Water Resources and Environment Corporation, 27 Cases of Unfair Contracts Detected... 800 Million Won Recovered

Office for Government Policy Coordination Joint Government Anti-Corruption Task Force Announces Public Contract Status Inspection Results

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[Sejong=Asia Economy Reporter Son Seon-hee] Twenty-seven cases of unfair contracts and other issues were detected among public contracts signed by Korea Water Resources Corporation and Korea Environment Corporation under the Ministry of Environment. The government decided to recover 800 million KRW related to this and to continuously monitor related measures going forward.

The Government Joint Anti-Corruption Promotion Team of the Office for Government Policy Coordination announced on the 13th the results of a joint inspection conducted with related agencies, including the Ministry of Environment, over about two months from October last year, targeting contract and project management practices of public institutions (Korea Water Resources Corporation, Korea Environment Corporation). The inspection covered approximately 25,000 public contracts (9.1 trillion KRW) signed between January 2016 and June last year.

The inspection focused on whether there was collusion with companies during unfair private contracts, unfair practices such as bid rigging, appropriateness of project cost estimation and adjustment, violations of contract laws, and improper handling during project implementation.

As a result, cases were confirmed such as contracts signed without prior verification with companies restricted due to bid rigging, private contracts with companies where employees who retired within two years were serving as executives, and failure to report private interests of related officials. There was also a case where the national contract law was applied instead of the local contract law to avoid giving extra points to local companies when contracting delegated projects from local governments.

Additionally, failure to utilize the bid rigging indication system, non-compliance with post-notification from the Board of Audit and Inspection after private contracts, and omission of contract reviews were also pointed out.

The Office for Government Policy Coordination took measures such as institutional warnings (12 cases), disciplinary actions (11 cases), and restrictions on bid participation qualifications (4 cases) for the confirmed cases, and recovered and settled a total of 800 million KRW. Furthermore, it announced plans to implement 12 improvement measures to strengthen internal management and supervision, supplement institutional devices, and improve unfair practices to ensure transparency in the public contract sector.

The Office for Government Policy Coordination stated, "Based on the inspection results in the environmental sector, the government plans to continuously conduct inspections and anti-corruption activities on contract and project management practices of public institutions, focusing on sectors with large project scales and vulnerable to corruption risks."