Public-private cooperation talks have begun in earnest to expand the participation of local construction firms in 2 trillion won worth of development projects underway in the Busan-Jinhae Free Economic Zone (BJFEZ). The plan aims to improve a contract structure centered on large construction companies, raising the share of joint contracting and subcontracting while strengthening the competitiveness of the local construction industry.
The Busan-Jinhae Free Economic Zone Authority said it held the "BJFEZ Local Construction Firm Revitalization Meeting" at its office on the 21st to discuss ways to expand the participation of construction firms in the South Gyeongsang and Busan regions. Attending the meeting were major construction companies including Hyundai Engineering & Construction, DL E&C, DL Construction, Daebang Construction, Hanshin Engineering & Construction, HJ Heavy Industries and Booyoung Housing, along with development project operators and officials from Busan City, South Gyeongsang Province and the Construction Association of Korea, who discussed measures to expand joint contracting and subcontracting.
Participants suggested that expanded provision of information to local firms, support for partner company registration, revitalized exchange between large construction companies and local firms, and institutional improvements to expand joint contracting and subcontracting were needed. In particular, voices from the field noted that although the scope of regionally restricted bidding was expanded from projects with an estimated price of less than 10 billion won to those of less than 15 billion won starting in April, the actual volume of contracts won by local firms has fallen short of expectations.
The authority decided to expand participation opportunities for local firms as much as possible within the scope permitted by relevant laws during the development project process, and to continue support, together with Busan City and South Gyeongsang Province, to strengthen the technical capabilities and competitiveness of local construction firms. It also plans to form its own task force (TF) and operate a regular consultative body involving local governments, project operators and prime contractors to push measures to revitalize the local construction industry.
Participants agreed that expanded, active participation by prime contractors in joint contracting and subcontracting is needed for local firms to build a track record and experience and enhance their competitiveness.
Park Sung-ho, head of the Busan-Jinhae Free Economic Zone Authority, said, "The competitiveness of the local construction industry is the competitiveness of the local economy," adding, "We will strengthen our role as a bridge connecting project operators, prime contractors and local firms so that local firms can participate more broadly in free economic zone development projects."
Meanwhile, a total of 20 projects are currently underway in the Busan-Jinhae Free Economic Zone, including six development projects, six infrastructure projects and eight large-scale construction permits, with the project scale reaching 2.0486 trillion won. Key projects being pursued include the expansion of industrial and logistics infrastructure, the creation of port hinterland complexes and the establishment of transportation networks in line with the construction of Jinhae New Port and Gadeokdo New Airport.
