This year, instead of CEOs, operational heads from major construction firms will testify at the National Assembly's Land, Infrastructure and Transport Committee audit. As concerns arise over poor construction practices and safety management at major construction sites, the separation of the Korea Land and Housing Corporation (LH) and the effectiveness of housing supply measures in the metropolitan area are expected to be key issues.
On September 30, the National Assembly's Land Committee held a full meeting to approve the audit plan and the list of witnesses and reference persons. The audit will begin on October 7, starting with the Ministry of Land, Infrastructure and Transport, and will assess policies and operations in the housing, construction, and transportation sectors.
Among the witnesses for the Ministry of Land audit are Lim Nak-ho, head of the Civil Engineering Division at Hyundai Engineering & Construction; Shim Cheol-jin, head of the Civil Engineering Division at Daewoo Engineering & Construction; and Park Jong-jin, head of the Architectural Division at POSCO E&C. Unlike last year, when many CEOs were called to testify, this year, executives responsible for civil engineering and construction will address major issues.
Lim is expected to face questions regarding construction and management issues, including the missing rebar incident at the GTX-A Samsung Station transfer center. He has also been selected as a witness for the audit of the Korea Railroad Corporation and the National Railroad Authority on October 13.
Safety issues at construction sites are also a major concern. Following a series of fatal accidents and collapses at large construction sites this year, as well as safety issues in infrastructure projects like the Shin Ansan Line, inquiries into the management responsibilities of both the contracting authority and the construction companies are anticipated. The investigation will cover the circumstances of the accidents, follow-up measures, subcontractor management, and the effectiveness of safety management systems.
In terms of policy, the reorganization of LH is a central issue. The government announced on September 3 a plan to separate LH into two entities: a 'Housing and Urban Development Corporation' (tentative name) responsible for land development and housing construction, and a 'Housing and Urban Asset Corporation' (tentative name) focused on housing welfare and asset management.
This plan aims to increase the speed of supply by separating development and housing welfare. It also proposes allocating a portion of the development corporation's profits to the housing urban fund and contributing to the asset corporation. Key issues will include securing resources to replace the existing cross-subsidy structure that has been used to cover losses from rental housing, as well as the distribution of assets and liabilities and potential supply disruptions due to the organizational separation.
The LH labor union has opposed the separation plan and has entered into a dispute process. The union argued during a rally in front of the Ministry of Land, Infrastructure and Transport on September 29 that separating the organization would lead to “disruption of work between development and asset management, incurring significant administrative costs and causing policy confusion and a supply cliff.”
The feasibility of the government's plan to supply 230,000 housing units in the metropolitan area, as outlined in the August 13 measures, will also be scrutinized. The government is pursuing follow-up measures, such as converting delayed project financing sites into LH rental housing due to lack of funding and project viability. The key question will be how much of the planned supply through new public land, idle sites, and redevelopment projects translates into actual permits and construction starts.
As the government continues to announce supply targets, the gap between plans and actual performance is expected to be a topic of debate. The progress and reasons for delays in various types of public land, newly constructed rental housing, and urban redevelopment projects will likely lead to disputes between the ruling and opposition parties and the government regarding LH's capacity to execute these projects.
Concerns over housing prices and instability in the rental market in Seoul are also expected to be addressed. Given the time lag between supply expansion and occupancy, discussions will likely focus on the effectiveness of short-term market stabilization measures and supplementary measures to alleviate the imbalance in the rental market. The impact of existing regulations, such as land transaction permission zones, on transaction volumes, housing prices, and the rental market will also be examined.
* This article has been translated by AI.
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