Small and Medium Business Ombudsman Eases Qualification for Waterworks Construction Agency License

Improvement of Entry Restrictions and Existing Company Preferences for Water Supply Construction Agency Services
Implementation of Local Government Regulatory Innovation Series for SMEs and Small Business Owners by Year-End

Jubong Park, Small and Medium Business Ombudsman. / Photo by Dongju Yoon doso7@

[Asia Economy Reporter Kim Heeyoon] The entry barriers for water supply construction contractors will be lowered in the future. Standards for business facilities, capital, and technical personnel will be relaxed, and the evaluation criteria that favor existing companies will also be improved.

Park Joobong, the Small and Medium Business Ombudsman, announced on the 27th that as the first part of the 'Regulatory Innovation for Local Governments Felt by Small and Medium Enterprises and Small Business Owners' series, which will be promoted until the end of this year, the designation system for water supply construction contractors will be improved.

Local governments have operated a designation system for contractors entrusted with water supply construction that is difficult to carry out directly. However, the related local government ordinances have been criticized for imposing unnecessary burdens on companies and hindering fair competition due to unreasonable content.

Accordingly, the Ombudsman reviewed the local government ordinances operating the contractor designation system and identified eight regulatory improvement tasks within three major types: 'restriction on new entry, preference for existing companies, and administrative burden,' and improved them together with local governments.

First, the qualifications for contractor applications will be relaxed from the existing 'site area up to 100㎡, capital up to 200 million KRW, technical personnel up to 3 people' to 'removal of area securing criteria, capital up to 150 million KRW, technical personnel 2 people.'

Also, to solve the problem of a specific company monopolizing the contractor status once designated, the designation period, which was from 3 to 5 years, has been shortened to less than 2 years. After the designation period expires, re-designation will be conducted through public recruitment and evaluation, and the evaluation criteria favoring experienced companies will also be improved.

Furthermore, interest on defect repair deposits, which some local governments did not return, will now be refunded, and the maximum fee of 100,000 KRW imposed when issuing contractor designation certificates by local governments will be reduced.

The Ombudsman expects that this will increase the possibility of new companies entering the local water and sewage facility construction market, create a foundation for fair competition, and ultimately contribute to improving the overall quality of the water supply system.

Park Joobong, the Ombudsman, said, "Through this regulatory improvement, we expect to somewhat reduce the cost burden on small and medium enterprises struggling due to the novel coronavirus infection (COVID-19)," and added, "We will relentlessly pursue customized local regulatory reforms on-site until the end of the year to eliminate regulations that burden small and medium enterprises."

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