Emergency Due to 'Cheolgeundaeran'... Ministry of Land Extends Construction Period and Supports Group Purchasing

Hong Nam-ki, Deputy Prime Minister for Economy and Minister of Economy and Finance, is presiding over the 37th Emergency Economic Central Countermeasures Headquarters meeting and the 3rd Innovation Growth Strategy meeting of 2021 held at the Government Seoul Office on the 9th.
[Photo by Yonhap News]

[Asia Economy Reporter Kangwook Cho] The government will support not only the extension of construction periods but also the joint purchase of rebar to alleviate difficulties in the construction industry caused by the sharp rise in rebar prices.

The Ministry of Land, Infrastructure and Transport announced on the 9th that at the Emergency Economic Central Countermeasures Headquarters meeting held on the same day, it discussed the "Response Measures to the Sharp Rise in Rebar Prices and Supply" with related agencies such as the Ministry of Trade, Industry and Energy and the Small and Medium Business Administration.

As of May, the wholesale price of rebar rose 41% compared to the same month last year, and accordingly, the distribution price increased by 85%, from 650,000 KRW per ton to 1,200,000 KRW per ton.

Since rebar material costs account for 3% of construction costs, if the current trend continues, the total construction cost could increase by about 2%, raising concerns about expanded construction delays. In fact, since January this year, an average construction delay of about 40 days has occurred at 369 public construction sites.

The Ministry of Land, Infrastructure and Transport has issued guidelines to public institutions and local governments to allow measures such as extension of construction periods and exemption from liquidated damages. It plans to encourage public clients, who have been reluctant to change construction contracts due to concerns about audits, to more actively reflect site conditions in contracts.

For private construction projects as well, the ministry has provided guidance on standard contract provisions through construction organizations to enable measures such as extension of construction periods and contract adjustments.

The ministry will form a consultative body involving construction-related associations and hold frequent meetings to monitor rebar supply trends and identify difficulties at construction sites. In particular, it plans to identify the rebar purchasing demand of small and medium-sized construction companies through construction organizations and connect them with steel manufacturers to support joint purchases.

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