Construction Private Projects Also Consider Reflecting and Increasing Costs When Material Prices Rise

Ministry of Land, Infrastructure and Transport Holds Construction Industry Win-Win Council Meeting
Receives Construction Cost Conflict Cases and Encourages Contract Adjustments

To prevent conflicts at construction sites caused by the sharp rise in construction material prices, a plan to introduce the 'single-item sliding' system to private construction projects is being considered. This system allows the project owner to increase the construction cost for specific materials such as rebar and ready-mixed concrete when their prices surge, and it has mainly been applied to public construction projects.

On the 8th, the Ministry of Land, Infrastructure and Transport (MOLIT) announced that it held a 'Construction Industry Win-Win Council' meeting attended by local governments, public ordering agencies, construction-related associations, and industry representatives to discuss response measures including this plan.

At the meeting chaired by the Director-General of the Construction Policy Bureau of MOLIT, participants reached a consensus on the need to amicably resolve conflicts at construction sites caused by recent increases in construction material prices and minimize damage to the public. Measures to minimize damages caused by labor shortages and construction delays due to illegal activities at construction sites were also discussed.

Specifically, a working-level consultative body consisting of experts from each field will be formed to receive reports of conflicts over construction costs related to construction materials through associations and encourage amicable agreements. Improvements to the current construction contract system will also be reviewed.

In particular, the introduction of the single-item sliding system to private construction projects, similar to public projects, and consideration of industry requests such as reflecting increased labor costs in construction costs will be examined.

Plans to promote the widespread use of the standard subcontract agreement in private construction sites by providing incentives will also be reviewed.

Guidelines will be developed to assist private project owners in reviewing the appropriateness of adjustment amounts when they receive requests for construction cost adjustments from contractors.

Additionally, through MOLIT and three construction-related associations, cases suspected of unfair practices such as collusion will be reported, and the relevant authorities (Fair Trade Commission) will be requested to strictly sanction the reported cases.

MOLIT stated, "We will continue to carry out tasks to minimize damages related to construction materials without delay, maintain ongoing communication with the industry, and continuously discover and review new tasks."

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