Construction Industry Calls for Withdrawal of Combined Penalty Point System for Construction Defects

[Asia Economy Reporter Yoo In-ho] The construction industry is strongly opposing the government's improvement of the construction project defect penalty system.

Fifteen member organizations affiliated with the Korea Federation of Construction Associations (KFCA) submitted a joint petition on the 19th to the Blue House, the National Assembly, and the Ministry of Land, Infrastructure and Transport, requesting the withdrawal of the amendment to the Enforcement Decree of the Construction Technology Promotion Act, which includes the revision of the defect penalty calculation method, stating that it threatens the survival of construction companies.

The KFCA argued, "The defect penalty system is intended to raise awareness and prevent defective construction by imposing disadvantages for minor defects, but the amendment effectively imposes a death sentence on companies."

The proposed amendment to the enforcement decree, currently under legislative notice, changes the defect penalty calculation method from an average method to a cumulative method, leading to concerns that companies with many sites will accumulate penalties, resulting in bans on apartment pre-sales and restrictions on participation in public construction projects.

The KFCA claims that if penalties are calculated under the revised method, 15 out of the top 20 large construction companies in the construction capability evaluation, accounting for 75%, will be unable to conduct pre-sales.

In the petition, the KFCA emphasized, "If the legislative notice is implemented as is, the imposed penalties will increase on average by 7.2 times and up to 30 times compared to before," warning that "sound medium and large construction companies as well as regional small and medium enterprises may face the risk of being pushed out."

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