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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] A recent survey found that 44% of construction projects completed over the past three years operated at a loss.
The Korea Construction Association and the Korea Institute of Construction Industry conducted the survey from September 11 to November 6, targeting 150 companies. According to the results, 43.7% of projects completed between 2023 and 2025 reported losses.
The main reasons cited for unprofitable construction were underestimation of project costs and failure to adjust contract amounts during the construction phase. The association noted that since 2020, sharp increases in construction costs have not been adequately reflected in project pricing.
In a separate survey of 123 companies during the same period, 64.1% indicated that project durations were not appropriately estimated. Due to insufficient project timelines, 22% of projects incurred liquidated damages or required additional manpower and equipment to meet deadlines.
The association plans to push for the prompt passage of amendments to the National Contracts Act, aimed at providing additional costs for extended durations in long-term projects. They also propose expanding the threshold for excluding bids below 98% of the estimated project cost from projects under 100 billion KRW to those under 300 billion KRW, as well as allowing appeals against unfairly calculated estimated prices.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
