"Gadeokdo New Airport: Appropriate Construction Costs Are Key"... Busan Construction Industry Speaks with One Voice

Busan Chamber of Commerce Holds Meeting on Local Construction Industry Issues

Discussion on Reflected Inflation, Appropriate Construction Costs, and Expansion of Local Company Participation

As the Gadeokdo New Airport construction project enters its full-scale implementation phase, concerns are mounting among local construction companies. With prolonged external uncertainties, as well as rising costs of raw materials, equipment, and labor increasing the burden of construction costs, there are calls for realistic costs to be reflected from the contract stage in order for local companies to participate stably in the project.

The Busan Chamber of Commerce and Industry announced on the 10th that it held the 'Gadeokdo New Airport Site Development Project Local Construction Industry Issues Meeting' at the Busan Chamber of Commerce International Conference Hall at 2:00 p.m.

This meeting was organized to listen to on-site challenges faced by local construction companies preparing to participate in the site development project, as the Gadeokdo New Airport—designated as the southern gateway airport and a key national balanced development project—moves forward in earnest. The goal was to find solutions to facilitate smooth progress of the project.

The discussion was attended by Yang Jaesaeng, President of the Busan Chamber of Commerce, Jeong Imsu, Vice President of the Gadeokdo New Airport Construction Authority, Jin Yongwoo, Director of Airport Planning at the Busan Metropolitan City, Kim Younggyu, Executive Director at Daewoo E&C, Jeong Hyeongyeol, President of the Korea Construction Association Busan Division, Kang Dongguk, President of the Gyeongsangnam-do Division, and over 20 participants including executives from local construction companies joining the Daewoo E&C consortium.

The participants shared issues and major topics regarding the progress of the Gadeokdo New Airport site development project and exchanged opinions on cost calculation, escalating material prices, and measures to expand local company participation.

The steep rise in construction costs has emerged as the most contentious issue. The local construction industry underscored that, amid rapidly changing external conditions such as the prolonged conflict in the Middle East, global supply chain instability, and rising raw material prices, not only construction materials but also equipment and labor costs have soared. They stressed that the current market situation must be adequately reflected during the project contract process.

In particular, it was pointed out that for large-scale national projects with long construction periods like Gadeokdo New Airport, the burden of price fluctuations is inevitably greater. As the scale of the materials and equipment being utilized is substantial, there were concerns that if unexpected cost surges—unforeseen at the time of contract—are not properly reflected, it would not only increase the management burden for participating companies but could also affect the project schedule and construction quality.

The demands of local companies go beyond mere compensation for costs. They argue that only by securing appropriate construction costs can the management stability of local construction companies and their partners be improved, which will in turn have a tangible effect on job creation in the region and maintaining the local construction industry ecosystem.

The issue lies with the current legal framework. According to the National Finance Act and the Act on Contracts to Which the State is a Party, there are insufficient grounds to reflect subsequent price increases in the contract for projects such as the Gadeokdo New Airport, where the main contract has not yet been signed. The industry believes that special provisions and institutional supplements are needed to address abrupt market changes.

Expanding local company participation was also a major topic of discussion. As the Gadeokdo New Airport is a large-scale national project expected to have a significant ripple effect not only in Busan but also throughout the southern region's economy and construction industry, there was an opinion that a structure allowing local construction companies to participate meaningfully should be established.

The Busan Chamber of Commerce plans to compile the on-site feedback from the local construction industry raised at the meeting and deliver it to relevant ministries, such as the Ministry of Land, Infrastructure and Transport and budget authorities. This is based on the perception that, for the successful execution of large-scale national projects, it is as essential to create business conditions that companies on-site can withstand as it is to pursue project speed.

Yang Jaesaeng, President of the Busan Chamber of Commerce, said, "Gadeokdo New Airport is a key national project that holds the future of not just Busan but the entire southern region, and therefore must proceed without setbacks under any circumstances."

He continued, "The government and construction companies must fully consider the reality that construction costs have increased significantly due to unforeseen changes in external conditions, and create an environment where local construction companies can participate stably while also ensuring both the quality and timeline of the project."

The Gadeokdo New Airport not only symbolizes regional economic revitalization and balanced national development, but is also regarded as a new growth opportunity for the local construction industry. However, concerns remain that, for the construction to proceed swiftly on site, it is critical to have appropriate construction costs and realistic measures to address price fluctuations that companies can actually handle. There is attention on whether this meeting will serve as an opportunity to translate local industry voices into institutional improvements.

The Busan Chamber of Commerce and Industry held the 'Gadeokdo New Airport Site Formation Project Local Construction Industry Issues Meeting' at the Busan Chamber of Commerce International Conference Hall on the 10th and is taking a commemorative photo.

This content was produced with the assistance of AI translation services.