Sluggish Construction Industry... Jeollanam-do to Support Subcontract Payment Guarantee Fees

Supporting the Recovery of the Construction Industry...
Applications Accepted on a First-Come, First-Served Basis

Jeonnam Provincial Government Office Building View

Jeollanam-do has officially launched the "Construction Project Subcontract Payment Guarantee Fee Support Program" to ease the burden on local construction companies struggling due to high inflation and weakened investment sentiment.

This program supports 50% of the issuance fee (up to 10 million won) for main contractors who issue payment guarantees after signing subcontract agreements with local construction companies for privately commissioned construction projects in Jeollanam-do.

Applications are accepted on a first-come, first-served basis and can be submitted in person or by mail to the Regional Planning Division of Jeollanam-do.

A payment guarantee is a document that the main contractor must issue to ensure the fulfillment of the subcontract agreement, serving as an institutional safeguard to help subcontractors receive construction payments securely. However, in practice, main contractors have often avoided implementing this system, citing reasons such as direct payment agreements or the burden of fees incurred when issuing guarantees.

In response, Jeollanam-do expects that this fee support program will enhance the effectiveness of the system, protect the rights and interests of the construction industry, and establish a stable foundation for participation in construction projects, thereby revitalizing the stagnant local construction market.

Kim Yungrok, Governor of Jeollanam-do, stated, "Although the subcontract payment guarantee fee is small, it is a burden for the construction industry. Since the construction industry has a significant impact on the local economy and job creation, we will continue to develop and implement various support measures to protect local construction companies and further vitalize the construction sector."