Gyeongbuk Province Saves 29.4 Billion KRW Budget Through Pre-Contract Review

[Asia Economy Yeongnam Reporting Headquarters Reporter Lee Young-wook] Gyeongsangbuk-do announced on the 30th that in the first half of this year, it saved 29.4 billion KRW in budget through pre-contract cost reviews on 612 cases worth 651 billion KRW, including construction, services, and goods procurement, targeting the province, cities/counties, and invested/subsidized institutions.

The budget saving rate averaged 4.52%, with 157 more cases reviewed compared to 455 cases in the same period last year, and the amount saved increased by 11.3 billion KRW from 18.1 billion KRW in the same period last year.

Looking at the savings by institution, cities/counties accounted for the largest share with 345 cases saving 23 billion KRW, representing 78.1% of the total savings; the province saved 5.9 billion KRW from 248 cases (20.2%), and invested/subsidized institutions saved 0.5 billion KRW from 19 cases (1.7%).

By project type, the construction sector led with 278 cases saving 26.1 billion KRW, accounting for 88.7% of total savings; the service sector saved 3 billion KRW from 143 cases (10.3%), and goods/printing saved 0.3 billion KRW from 191 cases (1%).

In particular, starting this year, contract reviews have been expanded and operated for single-person contracts under 50 million KRW for goods (women-owned businesses, disabled organizations), resulting in a budget saving effect of 86 million KRW through pre-review of 96 cases and 3.4 billion KRW compared to the previous year.

Major savings cases include 376 million KRW from adjustments and quantity calculation error corrections for miscellaneous metal fabrication and installation in the ‘Light and Scenery Creation Project,’ and 574 million KRW from corrections of overlapping applications in cut and fill leveling in the ‘Natural Disaster Risk Improvement District Maintenance Project.’ Conversely, for projects where construction waste disposal costs were set lower than the Construction Association standards, the budget was increased to an appropriate cost.

Lee Chang-jae, Auditor of Gyeongsangbuk-do, stated, “To secure the appropriateness of cost estimation, which is the original function of the contract review system, and to strengthen local fiscal soundness, we will continue more meticulous reviews and implementation status checks in the second half of the year.”

He also said, “I hope that the contract cost savings promoted by the province will contribute even a little to the operation of local finances to overcome the COVID-19 crisis.”