[Exclusive] On-site Batch Plants That Sparked Industry Backlash to Maintain '50% Production Limit'

Ministry of Land Meets Ready-Mixed Concrete Industry for Compromise
50% Production Limit Maintained, Exception for National Projects
Scope of Installers Narrowed from All Ordering Parties to National and Public Institutions
New Amendment to Be Announced for Administrative Notice Early Next Month

The "Partial Amendment to the Construction Works Act," which faced strong opposition from the ready-mixed concrete industry for significantly relaxing the standards for installing on-site batch plants, is being substantially revised to accommodate industry demands. The revised plan will limit the volume that can be produced by on-site batch plants to half of the total required amount and restrict the entities allowed to install such plants to "contractors and public institutions." Authorities plan to announce the revised amendment for administrative notice early next month and proceed with follow-up procedures.

Vehicles are busily moving at a ready-mixed concrete plant in Seoul.

According to the government and related industry sources on April 29, the Ministry of Land, Infrastructure and Transport (MOLIT) recently completed a round of consultations with representatives from the ready-mixed concrete and transportation industries regarding the "Partial Amendment to the Construction Works Quality Management Guidelines." In March, MOLIT had announced for administrative notice a partial amendment to the Construction Works Act that would significantly ease the conditions for installing on-site batch plants. However, due to fierce opposition from the industry, the ministry entered into discussions to find a compromise. An on-site batch plant refers to equipment that allows for the direct production and supply of ready-mixed concrete at construction sites by combining cement, sand, gravel, and other materials.

The most controversial aspect of the amendment initially proposed by MOLIT was the removal of the current standard that limits the volume that can be produced and supplied by on-site batch plants to 50% of the total required amount. In this scenario, all the ready-mixed concrete needed for a construction site could be produced and supplied directly on-site, raising significant concerns within the industry that small and medium-sized ready-mixed concrete companies in the surrounding area would lose their business opportunities. Additionally, the amendment included a provision to expand the entities allowed to install on-site batch plants from the current "contractor" to "contractors and all ordering parties," fueling fears that on-site batch plants could be installed indiscriminately.

The newly revised amendment has been adjusted to address many of these industry concerns. First, the provision limiting the volume that can be produced and supplied by on-site batch plants to 50% of the total required amount will remain unchanged. However, MOLIT will include an exception for "large-scale national projects" and similar cases, allowing all required concrete to be supplied via batch plants for critical and urgent construction sites. In such cases, a formal consultation process will be conducted through a separate consultative body that includes experts and stakeholders.

Furthermore, the entities permitted to install on-site batch plants will be limited to "contractors and ordering agencies (public institutions)." While the original amendment proposed expanding the entities from "contractor" to "contractors and all ordering parties," the scope of ordering parties has now been narrowed to national and public institutions. MOLIT plans to finalize the new amendment with these provisions and announce it for administrative notice early next month.

A MOLIT official stated, "Both the ready-mixed concrete industry and the authorities made compromises to reach a level of amendment that the industry can accept," adding, "As a result, the standards for installation have been relaxed compared to the current regulations, but the extent of relaxation is much less than what was initially announced for administrative notice."

A representative from the ready-mixed concrete industry commented, "The deletion of the provision limiting on-site batch plant production to 50% was the industry's greatest concern, but since that provision will remain unchanged, the industry has narrowly avoided a crisis," adding, "Nevertheless, since the overall standards for installation have been relaxed, concerns about indiscriminate installation still remain."