Oh Se-hoon: "Rapid Public Construction Orders and Groundbreaking to Supply Liquidity to the Construction Industry"

As economic and social uncertainties expand due to the passage of the impeachment motion against President Yoon Suk-yeol, the Seoul Metropolitan Government announced that it will promptly order and commence public construction projects to overcome the crisis in the construction industry.

Seoul Mayor Oh Se-hoon is delivering opening remarks at the construction sector meeting of the Emergency Economic Council held at Seoul City Hall on the 16th. Photo by Seoul City.

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On the 16th, the city held an emergency economic meeting on the construction sector attended by about 30 people, including Mayor Oh Se-hoon, related construction associations, academia, and industry officials.

Mayor Oh stated, "The construction industry is under unprecedented pressure due to rapid exchange rate hikes, high interest rates, and rising raw material prices," adding, "The increase in construction costs and delays in projects are causing a contraction across the construction market and a reduction in jobs, seriously impacting the everyday economy of ordinary citizens."

Seoul City has decided on three measures to overcome the crisis in the construction industry: △ actively promoting the prompt ordering and commencement of public construction projects △ establishing income safety nets for subcontractors and workers in small and medium construction companies △ pursuing regulatory improvements and institutional reforms.

First, to supply liquidity to the construction industry, the city will expedite the execution of budgets related to large-scale public construction projects, private investment projects, and the maintenance and repair of aging infrastructure directly linked to citizens' daily convenience, such as roads and water supply and sewage systems.

Mayor Oh emphasized, "In a situation where concerns about delays and reductions in government public SOC (social overhead capital) orders are significant, Seoul will actively promote the prompt ordering and commencement of public construction projects to ensure at least minimal liquidity supply," adding, "We will execute budgets early to protect citizens' daily lives and supply liquidity to the construction industry to stabilize the livelihood economy."

Seoul Mayor Oh Se-hoon is greeting participants of the emergency economic meeting in the construction sector held at Seoul City Hall on the 16th. Photo by Seoul City.

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Based on feedback from the construction industry, appropriate construction costs and project durations will be calculated even for public projects. Mayor Oh explained, "The background to the recent repeated failures of technical bidding and the high cost rates in the construction industry lies in the reality that appropriate construction costs are not sufficiently reflected," adding, "We will calculate appropriate construction costs and project durations to alleviate the burden on the construction industry and establish a foundation for stable growth of the construction sector."

Additionally, the city plans to directly pay wages to construction workers, including indirect workers, aiming to strengthen the system to prevent wage arrears. Currently, through the Employment Improvement Support Fund system, the city pays weekly holiday allowances (about 400,000 KRW per month) to construction workers who work five or more days a week, supports national pension and health insurance premiums for low-wage workers earning below the Seoul living wage, and provides employment improvement incentives to construction contractors who hire more than 90% domestic workers. Furthermore, starting next year, support will be provided to ensure income preservation for construction workers to maintain minimum livelihoods even under extreme weather conditions such as heatwaves and heavy snowfall.

Regulatory improvements will also be pursued to ensure smooth progress of maintenance projects. Mayor Oh said, "We will strengthen the driving force for private construction projects by easing public contribution ratios in areas with low profitability due to urban regulations and improving the non-residential ratios in commercial and quasi-residential areas."

The city also promised to expand continuous communication with the construction industry. The Construction Innovation Policy Forum and other platforms will be developed into permanent communication channels.

Mayor Oh added, "The city will fulfill its responsibilities and roles so that the construction industry can overcome the current crisis and reemerge as a robust future industry supporting the economy and jobs."

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