Kwon Ik-wi Commission "Mandatory Electronic Registration of Private Contracts... Eradication of Preferential Contracts"

Implementation of Corruption Impact Assessment on 1,631 Public Institution Regulations

Jeon Hyun-hee, Chairperson of the Anti-Corruption and Civil Rights Commission. (Image source=Yonhap News)

[Asia Economy Reporter Moon Chaeseok] The Anti-Corruption and Civil Rights Commission announced on the 3rd that it will establish regulations to electronically register and manage all contract information, including small-value contracts, to eradicate the practice of preferential private contracts.

The Commission conducted a corruption impact assessment on 1,631 internal regulations operated by 10 public institutions in the transportation sector, including Korea Railroad Corporation and Seoul Metro, and recommended 137 improvements to each institution.

According to the contract management regulations for public institutions in the transportation sector, small-value private contracts such as construction, service, and purchase contracts under 20 million KRW can be made through written private contracts by the business department instead of the electronic procurement system.

Additionally, contract information is kept confidential, raising concerns that business departments might arbitrarily split orders to funnel work to specific companies.

Furthermore, neither the business departments nor the contract departments separately manage contract information, making it difficult to oversee unfair private contracts.

Accordingly, the Commission mandated that all contract information, including small-value private contracts, be electronically registered and managed to eliminate preferential private contract practices.

The prohibition of arbitrary order splitting was also specified in the contract management regulations.

The Commission recalled that there were criticisms that the 'rental and installment interest rates' on public institution-owned assets were excessively high compared to commercial bank loan rates. It recommended improving the interest rates on national property to appropriate levels.

This took into account the official interest rate (1.06% as of June), which is set considering the average deposit interest rate of one-year fixed deposits at commercial banks.

Chairperson Jeon Hyun-hee of the Commission stated, "Following the corruption impact assessment of public institutions in the transportation sector, we plan to continuously improve internal regulations that contain improper work practices or corruption-inducing factors in public institutions closely related to citizens' lives, such as urban development and tourism leisure sectors."

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