A ready-mix concrete strike in the Seoul metropolitan area has stretched past a week, raising warnings that the construction industry could face a "bill for cost bombs." Extended construction periods bring not only the burden of liquidated damages, but also safety risks created as work is rushed to meet completion deadlines, making both major cost factors.
According to the construction industry on Monday, the Seoul-area ready-mix concrete strike that began on the 8th has pushed temporary measures such as changing the sequence of work to their limits, leaving some construction sites effectively on the verge of a "shutdown." An official at a construction association said, "We are holding out for now by changing the order of the construction process, but if supply disruptions continue beyond a week, a shutdown will be virtually unavoidable at some sites," adding that the burden on construction firms from extended construction periods has grown heavier.
What the construction industry fears most is the "extension of the construction period." For construction projects, contractors generally must bear liquidated damages equal to a certain percentage of the contract amount if they exceed the completion date. The problem is that prolonged supply disruptions make it difficult to meet the contractual completion deadline. Construction firms are securing some volume by using non-union vehicles, but this falls far short of normal supply levels. They are currently barely securing 20 to 30 percent of the total required supply, and the actual volume could be even lower when including companies that have not disclosed their supply disruptions.
According to the Construction Association of Korea, as of 5 p.m. on the 12th, concrete pouring of 160,000 cubic meters had been halted at 117 sites operated by 25 large construction firms. Converted into mixer trucks, the scale of damage amounts to about 26,200 trucks. The association believes the actual scale of damage will be far greater, given that there are about 19,000 construction sites underway in the Seoul metropolitan area.
This is why the association held an emergency meeting on the 12th and proposed to the government that it recognize delays caused by the transport union's work stoppage as a force majeure event, and either exempt or ease liquidated damages. The industry argues that measures to extend construction periods and ease liquidated damages are needed, as was done during the COVID-19 pandemic and the cargo truckers' union strike.
The problem is that even after the strike ends, the burden of safety management could increase and come back as an aftershock. Ready-mix concrete is a representative time-sensitive material that must be transported and poured within 90 minutes of production. If scheduled volumes cannot be secured, the construction sequence must be changed or work must be divided into sections. In such cases, additional reinforcement work and joint construction are required to ensure integrity with already-poured structures, raising the difficulty of the process and increasing costs. An official at a construction firm voiced concern, saying, "To meet the contractual construction period, we ultimately have no choice but to work more hurriedly in the remaining time," and "If we compress the process by concentrating manpower and equipment, the burden of safety management will inevitably grow as well."
