Legal question over pre-contract cost increases could decide who pays Gadeokdo's 620 billion won of war inflation

Take the roughly 13 per cent stake that thirteen Busan and Gyeongsangnam-do builders hold in the only consortium that showed up ^[12], apply it to a 10.7 trillion won project ^[6], and their slice of the work is about 1.39 trillion won ^[18]. Each of them says proceeding at the advertised price could leave it with losses in the tens of billions of won ^[13], and thirteen firms at a conservative twenty billion apiece is 260 billion won of claimed loss on that 1.39 trillion, or 18.7 per cent ^[21], against a construction cost index that moved 5.8 per cent between the December tender announcement and June ^[9].

Two readings. Either offshore landfill and soft ground treatment genuinely carry several times the index, which is the consortium's case, resting on the concentrated deployment of vessels and heavy equipment ^[11], or the loss figure is a negotiating position with a withdrawal threat attached to it.

The decree, as described, starts counting at signature: 90 days elapsed plus a 3 per cent move in the item or index adjustment rate for the ordinary route ^[3], with an early exception where disasters or sharp raw material spikes make performance difficult ^[4]. What it does not obviously reach is the stretch between a bid and a contract nobody has signed ^[5], which here runs unusually long, because the January and February tender failed twice with a single bidder before February's private-contract designation ^[7] and signature is now pencilled in for October ^[14], about ten months after the price went out ^[22]. The 5.8 per cent reading stops in June, so four of those ten months sit outside the 620 billion won figure entirely ^[22].

The more durable question is the split the ministry has already committed to. Its official says the talks cover only the portion of price growth that spiked unusually fast because of the war, excluding natural inflation ^[16], and the government is looking to capture only what contractors could not reasonably have foreseen, such as fuel, raw material and maritime freight costs traceable to the Middle East war ^[15]. Nothing in the decree as described supplies the arithmetic for that separation. Whoever performs it in September writes the method.

What the ministry is not doing is re-tendering, and the record explains why: two solicitations produced one bidder ^[7], so a third would be price discovery with a single participant, on a job carrying 106 months of construction, about 8.8 years, ahead of it ^[23].

This is probably wrong, but I read the request itself as most of the answer. A ministry that has already scheduled the main contract for October and a groundbreaking for November ^[14], and that has pre-sized the payable portion by excluding baseline inflation ^[15], is asking permission for a number rather than asking whether to pay one. The counter-thesis, or rather the more interesting version, is that the Ministry of Government Legislation answers narrowly on the text ^[1], the contract gets signed in October at the advertised price, and the adjustment reappears afterwards through the raw material exception ^[4], which moves the argument from an interpretation to an audit. What would prove me wrong is an October signature with nothing added, meaning Daewoo Engineering & Construction absorbed it, the scope shrank, or the thirteen walked and their 13 per cent was backfilled at the old price.