Incheon City 'Expels' Disqualified Bidders in Waterworks Construction... Forms TF for Investigation

Incheon City will conduct preliminary inspections to block the participation of so-called 'paper companies' and other unqualified firms in waterworks construction projects.

On the 21st, the city announced that it has prepared measures to eradicate paper companies in the waterworks sector and will conduct the first-ever survey on the registration standards for construction businesses related to waterworks facility construction.

Currently, over 420 waterworks facility construction companies are registered in Incheon. According to the Framework Act on the Construction Industry, companies must meet registration criteria such as technical capability, capital (personal asset evaluation), facilities and equipment, and office space, with the authority to verify these criteria residing with the relevant district or county offices.

Since there is a possibility that paper companies, which do not actually conduct business or exist only on paper, may participate in bids for waterworks facility construction, the city's Waterworks Headquarters plans to conduct a preliminary survey to block unqualified companies from participating in construction projects.

Incheon City Waterworks Headquarters Exterior View

The city’s Waterworks Headquarters and the Waterworks Business Office will form a joint Paper Company Inspection Task Force (TF) to conduct on-site inspections during the submission period for qualification review documents (7 to 14 days immediately after bid opening). If a company is suspected of being unqualified, such as failing to meet registration standards, the relevant district or county office will be notified to request enforcement actions, including administrative sanctions such as business suspension if violations are found.

To this end, the Waterworks Headquarters plans to explicitly state in the bid announcements for about 250 construction projects issued this year that "failure to meet construction business registration standards may result in administrative sanctions or other disadvantages." Additionally, the top-ranked bidders will be subject to document and on-site verification to check compliance with construction business registration standards.

The city will analyze the effectiveness of the preliminary survey and gradually expand the scope of inspections, focusing on depriving unqualified companies of opportunities to participate in future construction bids. Furthermore, the city plans to establish inspection provisions for substandard and unqualified companies through ordinance amendments.

Kim In-su, head of Incheon City’s Waterworks Business Headquarters, said, "To change the structure where paper companies participate in bids and gain unfair profits, we will conduct thorough inspections from the bidding stage to ensure that more orders go to excellent local companies." He added, "We ask companies to make self-purification efforts so that a fair waterworks construction market can be established."

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