Board of Audit and Inspection: "Seoul City, Inappropriate Promotion of Public Facility Solar Power Generation Project"

[Asia Economy Reporter Son Sunhee] Seoul City has been found to have installed solar power facilities in public buildings that did not meet construction standards or were inadequately maintained.

The Board of Audit and Inspection announced this on the 17th through the disclosure of the 'Seoul City Institutional Operation Audit' results. This audit was conducted between July and October to inspect overall institutional operations such as permits, financial management, and organizational and personnel operations of Seoul City.

Since November 2017, Seoul City has been promoting a project to install solar power facilities in public buildings located in Seoul by establishing the 'Five-Year Comprehensive Plan for Solar Power Expansion' and combining subsidies for solar power facility installation calculated and supported by the Korea Energy Agency with its own budget.

Local governments including Seoul City purchase and install necessary solar power facilities without competitive bidding when the solar power facilities are registered as excellent procurement products with the Public Procurement Service under the 'Act on Contracts to Which the State is a Party' and have third-party unit price contracts in the Korea ON-line E-Procurement System (KONEPS).

However, the Korea Energy Agency calculated the installation unit price of solar power facilities higher for the public sector than the private sector by adjusting the bid-winning rate assuming competitive bidding and not properly reflecting the market price of solar power facilities, which has been decreasing annually, despite the fact that competitive bidding was not conducted. They raised the installation unit price by considering the Public Procurement Service’s average bid-winning rate (86.8%) even though there was no competitive bidding.

Additionally, Seoul City was found to have installed solar power facilities not aligned with the azimuth standards or to have cases where repairs took about four months after a malfunction, indicating installations below construction standards or insufficient maintenance.

The Board of Audit and Inspection stated, "We notified the Chairman of the Korea Energy Agency to prepare a reasonable method for calculating subsidy support prices for the solar power generation regional support project and requested the Mayor of Seoul to thoroughly manage the installation and maintenance of solar power facilities."

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