Ministry of Land, Infrastructure and Transport "Comprehensive Investigation of Public Land Swarm Bidding Including Winners from 10 Years Ago"

Administrative sanctions restrict companies from applying for public land for 3 years
One company, one plot policy expanded to entire Seoul metropolitan area and major provincial cities

The Ministry of Land, Infrastructure and Transport announced on the 26th that it will investigate all winning companies from 10 years ago, in 2013, to eradicate so-called swarm bidding aimed at increasing the chances of winning public land bids.

Won Hee-ryong, Minister of Land, Infrastructure and Transport / Photo by Yoon Dong-joo doso7@

This is because a recent investigation by the Fair Trade Commission revealed that swarm bidding was rampant from 2013 to 2015. Swarm bidding refers to the practice where a parent company and multiple disguised affiliates participate in bids like a swarm to increase the likelihood of winning public land.

In this regard, Hoban Construction was ordered by the Fair Trade Commission to correct unfair internal trading practices and was fined 60.8 billion won. Minister of Land, Infrastructure and Transport Won Hee-ryong said on Facebook, "I am really angry," adding, "We will investigate whether the registration criteria of (affiliated companies) during that period were met, and any further illegality will be revealed through police and prosecution investigations."

The Ministry plans to conduct on-site inspections with local governments starting in July. They will investigate whether registration criteria under the Framework Act on the Construction Industry and the Housing Act (such as office, technical personnel, capital, etc.) are met, and companies found to be illegal, such as paper companies (companies existing only on paper), will be restricted from participating in public land subscription for the next three years.

Additionally, to institutionally block swarm bidding, the one-company-one-lot system, which has been in operation since October last year, will be expanded to cover the entire metropolitan area and major provincial cities. Currently, it is only applied to some parts of the metropolitan area, such as regulated areas and overconcentration control zones, for apartment sites with 300 or more households. To this end, the Ministry of Land, Infrastructure and Transport said it will promptly amend the Enforcement Decree of the Land Development Promotion Act.

Minister Won said, "Swarm bidding is a representative unfair practice among construction companies," and added, "The Ministry of Land, Infrastructure and Transport will use all sanctions to expel paper companies from the public land market and block swarm bidding to restore fair order in the public land market."

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