To alleviate the burden on the construction industry, the government has implemented the reflection of price increases in public construction costs. The Ministry of Economy and Finance announced on the 18th that it is accelerating the progress of delayed public construction projects through the implementation of the revised "total project cost management" guidelines.
The previous price reflection standard applied the lower index between the "Construction Cost Index and the Gross Domestic Product (GDP) Deflator for Construction Investment," but the latest guideline revisions have unified this to apply the "GDP Deflator for Construction Investment." Additionally, it includes provisions to ensure that public projects can be undertaken in a timely manner during periods of soaring raw material prices.
In fact, according to these revised criteria, the total project cost for the "Gadeokdo New Airport Access Road" project has been adjusted upward by 15.2 billion won, increasing to 662.1 billion won. Under the previous criteria, applying the Construction Cost Index would have resulted in a "negative" estimation for the project cost, whereas applying the GDP deflator has led to an increase in the total project cost.
The government plans to promote the allowance of self-adjustment for "price increases" in the execution design stage related to lump-sum bidding projects contracted through private agreements. A Ministry of Economy and Finance official noted, "This is expected to accelerate the delayed lump-sum bidding projects contracted through private agreements," adding that it intends to apply this as soon as the revision of the Enforcement Decree of the National Contract Act is completed.