Inje-gun, "No legal issues as the contract was terminated early"
Other local governments, "Rebidding is generally standard if the primary contractor goes bankrupt"
Local companies raise suspicions, "The head of the local construction association and the incumbent county governor are relatives"
[Asia Economy Reporter La Young-cheol] Inje-gun, Gangwon-do, is facing growing suspicions that it awarded contracts worth tens of billions of won to specific companies through 'private contracts' without conducting public bids.
In particular, the suspicions of preferential treatment and corruption have deepened as the chairman of the local construction association, who was in charge of selecting subcontractors on behalf of Inje-gun, is known to be a relative of the current county governor.
Contract officials from other local governments such as Gyeonggi-do told this paper in a phone interview, "Except in very rare cases, it is customary to re-bid when the primary contractor goes bankrupt."
According to Inje-gun and others, the total project cost for the construction of County Road No. 6 (Jeongja~Hanam), scheduled for completion in 2024, is about 19.4 billion won.
Among them, Company A won a contract worth about 4.9 billion won through a public bid in October 2019 but went bankrupt last September due to financial difficulties.
Following the bankruptcy of the primary contractor, Inje-gun, unlike other local governments that usually conduct re-bidding, selected a company through a private contract.
The head of the Tax and Accounting Division of Inje-gun explained, "The construction period was shortened, they know the site well, and since it is a local company, we made a private contract," adding, "Since the contract was terminated midway, there is no legal problem."
The contracting department requested the Construction Division to "select a subcontractor," and the Construction Division designated Company B, a subcontractor of Company A, as the private contract candidate and passed it to the contract manager.
However, when Company B was deemed ineligible and could not be contracted, after a re-request process, Company C was finally selected as the private contract candidate.
Company C is known to have failed in the 2019 public bid, and Inje-gun signed a private contract with Company C for the remaining project last November.
The private contract amount corresponds to about 2.5 billion won for the remaining construction. This is 125 times the usual private contract limit of 20 million won.
According to this paper's investigation, the representative of Company C, which was privately contracted by Inje-gun, was confirmed to be the spouse of the representative of Company B, the subcontractor of the bankrupt Company A.
This has led to criticism that "Inje-gun intended from the beginning to give work to Company B (under the husband's name)."
A representative of a construction company in the Inje area said, "There has been a lot of talk in the region that Inje-gun intended to give the work to Company B (under the husband's name) from the start, and when that did not work out, it was no different from giving the work through Company C (under the wife's name) without a public bid."
Evidence of private contracts was also found in another project.
The library construction project, which Company A (the primary contractor) had won, was revealed to have been privately contracted with a company designated by the local construction association.
The remaining construction budget for the 'Miracle Library' project in Inje-gun, scheduled for completion this November, is about 2.1 billion won.
Inje-gun signed a private contract with local Company D without bidding last November as the construction company for the project.
During this process, the county's contracting department also notified the Culture and Tourism Division to "send a private contract request form."
However, the Culture and Tourism Division refused the contracting department's request, citing regulations, saying, "Terminate the contract with the bankrupt company and complete the project as a settlement only."
The official in charge of the library said, "The amount was too large for a private contract, and it felt like it was being given to a specific company, so we did not get involved in any private contract matters in our division."
Accordingly, the contracting department requested the local construction association to recommend a construction company for the library, and Company D was selected.
The head of the Tax and Accounting Division said, "We did not want to be suspected of favoring a specific company, and since there were effects of shortening the construction period and saving the budget, we asked the association to select the company."
However, the project cost, which was expected to be reduced, increased by 300 million won from the original 1.8 billion won to 2.1 billion won due to some design changes.
The official in charge explained, "We received a request from the construction company regarding omitted parts, and after supervision review, the design was changed."
As the construction company changed, omitted parts were discovered, resulting in additional project costs.
Meanwhile, the police are reportedly investigating the suspicions surrounding Inje-gun's private contracts.
As Inje-gun consecutively signed private contracts with companies without going through the usual bidding process, suspicions have been raised about whether the current county governor exerted influence.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
