On the 2nd, Seoul announced that it will develop appropriate construction cost estimation standards by identifying 12 items that were either applied at a low price or not received at all.
The developed items include seven requested by the Korea Association of Machinery and Equipment Contractors: ▲ air conditioning pipe boxes ▲ deck plate sleeves ▲ duct sleeves ▲ heat exchanger installations ▲ metal heater installations ▲ heating and cooling unit cleaning ▲ air curtain installations, and five requested by the Korea Electrical Contractors Association: ▲ through connectors ▲ shading screens ▲ streetlight arm replacements ▲ small handholes ▲ light-emitting diode (LED) lighting poles.
Construction cost estimation standards are used to calculate how much expense is incurred when installing construction materials. The government announces these standards at the beginning of each year; however, if changes in construction materials and methods are not reflected in a timely manner, local governments may create their own estimation standards.
Seoul has gathered opinions at an advisory meeting involving experts, related organizations, and contracting agencies on the necessity of establishing appropriate construction cost estimation standards for the 12 items that have not received fair compensation as a matter of practice. A 'public-private joint construction cost estimation standards task force (TES)' will be formed to begin development this month.
The appropriate construction cost estimation standards for the 12 items will be transparently developed through on-site inspections led by experts recommended by the construction association and Seoul City. The results of these inspections will undergo additional rigorous verification by professional institutions that specialize in construction cost estimation, such as the Korea Institute of Machinery and Equipment and the Korea Electrical Contractors Association, to ensure they are rational and valid.
Meanwhile, Seoul will also improve the 'construction equipment rental cost compensation (work factor)' that has been demanded by the industry. When construction equipment is used for electrical work, if the working time is delayed due to obstacles, some compensation is provided through the work factor. However, the industry has reported that rising rental costs are outpacing the work factor, leading to financial losses.
Considering the difficulties in urban construction conditions, the work factor will be applied from good (0.9) to average (0.7). This adjustment is expected to result in approximately a 30% increase in construction costs when installing a single streetlight compared to previous standards.
To prevent work factor application errors in construction equipment beforehand, Seoul plans to develop a work factor application guide and distribute it to the streetlight design department by the first half of this year.
Lee Hye-kyung, Director of the Finance Bureau of Seoul, said, "The development of appropriate construction cost estimation standards is aimed at improving the long-standing practice of not receiving fair compensation for work, which is expected to provide practical help to the construction industry."