Construction Costs May Rise Further... 'Inflation Rate' Reflected in Private Construction Project Expenses

[Asia Economy Reporter Minyoung Kim] The consumer price inflation rate will be reflected in the calculation of construction costs for private construction projects. A system that reduces penalty points for construction contractors and registered housing construction businesses based on the period without fatal accidents at construction sites will also be applied to construction engineering businesses.

The Ministry of Land, Infrastructure and Transport announced on the 5th that it held the 3rd meeting of the 'Land and Transport Regulatory Reform Committee' on the 31st of last month, where it reviewed and approved 19 regulatory improvement plans including these measures.

Currently, in private construction contracts, increases in material costs for specific items such as rebar and concrete are partially reflected in construction costs, but overall price increases are not properly reflected. The Regulatory Reform Committee specified in the standard private construction contract not only the 'item adjustment rate' method but also the 'index adjustment rate' method, allowing construction costs to be increased according to changes in indices such as the consumer price inflation rate.

When an accident occurs at a construction site, the reporting time to the ordering agency and licensing authority will be relaxed from within 2 hours to within 6 hours. The time for the ordering agency and licensing authority, which receive the on-site report, to make a secondary report to the Ministry of Land, Infrastructure and Transport will also be adjusted from within 24 hours to within 48 hours. This is to ensure that there is no negligence in emergency measures such as rescue after an incident occurs.

The scope of building extensions exempt from review by the Urban Planning Committee will be relaxed from within 5% of the existing site area to within 10%, and site expansion accordingly will be allowed within 10% of the site area. Installation of agricultural product cold storage (refrigeration facilities) necessary for farming activities within the Greenbelt (GB) is being considered as an allowable installation. Additionally, mid- to long-term reviews will be conducted on measures such as allowing animal hospitals to be located in Type 1 neighborhood living facilities and removing regional markings from two-wheeled vehicle license plates.

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