Gyeonggi-do Develops Local Procurement System to Replace 'Expensive Nara Market'

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Province is promoting the development of a local procurement system to replace the national procurement system 'Nara Market' operated by the Public Procurement Service.

On the 2nd, Gyeonggi Province announced the "Plan for Independent Development and Operation of a Fair Procurement System," aimed at creating a sound and fair procurement environment where local governments, local-invested and funded institutions, and local public enterprises can purchase inexpensive and quality goods.

The independent development of the local procurement system is Governor Lee Jae-myung's second measure to improve monopoly-related issues, following the development of a public delivery app.

According to a comparison conducted by Gyeonggi Province between April and May of prices on Nara Market and general shopping malls, out of 6,129 public procurement items sold on Nara Market, only 646 items (10%) had the same model available for price comparison. Among these 646 products, 90 items (13.9%) were actually more expensive than market prices.

However, according to the Procurement Business Act, local governments must prioritize purchasing items registered on Nara Market. The province explained that local governments are purchasing public procurement items at prices higher than market prices on Nara Market.

The province also raised concerns about procurement fees.

Including cities, counties, and affiliated public institutions, the province paid 24.6 billion KRW in procurement fees over the past three years due to procurement contracts. Nationwide, local governments pay approximately 88.8 billion KRW annually (as of 2017) in procurement fees to the Public Procurement Service.

A provincial official stated, "There are no projects where the Public Procurement Service supports local governments with these fees," adding, "All fees are used for the Public Procurement Service's own operating expenses or transferred to the general account, creating a structure where the Public Procurement Service operates at the expense of local governments."

Accordingly, the province formed a task force (TF) in March to prepare for the development of its own procurement system.

The province plans to secure system design service fees through this year's supplementary budget and, if accepted after consultations with related ministries such as the Ministry of Economy and Finance and the Public Procurement Service and amendments to the Procurement Business Act, aims to begin pilot operation in early 2022.

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