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[Asia Economy Honam Reporting Headquarters Reporter Kim Yukbong] Naju City in Jeollanam-do has become embroiled in controversy over preferential treatment after signing a private contract worth tens of billions of won with a specific company.

Companies in the same industry complain that they did not even have a chance.

According to Naju City on the 9th, the city recently signed a contract worth about 2.8 billion won with Company A for the delivery of a remote control process control panel for drainage gates as part of the Yeongsan River (national river) smart river management system construction project.

This project was promoted to introduce an electrification and automation system as a countermeasure against delays or malfunctions in the opening and closing of drainage gates related to heavy rain damage this summer, aiming for rapid response in disaster situations.

Specifically, the integrated control operation system includes one location (situation room equipment) costing 758,395,000 won, and the drainage gate control system includes 46 locations (monitoring and control equipment) costing 2,042,460,000 won. The actual contract amount used was 2,425,250,000 won, which is 86.59% of the base (design) amount.

However, suspicions arose as the city’s private contract raised concerns.

The project worth about 2.8 billion won was not publicly bid but privately contracted, and since there are four companies in the region capable of carrying out this project, there are allegations of favoritism.

Moreover, related companies explained that even before selecting the company, rumors had already circulated inside and outside the region that Company A would be chosen.

Previously, to enhance fair competition and transparency, the city strengthened the private contract criteria from under 20 million won to under 5 million won from June last year to May this year. This is a contrasting point.

Naju City cites the “Act on Contracts to Which Local Governments are Parties” as the basis for signing the private contract with Company A.

They argue that if a public bid were held, 160 companies nationwide would be eligible, making it unlikely for a local company to win the contract, so they considered regional economic revitalization and smooth maintenance.

Also, among the four companies in the same industry, two are startups, whereas Company A has a track record of about 20 deliveries worth 3 billion won related to control and instrumentation in the jurisdiction over the past 10 years, ensuring reliability, according to Naju City.

However, inside and outside the region, voices are rising that if regional economic revitalization was the reason, all four local companies should have submitted proposals and been considered for selection. There are also criticisms that the entry barrier for startups is high.

In response, a Naju City official explained, “We comprehensively considered unit price, reliability, maintenance, and regional economic revitalization and proceeded with the private contract based on the law,” adding, “The claim of favoritism is groundless.”

He continued, “We will strive to ensure that local companies have fair opportunities in projects promoted by Naju City in the future.”

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