Won Hee-ryong "Suspending Service Contracts with LH Former Officials' Companies... Reforming the Interest Cartel"

"Suspension of Service Contract Procedures with Former Officials' Firms"
Comprehensive Plan to Reform Interest Cartels to be Announced in October
Concerns Over Public Housing Supply Disruptions Due to Exclusion of Former Officials' Firms

On the 15th, Won Hee-ryong, Minister of Land, Infrastructure and Transport, instructed the Korea Land and Housing Corporation (LH) to completely halt the service contract procedures with former officials' companies as a follow-up measure to the 'apartment rebar omission' incident.

The Ministry of Land, Infrastructure and Transport announced that Minister Won, who is currently on an overseas trip attending the inauguration ceremony of the President of Paraguay, received a report on the progress of the service procedures with LH's former officials' companies and then issued this directive.

[Image source=Yonhap News]

Minister Won stated, "It is unacceptable to proceed with service-related procedures as usual without any improvement measures amid public criticism," and instructed, "LH must completely stop the service contract procedures with companies employing former officials, and the Ministry of Land, Infrastructure and Transport must promptly prepare measures to dismantle the vested interest cartel."

After LH disclosed the list of apartment complexes with 'rebar omission,' it announced the bidding results for five design services and one supervision service over a period of fifteen days, all six design and supervision services having been awarded to companies employing former LH officials.

The Ministry of Land, Infrastructure and Transport explained that the suspension of existing service procedures will continue until measures to resolve the vested interest cartel related to former officials at LH are established.

LH has proposed a plan requiring construction participants in design, construction, and supervision to submit a list of former LH employees working at their companies, with contracts to be canceled and future bids restricted if false lists are submitted. They are also considering giving additional points to companies without former officials.

The Ministry plans to announce a comprehensive plan to dismantle the vested interest cartel by October, with measures related to former officials to be announced and applied as soon as they are established.

However, within the industry, there are concerns about whether any companies will be able to participate in LH bids if all former officials' companies are excluded. There are also significant worries that the temporary suspension of some existing service contracts amid the anticipated large-scale restructuring of LH could disrupt the supply of public housing.

The contract procedures halted by Minister Won's directive include design and supervision services for public housing districts such as Daejeon and Sejong Jochiwon. A Ministry of Land, Infrastructure and Transport official stated, "We will try to avoid any delays in the overall public housing supply schedule as much as possible."

Earlier, LH President Lee Han-jun announced an innovation policy to drastically reduce both the regional headquarters' internal organizations and the head office organization, while assuring that the LH projects worth 8.2 trillion won scheduled for the second half of this year will proceed without disruption.

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