The Ministry of Land, Infrastructure and Transport (MOLIT) said on the 14th that it will begin joint special on-site inspections from the 19th at 16 redevelopment and reconstruction sites, selected from 138 nationwide that had not undergone legally required construction cost verification.
A full survey conducted by MOLIT and local governments from Aug. 27 to Sept. 22 found that 138 of the 568 redevelopment and reconstruction sites nationwide with a contractor already selected had failed to carry out the legally required construction cost verification procedure.
In recent redevelopment projects, construction costs have been set or raised excessively and legally required verification procedures have been skipped, increasing the burden on redevelopment association members and delaying projects. In response, MOLIT will conduct the special inspections in two rounds — from the 19th to the 30th of this month and from the 9th to the 20th of next month — to review whether construction costs were set and increased appropriately and whether relevant laws were observed.
MOLIT, local governments, the Korea Real Estate Board (REB) and outside experts will take part in the inspections. MOLIT will draw up the inspection plan and compile and announce the results. The REB will examine construction cost breakdowns and whether the stated reasons for cost increases are justified, while local governments will investigate violations of relevant laws and association bylaws. Outside experts will review association operations, budget execution, and service and contract procedures.
If violations of the law are confirmed, MOLIT will issue corrective orders and administrative guidance, and it plans to refer cases to investigators if serious criminal conduct such as embezzlement, breach of trust or fraud is found. For sites excluded from the special inspections, the ministry also plans to issue administrative guidance to individual associations to carry out construction cost verification.