The Seoul city government has decided to realize public construction costs and abolish regulations related to direct construction. This is a measure to support the publicly funded construction sector, which is at risk due to the downturn in the construction market and rising building costs.
On the 9th, the Seoul city government unveiled deregulation plans No. 13 to 22. First, it will abolish the mandatory requirement for '50% direct construction' (No. 13). The Seoul government has previously required direct construction obligations to address the habitual subcontracting issues of primary contractors lacking direct construction capabilities. However, with the construction industry's capacity to perform not being supported, the burden on the industry has increased. Recently, failures in large-scale social overhead capital (SOC) projects have been repeated.
Consequently, the Seoul city government will abolish the 50% direct construction regulation and instead prioritize assessing the direct construction ratio in this year's bidding process. For construction projects with a thorough review and comprehensive evaluation bidding system valued at over 3 billion won, a direct construction ratio of 20% can earn full points.
Deregulation plan No. 14 considers 'reflecting reasonable construction costs based on urban characteristics.' In response to rising raw material and labor costs due to high exchange rates and interest rates, it promotes the realization of public project construction costs. It plans to strengthen the application of cost surcharges, taking into account small-scale projects and urban characteristics.
The Seoul city government plans to collaborate with the contracting and contract review departments to determine appropriate construction costs, ensuring that costs are reflected from the design stage through education and consulting. It will also abolish the previous practice of only including labor costs for traffic control personnel in construction costs. Plans are underway to include legal insurance fees, such as workplace accident and employment insurance, as well (No. 15).
Regulations that hinder adaptation to new environmental changes and industrial development, such as digital new technologies, will also be lifted. First, the procedures for reviewing information technology projects will be improved (No. 16). The standards for acquiring, disposing of, and managing local government property, which have been stagnant since 2008, will be increased (No. 17), and the criteria for contract reviews will be updated (No. 18). Additionally, it aims to enhance expertise through improvements to climate budget systems (No. 19).
Plans No. 20 to 22 focus on alleviating inconveniences in daily life. Starting in April, the target users for Seoul-style kids' cafes will be expanded to include 'working individuals living in Seoul' (No. 20). Currently, they can only be accessed if they are residents of Seoul or accompanied by a Seoul citizen. The entry procedures for startup support facilities will also be streamlined (No. 21). Additionally, the operating hours of the municipal comprehensive welfare center for the elderly will be extended from 9 a.m. to 1 p.m. to 6 p.m., along with extended hours for public facilities (No. 22).
A Seoul city official noted, 'In January, all departments and staff of the Seoul city government focused their efforts on identifying unnecessary regulations that hinder economic development and inconvenience the lives of citizens.' The official added, 'In the future, we will maintain close communication with the field and experts to accelerate the elimination of unnecessary regulations in all areas related to citizens' daily lives and lead innovations and changes that corporations and citizens can genuinely feel.'