Busan construction industry calls for rising material costs to be reflected in Gadeokdo airport contract

The Busan Chamber of Commerce and Industry hosted a forum Monday afternoon on key issues facing the regional construction industry for the Gadeokdo New Airport site preparation project, held at the international conference hall on the second floor of the chamber's building.

The forum was organized to hear the concerns of local construction firms preparing to participate in the site preparation work and to explore ways to ensure the project proceeds smoothly, as construction of the Gadeokdo New Airport — the planned gateway for the southern region — moves into full swing.

About 20 people attended, including Busan Chamber of Commerce and Industry Chairman Yang Jae-saeng, Gadeokdo New Airport Construction Authority Deputy Director General Jeong Im-su, Busan city airport planning division chief Jin Yong-u, Daewoo Engineering & Construction executive director Kim Yeong-gyu, Korea Construction Association Busan chapter Chairman Jeong Hyeong-yeol, South Gyeongsang Province chapter Chairman Kang Dong-guk, and representatives of local construction firms participating in the Daewoo Engineering & Construction consortium.

Participants discussed key issues and major points of contention in the site preparation project, and exchanged views on construction cost estimates, rising material prices and ways to expand local firm participation.

The regional construction industry urged that the sharp rise in costs — covering not only construction materials but also equipment and labor — driven by the prolonged war in the Middle East, global supply chain instability and surging raw material prices, be adequately reflected in the construction contract.

Participants expressed particular concern that for a large-scale national project like the Gadeokdo New Airport, with its long construction period and substantial material and equipment requirements, failure to sufficiently account for sharp price fluctuations at the contracting stage could increase the burden on participating firms and affect both the project schedule and construction quality.

Participating companies said that securing adequate construction costs was essential to improving the financial stability of local firms and their partners, and to contributing to local job creation and protecting the construction industry ecosystem.

However, under current law — including the National Finance Act and the Act on Contracts to Which the State Is a Party — there is no legal basis for reflecting price increases in a project like the Gadeokdo New Airport construction where the main contract has yet to be signed, meaning a separate special provision would be required. The Busan Chamber of Commerce and Industry plans to relay the industry's on-the-ground views from the forum to the Ministry of Land, Infrastructure and Transport and budget authorities.

"The Gadeokdo New Airport is a core national project on which the future of not just Busan but the entire southern region depends, and it must proceed without any setbacks under any circumstances," chamber Chairman Yang said. "The government and the contractor must take into account the reality that construction cost burdens have grown significantly due to unavoidable changes in external conditions, and create an environment in which the regional construction industry can secure both project quality and the construction timeline."