Incheon Public Sector Construction Project Local Company Contract Amount Up 82.9%... Local Primary Contract Rate 69%

The Contract Amount for Construction Projects Ordered by State-Owned Enterprises Significantly Decreased Compared to the Previous Year

Construction site [Photo by Asia Economy]

[Asia Economy Reporter Park Hyesook] Last year, the contract amount for public sector construction projects awarded to local companies in Incheon significantly increased.

According to Incheon City on the 7th, the contract amount won by local companies in construction projects ordered by Incheon City and its affiliated organizations rose by 443.1 billion KRW (82.9%) from 534.6 billion KRW in 2020 to 977.7 billion KRW last year.

The total contract amount for these organizations nearly doubled from 745.8 billion KRW in 2020 to 1.4177 trillion KRW last year.

The local companies' primary contract rate was 69.0%, a 2.7% decrease compared to 2020, but it exceeded the target rate of 49% set by the Ordinance for the Promotion of the Activation of the Construction Industry in Incheon.

Additionally, the local subcontracting rate increased by 8.7% from 2020 to 66.0%, and the rates for local material usage, local workforce participation, and local equipment usage were 85.7%, 87.6%, and 95.9%, respectively, significantly surpassing the city’s target rate of 70%.

The city believes that marketing activities such as joint sales at large construction sites, encouraging increased local contract rates through subcontracting status inspections, and signing win-win agreements have contributed to the expansion of contracts awarded to local companies.

On the other hand, the contract amount ordered by national public enterprises based in Incheon was 1.0345 trillion KRW, and the contract amount won was 167.8 billion KRW, showing a significant decrease compared to 2020.

The local primary contract rate and subcontracting rate for national public enterprises were 16.2% and 10.7%, respectively, down 35.8% and 19.8% compared to 2020. Local material usage rate was 41.5%, local workforce participation rate was 48.8%, and local equipment usage rate was 65.3%.

This decline in local company contract rates is analyzed to be due to the low primary contract rates (7.1%, 8.0%) and subcontracting rates (11.2%, 0.0%) of large-scale projects ordered by Korea Land & Housing Corporation and Incheon Port Authority, which account for the majority of the total contract amount in the public enterprise sector.

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