2024.07.17. The Fair Economy — The Korea Land & Housing Corporation (LH) said on the 17th that it has finalized its total construction and service contract award volume for this year at 18.2 trillion won, with 15.3 trillion won scheduled for the second half.
This is an increase of 1.1 trillion won from the initial annual plan of 17.1 trillion won set by LH in February. Given that LH's average annual award volume is around 10 trillion won, this represents a rise of more than 180%.
To revitalize the private construction market, LH plans to award 15.3 trillion won in the second half, including 9.4 trillion won for public housing construction projects, focusing on stabilizing the real estate market through expanded housing supply.
The plan notably includes construction work for 5,000 units (nine projects, 1.5 trillion won) in third-generation new towns such as Namyangju Wangsuk, Goyang Changneung and Bucheon Daedang. LH stated that the groundbreaking schedule for a total of 10,000 units in third-generation new towns, including the 5,000 units that broke ground in the first half, is proceeding without issues.
By category, the construction sector accounts for 14.7 trillion won and the service sector for 600 billion won.
Key items in the construction sector include: comprehensive review award system at 10.2 trillion won (77 projects); simplified comprehensive review system at 1.3 trillion won (65 projects); qualification review system at 2.2 trillion won (504 projects); and turnkey, CM and other categories at 1 trillion won (12 projects). In the service sector: comprehensive review at 400 billion won (57 projects); qualification review at 100 billion won (243 projects); and other categories at 100 billion won (53 projects).
The comprehensive evaluation lowest bid system applies to projects with an estimated price of 30 billion won or more, determining the winning bidder through a comprehensive review of construction capability and bid price. The simplified comprehensive evaluation system targets projects with an estimated price between 10 billion won and less than 30 billion won. The eligibility evaluation applies to projects with an estimated price of less than 10 billion won, where bidders who bid at the lowest price (above the bid floor rate) are assessed for contract performance capability, and those meeting a certain standard are selected as the winning bidder.
By construction type, building and civil engineering works account for approximately 82% of the total award amount.
Specifically: building works at 10.6 trillion won (222 projects); civil engineering works at 1.9 trillion won (49 projects); electrical, communication and fire protection works at 1.4 trillion won (279 projects); landscaping works at 300 billion won (30 projects); and other works at 500 billion won (78 projects).
In the service sector, technical services such as design and supervision account for 400 billion won (243 projects), while general services make up 200 billion won (110 projects), meaning technical services represent 66% of second-half service awards.
Given the expanded issuance plan compared to the initial target, LH intends to implement the plan without delay to support recovery of the sluggish construction market and stabilize housing supply.
The company plans to closely manage monthly and quarterly award performance, with particular focus on public housing construction schedules to actively support the expanded housing supply policy and contribute to revitalizing investment execution.
LH President Lee Han-jun stated: "Through this adjusted award plan, we aim to smoothly execute the groundbreaking of 50,000 public housing units by year-end, including 10,000 units in third-generation new towns. Next year, we target the groundbreaking of 60,000 public housing units, and will begin awards in the second half of this year so that some can break ground in the first half of next year, leading the way for swift real estate market stabilization."
Details of this award plan are available on LH's website electronic procurement system (ebid.lh.or.kr) starting from the 17th.
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