Minister Kim Hyun-mi of the Ministry of Land, Infrastructure and Transport: "Support for Liquidity in the Construction Industry"

[Asia Economy Reporter Yoo In-ho] Kim Hyun-mi, Minister of Construction and Transportation, announced on the 12th that “we will support liquidity of operating funds for construction companies facing financial difficulties” as a response to the management difficulties in the construction industry caused by the novel coronavirus infection (COVID-19).

Minister Kim made this statement at the ‘Quarantine Situation Inspection and Damage Recovery Meeting’ held at the LH construction site in Pyeongtaek Sosabeol, Gyeonggi Province. She said, “We are preparing various support measures so that the construction industry can overcome the difficulties caused by COVID-19.” Attendees at the meeting included representatives from LH, Korea Railroad Corporation, Korea Rail Network Authority, Korea Expressway Corporation, the main and subcontractors of the Pyeongtaek Sosabeol A-5BL site, quarantine officers, and on-site skilled workers from the construction industry.

Minister Kim said, “From the 16th, an emergency special loan will be implemented under the supervision of the Construction Mutual Aid Association and the Specialized Construction Mutual Aid Association,” adding, “We will reduce guarantee fees related to contract period extensions and temporarily ease the joint management system of advance payments until the end of June.”

She further added, “Along with the reduction of guarantee fees for contract performance, construction performance, and advance payment guarantees, the advance payment for construction will be reduced from the current 35% to about 17.5% with the consent of the mutual aid association.”

Minister Kim promised to support contract adjustments in case of damages such as construction stoppages due to confirmed COVID-19 cases. She explained, “In the case of public construction projects, even if construction is halted due to COVID-19, guidelines have been issued to allow adjustments to the construction period or contract amount upon the request of the construction business operator,” and “We plan to promote various support measures that can help the construction industry, such as the realization of standard market prices for major construction types with large discrepancies from market prices, improvement of unnecessary regulations, and conditional suspension of administrative sanctions.”

Minister Kim also mentioned wage protection for construction workers struggling due to COVID-19. She said, “In difficult times, protection for vulnerable groups such as construction workers must be strengthened, so we will reform the direct wage payment system to ensure proper payment of wages and fees and speed up institutional improvements,” adding, “Since we are preparing countermeasures with related ministries, we plan to announce specific measures in the first half of this year.”

In this regard, the Ministry of Land, Infrastructure and Transport is actively promoting the introduction of the ‘Appropriate Wage System’ to ensure that workers receive fair compensation for the work they perform, along with efforts to prevent wage arrears.

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