[Provided by Daegu city government]
[Provided by Daegu city government]

Daegu Mayor Choo Kyung-ho has moved to address long-standing demands from the local construction industry, announcing measures to divide public project contracts into smaller lots, raise subcontracting rates and expand financial support.

Choo presided over the third emergency economic policy meeting at the Daegu chapter of the Korea Federation of Construction Contractors on Thursday, confirming and announcing a package of measures to revitalize the construction sector.

The meeting was attended by the heads of six construction companies, including HS Hwaseong and Yujin General Construction, along with four industry associations — the Korea Federation of Construction Contractors, the Korea Specialty Contractors Association and the Korea Housing Builders Association.

Representatives from business groups including the Korea Employers Federation and the Daegu Chamber of Commerce and Industry also attended, as did officials from iM Bank, the Korea Credit Guarantee Fund, the Daegu Credit Guarantee Foundation and the Bank of Korea.

Daegu's construction sector has contracted for two consecutive years — shrinking 21.4 percent in 2024 and 19.2 percent in 2025 — making it a key drag on the local economy.

In response, the city will from October require a preliminary review of whether public projects with total construction costs of 50 billion won ($35.3 million) or more can be divided into separate contract lots.

For large-scale projects worth 100 billion won or more, the city will become the first in the country to operate a dedicated contract-division review committee. The committee will assess whether independent construction is feasible, along with economic viability and construction management efficiency.

The city will also expand local firms' participation in subcontracting. In November, it will hold a matchmaking event between major construction companies and local firms, offering one-on-one business meetings and consultations on registering as partner contractors.

From October, out-of-region construction companies taking on projects worth 5 billion won or more will be required to sign a mutual-cooperation agreement with the city, district or county office responsible for ordering or permitting the work. The city has set a target of 70 percent for the local subcontracting rate.

Financial support will also be expanded. Under an agreement to be signed in September among the city, iM Bank and the Korea Credit Guarantee Fund, around 100 billion won in guarantees will be made available to economically vulnerable sectors including construction. Each company will be eligible for guarantees of up to 1 billion won, with reduced guarantee fees and interest-rate subsidies from the city.

Separately, a dedicated 30 billion won special guarantee program for the construction industry will be established through the Daegu Credit Guarantee Foundation, offering up to 100 million won per company with preferential guarantee fees and interest-rate subsidies.

The local construction industry welcomed the measures, issuing a statement expressing strong support for the city's initiatives to revitalize the sector.

"We have institutionalized the requests that the local construction industry has consistently raised through this emergency economic policy meeting," Choo said. "We will continue to communicate frequently with the construction industry, its associations and related institutions to push forward policies grounded in real-world conditions that people can actually feel."


kbj7653@heraldcorp.com