Seoul City Saves 162.6 Billion KRW Budget Through Contract Review System

Budget Decreased by About 7% Through Contract Review, Financial Soundness Improved

Seoul City announced on the 2nd that it has achieved financial soundness by saving 4.1032 trillion KRW (approximately 7% savings rate) over 20 years since 2003, when it first introduced the contract review system nationwide, including saving 162.6 billion KRW in budget last year.

The contract review is a system designed to prevent unnecessary budget waste in advance by reviewing and examining the appropriateness of cost estimation before contract announcement for construction, services, and goods procurement ordered by Seoul City, autonomous districts, and local public enterprises. It applies to projects with ▲ construction costs of 300 million KRW or more ▲ service contracts of 200 million KRW or more ▲ goods procurement of 20 million KRW or more.

Last year, Seoul City reviewed the project budgets for a total of 3,627 projects worth 3.6247 trillion KRW ordered by autonomous districts and local public enterprises. Specifically, there were 1,489 construction projects worth 2.5047 trillion KRW and 2,138 service, goods, and private consignment projects worth 1.1199 trillion KRW.

In particular, the city saved budget through active contract reviews beyond correcting errors in design and calculations last year. For example, in the case of the "○○ Public Housing ○○ Apartment Construction Project," the city suggested adjusting the amount of soil transported by finding a construction site near the site suitable for embankment, saving 25.8 billion KRW in budget.

In this way, Seoul City operates a dedicated contract review department to prevent unnecessary budget leakage during project implementation and strives to improve the overall environment related to the contract review system by conducting integrated reviews of projects above a certain scale ordered by autonomous districts and local public enterprises.

Additionally, the city designates a concentrated review period in the first half of the year to shorten the contract review period as much as possible (from within 10 days to within 3 days) to actively support early ordering, and plans to continue promoting active contract reviews to strengthen financial soundness.

Han Young-hee, Director of the Finance Bureau, stated, “While strengthening the expertise of contract reviews to prevent unnecessary budget waste during project implementation, we expect that the saved budget will be used as investment resources for projects aimed at realizing an attractive city of Seoul.”

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