQ Construction's May 18 request for consultation on a traffic impact assessment review, shrugging off the claim.
On the allegation that certain contract clauses were "poison pill" provisions, BPA said the site serves as a node connecting Busan Station and the North Port redevelopment area and is the only privately sold plot that includes public facilities — a transit hub and a plaza. It said the development deadline requirement and the demolition performance bond submission clause were inserted for that reason, and that a clause could not be called a poison pill simply because it ran counter to the developer's interests.
BPA particularly noted that PQ Construction had refused to acknowledge the district-unit plan violation despite 18 months of guidance and had continued construction according to the original design, failed to pay 3.1 billion won ($2.1 million) in development delay penalties, and had not submitted the demolition performance bond. "After refusing twice to sign a letter of commitment, the developer submitted a version with key provisions unilaterally deleted," BPA said.
A BPA official said the violations were never ultimately corrected, causing "the trust relationship that underpins the contract to be damaged to a degree that is difficult to recover from," and that the authority had therefore notified the developer of the contract's termination. "The termination was lawfully issued due to the developer's fault, including the district-unit plan violation, and it is not appropriate to shift responsibility onto BPA," the official said.
With both sides in direct conflict, the dispute is heading toward a full courtroom battle over the facts. Concerns are growing that construction of the transit center — long regarded as a public amenity and a symbol of the North Port redevelopment project — could be stalled for an extended period.
kaf2002@heraldcorp.com
