Kim Nam-geun, a lawmaker from the Democratic Party, criticized the multi-tier subcontracting structure in projects commissioned by the Korea Expressway Corporation and urged the revitalization of the joint contracting system that allows specialized construction firms to participate directly.
During the National Assembly's Land, Infrastructure and Transport Committee audit of the Korea Expressway Corporation on October 8, Kim emphasized the need for the corporation to manage the use of standard subcontracting contracts between primary contractors and subcontractors.
Kim pointed out that an analysis of data submitted by the Korea Expressway Corporation revealed numerous instances where general contractors subcontract work to other general contractors. He stated, “When a general contractor subcontracts to another general contractor, the likelihood of further subcontracting increases, leading to a multi-tier subcontracting structure.”
He further noted that as the number of contracting stages increases, the actual construction costs allocated for the project decrease, which can lead to quality and safety issues. Kim asserted, “At least for public projects like those from the Korea Expressway Corporation, we need to reduce the structure where general contractors subcontract to other general contractors and ensure that subcontracting occurs with specialized construction firms that actually carry out the work.”
To address these issues, he proposed the need to revitalize the joint contracting system. This system allows general contractors to participate as primary contractors while specialized construction firms join as members of the joint bidding group.
Kim urged the Korea Expressway Corporation to set an example as a public contracting agency by revitalizing the joint contracting system and requested, “For next year’s audit, please show significant results in joint contracting agreements.”
In response, Yoo Jeong-hoon, president of the Korea Expressway Corporation, stated, “We will work to revitalize this system” and added that he would prepare measures to address the issues related to subcontracting among general contractors.
* This article has been translated by AI.
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