Korea Construction Association President Seunggu Han: "Will Lead Construction Industry Recovery Through SOC Expansion and Construction Cost Normalization"

Achievements of Ten Key Initiatives Revealed
"Full Efforts on Profitability Recovery, Workforce Supply, and Overseas Expansion"
Policy Reflected Over the Past Year, Including Higher Public Bid Success Rates and PF System Improvements
"Technology Without Sufficient Project Volume Is an Illusion... Pre-Feasibility Standards Should Be Eased and SOC Budget Secured Above 28 Trillion Won"

Seunggu Han, President of the Korea Construction Association, announced, "In order to overcome the downturn in the construction industry, we will make every effort to implement ten key initiatives, including the adjustment of construction costs to realistic levels and the expansion of investment in social overhead capital (SOC)." He also disclosed concrete achievements from the past year, such as raising the bid success rate for public projects and improving project financing (PF) fees, and expressed his determination to establish practical support measures so that the construction industry can once again take a leap forward.

Seunggu Han, President of the Korea Construction Association. Provided by the Association.

At a press conference held in Gwanghwamun, Seoul on the 21st, President Han said, "We are creating an environment for construction companies to recover profitability by increasing public project costs, reflecting price fluctuations in private sector projects, and adjusting PF fees. Now, it is time to revitalize the industry through increased construction volume, regulatory relaxation, and improvements in workforce supply and demand."

The Korea Construction Association presented detailed achievements of the ten key initiatives it has pursued with the industry over the past year. To secure profitability for small and medium-sized projects, the association raised the minimum bid rate and revised standard unit prices, thereby improving profitability in public construction. In the local contract system, it achieved a maximum increase of 3.3 percentage points in the bid rate. In private investment projects, the association worked to make the criteria for reflecting price fluctuations more realistic and promoted institutional improvements to reduce excessive PF fees. It also expanded the scope of force majeure in completion guarantees and integrated duplicate fees, reflecting field complaints in policy.

The association is actively recommending to the government an increase in the SOC budget to more than 28 trillion won and the relaxation of preliminary feasibility study (pre-feasibility) requirements. Currently, projects with a total cost of 50 billion won (with 30 billion won from the national treasury) are subject to pre-feasibility studies, but the association believes this threshold should be raised to 100 billion won (with 50 billion won from the national treasury). President Han especially emphasizes that, for the government's construction industry revitalization policies to be effective, an increase in project supply must occur simultaneously. He stated, "In a market where survival is impossible based solely on technological prowess, securing a sufficient volume of quality projects is an essential condition for survival."

President Han also identified workforce supply and demand as a critical issue. He stressed the urgent need for institutional reforms to encourage long-term employment, such as reducing the re-entry waiting period for foreign skilled workers from six months to one month. He believes that without resolving the imbalance in workforce supply and demand at construction sites, efforts to adjust construction costs to realistic levels will be futile.

The association will also strengthen efforts to enter overseas construction markets. It is currently consulting with the Ministry of Land, Infrastructure and Transport to ensure that member companies' opinions are reflected in initiatives such as dispatching overseas infrastructure diplomacy delegations and organizing events to invite overseas clients. The association aims to reduce information asymmetry through direct exchanges with actual clients and to support the overseas expansion of small and medium-sized construction companies. President Han stated, "Although we have achieved several successes, such as the smooth stabilization of the PF market, securing the SOC budget, and improving standard unit prices, there is still a long way to go. We will also work on improving the Serious Accident Punishment Act and responding to illegal activities by construction unions, while establishing an industrial foundation that allows the construction industry to stand on its own with confidence."