Construction Association Announces "Top 10 Priority Tasks"
"Substantial System Improvements to Transform Industry Structure"
The Korea Construction Association will take the lead in securing profitability measures for small and medium-sized construction projects and realizing construction costs through improvements in the standard unit price system. It will also re-propose supplementary legislation for the Serious Accidents Punishment Act (hereinafter referred to as the SAPA), which was scrapped due to opposition from the opposition party, and a two-year grace period for the SAPA on construction projects under 5 billion KRW, while improving unreasonable project financing (PF) practices such as the responsibility completion guarantee.
Han Seung-gu, President of the Korea Construction Association, is delivering a greeting at a press conference held in Gwanghwamun, Seoul on the 30th. / Photo by Noh Kyung-jo
On the 30th, Han Seung-gu, president of the Construction Association, held a press conference in Gwanghwamun, Seoul, and announced ten key priority tasks including these contents. First, regarding measures to secure profitability for small and medium-sized construction projects, the association set a goal to raise the threshold for excluding bidders who submit bid prices below 98% of the net construction cost from winning bids to projects under 30 billion KRW. The current national and local contract laws use 10 billion KRW as the standard, and the association plans to propose amendments accordingly.
The association will also push for revisions to the standard unit price system, which serves as the basis for calculating construction costs. It aims to properly reflect the decreased productivity of skilled workers and various on-site conditions compared to the past, and to prepare institutional supplements to prevent arbitrary cuts and omission of items. In this regard, research projects will be conducted, including on-site inspections of construction cost-deficient trades such as rebar and concrete, and long-term investigations over 3 to 5 months to develop improvement plans. Based on these results, the association plans to continue government recommendations and persuade the National Assembly.
Regarding the SAPA, the association will re-push for a two-year application grace period for small and medium-sized construction projects under 5 billion KRW. Along with this, it will resolve overlapping safety inspections at construction sites and continuously respond to illegal activities by construction labor unions. The association stated that it will ensure the re-proposed 'Five Major Bills for Normalizing Construction Sites,' which were discarded due to the expiration of the 21st National Assembly session, are passed. The five major bills include the Construction Industry Basic Act, Construction Machinery Management Act, Judicial Police Duties Act, Recruitment Procedure Act, and Labor Union Act.
To support the smooth landing of the PF market and improve unfair practices, efforts will be made to revise the responsibility completion guarantee system. The responsibility completion guarantee is a safety device required by financial institutions from contractors, but conflicts have arisen over the scope of force majeure and excessive fees. Accordingly, the association plans to form an 'Industry Consultative Body for PF Unfairness Improvement' to develop improvement measures and propose them to the government. Discussions are also underway with the Ministry of Land, Infrastructure and Transport and the Financial Services Commission regarding the proposal of 'Financial Sector PF Risk Management Guidelines.'
In addition, the association will promote ▲establishment of a normal supply system for public infrastructure ▲improvement of the construction industry's image ▲strengthening communication ▲expansion of construction volume and foundation for training technical (skilled) personnel ▲improvement of unfair systems (such as granting effect to the total construction period for long-term continuous projects) ▲support for overseas construction market entry.
President Han said, "We want to lay stepping stones to solve the various problems accumulated in the construction industry over 70 years," adding, "We will change the industry's structure through practical institutional improvements."
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