Will Strict Punishment Alone Solve Poor Construction? "Without Adequate Construction Costs and Time, It's Empty Talk"

"The situation where labor and material costs must be squeezed and construction periods shortened to make a profit has remained unchanged for decades. It is difficult to expect changes just because the Serious Accident Punishment Act has been enacted. Will accidents disappear simply by strengthening punishments while leaving the current site conditions as they are?"

On the 29th, the construction industry urged the government to come up with fundamental measures, stating that "punishment-focused policies cannot prevent accidents," in response to the government's high-intensity measure called 'One Strike Out' announced as a recurrence prevention measure for the HDC Hyundai Development Company (Hyundai Development) apartment collapse accident that occurred earlier this year in Hwajeong-dong, Gwangju Metropolitan City. They said the measure bypasses key issues that have been demanded for decades at construction sites, such as guaranteeing appropriate construction costs and construction periods.

The CEO of specialized construction company A said, "The domestic construction industry is not just fiercely competitive but frequently engages in cutthroat competition based on low bidding," adding, "When the prime contractor wins the project at a low price, due to the vertical industrial structure, the cost is ultimately passed down entirely to subcontractors." Because they have to carry out construction at low costs and shorten the construction period as much as possible, they are driven to rushed 'fly-by-night construction.' Choi Seok-in, a senior research fellow at the Construction Industry Research Institute, said, "In the UK, where the annual number of construction site fatalities is only in the tens, the most emphasized aspect of the construction safety system is the creation of a safe environment by the client, meaning securing appropriate construction costs and periods." He added, "To solve problems such as safety and quality, efforts to 'pay the right price and receive the right price' and secure construction costs are essential, not just government regulatory reinforcement."

However, setting standards for the 'right price' is a practical limitation. Even recently, in Seoul's reconstruction and redevelopment sites, conflicts over 'fair construction costs' between associations and contractors frequently delay sales. Lee Eun-hyung, a senior researcher at the Korea Construction Policy Research Institute, said, "In principle, it is the contractor's role to estimate appropriate construction periods and costs," but added, "If reality does not support the principle, it is worth considering that the public sector provide guidelines on this." Especially for apartments, which are easier to standardize compared to other buildings, the potential for disputes can be minimized.

The day before, the Ministry of Land, Infrastructure and Transport decided to significantly increase the level of punishment for poor construction by introducing a 'One-Two Strike Out' system that cancels registration for companies causing human casualties above a certain standard due to substandard construction. Regarding Hyundai Development, the ministry mentioned "the strictest punishment prescribed by law" and requested the Seoul city government, the competent authority, to impose either 'registration cancellation or a one-year business suspension.' If registration is canceled, existing projects can continue, but all new projects are restricted. Since 'past performance' is a very important factor in the bidding process, if registration is canceled, the company's history itself disappears.

This measure is effectively considered a declaration of bankruptcy. An industry insider said, "In Hyundai Development's case, the housing business accounts for more than 70% of sales," adding, "If new housing orders are blocked, the company's survival will inevitably be at risk, and if the cancellation is imposed, they are highly likely to file administrative lawsuits."

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