A South Korea court has suspended most of the Oct. 21 debarments of at least 10 major Korean contractors from winning government work, according to two of the affected firms.
The Korean Water Resources Corp., known as K-Water, had debarred for 15 months Hyundai Engineering & Construction Co. Ltd., Daelim Industrial and GS E&C related to alleged bid collusion on the $20-billion Four Rivers Restoration water project, completed in 2011.
In September, Korea's supreme prosecutor levied charges against 22 former and current managers at these three companies and others, including Samsung C&T, Hanjin Heavy Industries, Keangnam Enterprises, Kumho Industrial, Kyeryong Construction, Samwhan Corp. and SK E&C. The other firms received shorter debarments, say media reports.
Prosecutors claimed the collusion added as much as $3.5 billion to the project cost.
Samsung C&T confirmed the debarment suspension "until conclusion of a fair trial resulting in judgment," the firm said in an Oct. 29 statement to ENR.
In an Oct. 31 response, Hyundai E&C Vice President K.B. Choi said the firm termed the debarment "unmerited" and was granted an interim injunction by a district court on Oct. 24, "overturning" it.
According to Choi, the charges were filed against four former employees. "Our business activity is not negatively affected by the charges since they were made against individuals, not the company itself," he said.
All the firms except Samwhan and Kyerong are among ENR's Top 250 Global Contractors. Hyundai ranks at No. 25, with $12.5 billion in 2012 revenue, of which $7 billion is outside Korea.
Observers say the enforcement has political overtones. Earlier this year, President Park Geun-Hye succeeded Lee Myung Bak,who had been a former CEO of Hyundai E&C.
In its statement, Samsung says South Korean law "permits certain agencies to unilaterally hand down such sanctions initially, often based significantly on political motives or directives of the then current government administration."
Samsung says it won the court suspension on Oct. 24, but it did not note how many other debarments have been lifted.
Officials of K-Water or the supreme prosecutor's office did not respond to ENR requests for comment.
Four Rivers was designed to restore 900 kilometers of the Geum, Han, Nakdong and Yeongsan rivers, improve flood control and build 14 new reservoirs.
But critics say the scheme has caused other environmental damage to the region.