Gyeonggi-do's Preemptive Crackdown on 'Paper Companies' Achieves Results... 30% Bid Blockage

[Asia Economy (Uijeongbu) = Reporter Lee Young-gyu] Gyeonggi Province has found that its preemptive crackdown on 'paper companies'?fake companies created solely to win construction bids?has filtered out about 30% of such companies from the bidding stage. Paper companies exist only on paper.

Gyeonggi Province announced on the 7th that, as a result of implementing a preemptive crackdown system on construction projects ordered by the province and its affiliated organizations from October to December last year, it confirmed that 18 companies, accounting for 15% of the 115 companies subject to qualification screening, failed to meet the construction business registration standards.

It also explained that by specifying disadvantages such as 'contract exclusion' in the bidding announcement, preventing paper companies from participating in bids, the number of bids for civil engineering projects worth around 300 million won decreased by 16%.

The province plans to apply administrative sanctions such as business suspension and refer cases for investigation under the crime of bid obstruction starting from the 10th to eradicate paper companies.

Since October last year, the province has introduced a preemptive crackdown system on paper companies during bidding for construction projects by the province and its affiliated public institutions.

This system involves verifying whether construction companies that passed the qualification screening meet construction business registration standards such as capital, office, and technical personnel through document and on-site inspections, and disqualifying those that fail to meet the criteria from bidding opportunities.

The province receives reports on unfair construction trade practices, including paper companies, through the public interest reporting hotline 'Fair Gyeonggi 2580.' When administrative sanctions are imposed based on reports, the province awards whistleblowers up to 200 million won.

Lee Jae-myung, Governor of Gyeonggi Province, has stated on multiple occasions, "Paper companies must be eradicated as they cause serious harm to the construction industry by inflating construction costs and depriving sound construction companies of bidding opportunities. We will take strong measures to ensure that paper companies, which promote unfair trade practices in the construction industry, never gain a foothold in Gyeonggi Province again."

This content was produced with the assistance of AI translation services.