Specialty contractors' chief warns mutual market opening pushing firms 'to the brink'

"The mutual opening of the construction market is pushing specialty contractors to the brink," said Yoon Hak-su, chairman of the Korea Specialty Contractors Association.

Yoon made the remarks Tuesday at a press briefing near the government complex in Sejong, addressing the mutual market opening policy that has become the flashpoint of conflict between general and specialty contractors.

Yoon said the government must swiftly devise measures to protect the specialty construction sector, and announced plans to submit 14 policy recommendations — including on the mutual market opening issue — to the Ministry of Land, Infrastructure and Transport and other agencies this month.

The mutual market opening system Yoon criticized was introduced through a 2021 legislative amendment. The reform allowed general contractors to take on projects worth 430 million won ($313,000) or more, while also permitting specialty contractors to carry out general construction work.

But smaller specialty firms say the policy has created an uneven playing field, contrary to its stated intent. "The specialty construction market has been opened 56.7 percent, while the general construction market has been opened only 8.7 percent," Yoon said. "General contractors have been moving into the specialty market, where projects under 1 billion won make up a large share, leaving small and midsize specialty firms in serious financial difficulty."

Yoon urged the National Assembly to swiftly pass an amendment to the Framework Act on the Construction Industry aimed at protecting specialty contractors. The bill, introduced in April by Democratic Party of Korea lawmaker Moon Jin-seog, would restrict projects worth 1 billion won or less to specialty contractors only. General contractors have maintained their opposition to the measure.

"Specialty and general contractors need to coexist and grow together," Yoon said. "That is the only way the construction industry can stand on solid ground and provide a safe environment for the public."

The association also raised concerns about a government plan under review to expand the use of standard market unit prices for public construction projects worth less than 10 billion won, warning the move could reduce construction costs and compromise safety and quality. The government has been reviewing the expansion after President Lee Jae Myung raised questions about the cost-calculation method for public works at a Cabinet meeting in June. Kim Hwan-ju, head of the association's management policy division, said standard market unit prices in 2026 stand at about 91.2 percent of the standard cost estimate. "If projects are designed using standard market unit prices — already about 10 percent below the standard estimate — and then awarded at a contract rate of 86 to 88 percent, construction costs will fall further," Kim said. "The government says it wants to ensure safety, but this would effectively leave safety unattended."

Yoon echoed the concern. "Specialty contractors cannot afford to operate at a loss," he said. "Insufficient construction costs ultimately lead to problems with safety, quality and defects — and it is the public that bears the consequences."