Gyeonggi-do Expands Application of 'Standard Market Unit Prices' for Construction Projects... Budget Savings Expected

Implementation of Public Construction Projects Under 10 Billion Won Starting in the Second Half of the Year

[Asia Economy Reporter Ra Young-cheol] Gyeonggi Province announced on the 5th that "the expanded application of the standard market price for public construction projects under 10 billion won has resulted in a budget saving effect of about 750 million won."

The standard market price is a benchmark price set by the Ministry of Land, Infrastructure and Transport based on past market transaction prices, used to calculate construction costs for public construction projects implemented and supervised by public institutions.

According to the province, as of the 30th of last month, a total of 9 public construction projects ordered by the province, for which contract reviews have been completed, showed a budget saving rate of 5.9% compared to the previous method.

The current Local Contract Act allows each local government head to adjust the profit rate within 15% and general administrative expenses within 6% when determining the estimated price based on cost calculation.

Since last month, the province has been applying the standard market price to all newly ordered public construction projects under 10 billion won.