Busan Urban Corporation Takes Proactive Steps to Resolve Construction Cost Disputes Amid Rapid Price Fluctuations, Paving Way for 48 Billion Won Support for Local Construction Industry

Decision on Cost-Sharing for Construction Price Increases at Private Sector Project Sites
Prompt Payment Enabled Through Arbitration Process at the Korean Commercial Arbitration Board

Busan Urban Corporation (BMC, President Shin Changho) has established proactive and unified policy standards to resolve conflicts over increased construction costs in public housing projects with private sector participation, which have arisen due to international instability and surging raw material prices.

Amid worsening financial difficulties in the local construction industry, the corporation has developed a comprehensive standard to be applied across all disputed project sites, aiming to reduce uncertainty at sites that have been mired in prolonged deadlock.

On December 2, Busan Urban Corporation announced, "Based on the preliminary consulting results from the Board of Audit and Inspection, and following internal management review, we have finalized conflict resolution standards that will be applied to all disputed project sites." This decision is intended to standardize the interpretation of increased construction costs, which previously varied by project, and to prevent administrative inefficiency and the prolongation of disputes.

The key principles are speed and consistency. The corporation will apply the finalized cost-sharing standards uniformly to all disputed sites and will also cooperate to ensure that the subsequent arbitration process at the Korean Commercial Arbitration Board proceeds under the "expedited procedure." By adopting this expedited procedure, disputes can be resolved within 100 days after the arbitration tribunal is formed, significantly accelerating the resolution of long-standing conflicts. After arbitration concludes, the corporation plans to promptly execute the finalized cost-sharing payments, thereby helping to improve liquidity in the local construction industry.

Shin Changho, President of Busan Urban Corporation, stated, "Rapid price fluctuations have placed a heavy burden on the local housing market and construction industry. By relying on the objective judgment of the Board of Audit and Inspection and conducting an internal review, we have proactively established the most rational standards." He added, "We will actively cooperate in the arbitration process and expedite budget execution to revitalize the stagnant local economy. We are committed to ensuring stable housing supply in Busan and fostering mutual growth with the local construction industry."

Busan Urban Corporation

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