'Land Speculation' LH, Allegations of Preferential Treatment for Former Officials Emerge

Kyeongsilryeon "Over Half of Private Contracts in the Last 6 Years Awarded to LH Former Officials' Firms"

[Image source=Yonhap News]

[Asia Economy Reporters Onyu Lim, Kangwook Cho] As suspicions of land speculation by LH (Korea Land and Housing Corporation) employees in new towns spread widely to local government officials, civic groups have raised allegations of preferential treatment for former LH officials. An analysis revealed that more than half of the design service contracts awarded by LH through private contracts over the past six years were won by companies that hired former LH officials.

On the 29th, the Citizens' Coalition for Economic Justice (CCEJ) announced that out of 536 design service contracts issued by LH between 2015 and 2020 through private contracts, 297 contracts (55.4%) were awarded to companies that recruited former LH employees. In terms of contract value, these companies secured 658.2 billion KRW (69.4%) out of a total project cost of 948.4 billion KRW. Furthermore, among the top 10 projects by budget, 9 included companies with former LH officials (including joint ventures).

A CCEJ official pointed out, "It is problematic that design services worth tens of billions of won were contracted through private contracts, but an even bigger issue is that all private contracts for the top 10 projects were signed during the tenure of Minister Byeon Chang-heum at the Ministry of Land, Infrastructure and Transport, when he was serving as LH president."

CCEJ also claimed that companies hiring former officials recorded high success rates in competitive bidding. Out of 290 construction project management service contracts issued through competitive bidding from 2015 to 2020, these companies won 115 contracts (39.7%). In terms of contract value, they accounted for 385.3 billion KRW (48.0%) out of 803.5 billion KRW.

A CCEJ representative stated, "LH, which continues to cultivate lobbying contractors even after retirement, must be dismantled," and added, "Minister Byeon, who has allowed former LH official hiring companies to monopolize contracts, should immediately step down from his ministerial position."

Meanwhile, regarding LH reform plans, the government is reported to have shifted its stance from the initially mentioned 'dismantling level' to slimming down the organization and reducing its functions. This appears to consider the lack of clear alternatives to immediately replace LH's functions and the risk of supply disruptions if a work gap occurs.

The government is reportedly discussing transferring land survey tasks to other agencies, considering that much of the land speculation suspicions that triggered the LH scandal involved information sharing during the initial land survey phase. There is also speculation that some functions related to housing welfare or housing construction may be separated, or that LH may retain existing land development and urban development tasks while delegating authority or roles to local governments or local public enterprises, leading to a division of responsibilities.

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