Chairman Choi Young-mook of the Construction Guarantee Cooperative (CG).

Construction Guarantee (CG) accelerates efforts to lower members’ financial burden by lowering their guarantee fees and loan interests and raising guarantee and loan caps.

The institutional overhaul went into effect on July 1. The step is designed to minimize members’ financial burden and raise CG’s work convenience.

First, CG temporarily lowered each fee for prepayments and subcontract payment guarantee by 20 percent to help members overcome a crisis, caused by the COVID-19 pandemic.

But this time, CG has made lowering the fees an ordinary one.

CG has also lowered fees for fault repair guarantees and contract guarantee by 20 percent and 10 percent, respectively.

The steps are expected to lower members’s burden on guarantee fees by 20 billion won annually. The institutional overhaul has also included steps to raise caps for total guarantees and financial guarantees by 18 percent and 28 percent on an average, respectively.

As guarantee demand is on the rise in accordance with amendments of the Basic Act on the Construction Industry, calling for mandatory issuance of subcontract payment guarantee and the expanding of pre-payment guarantees, CG has easied burden from its additional contributions by raising its equity contribution cap and overhauling a cap calculation method.

Raising the cap for guarantees will go into effect on Aug. 16 after the 2021 evaluation of contractor construction capabilities conducted by the Ministry of Land, Infrastructure and Transport (MOLIT) is put on a public notice.

CG will lower loan interest rate 20 percent and raise loan cap 200,000 won per account.

Even though CG’s loan interest rates are the lowest among cooperatives, the guarantee institution has decided to lower the basic interest rate and deferment interest rate 20 percent on an average, respectively.

The steps results in lower interest rates for basic loans to between 1.1 percent and 1.2 percent, almost similar to unit prices in consideration of benchmark rate hikes. They are expected to ease members’s financial burden by 7.8 billion won annually.

A view of CG Construction Management Training Center in Chungju. (Photos: CG)

CG Implements Project to Support Safety and Innovation Consulting

CG recruited members wanting to participate in a project to offer support for safety and innovation consulting between June 10 and July 2.

The project was designed to help experts diagnose issues related to growth such as safety management and business management in which SME construction companies grapple with and recommend how to overhaul them.

The project, which made its debut in 2019, was the third rendition this year. The project has turned out to have borne fruits.

Applicants have been allowed to choose three out of a total of 15 categories, including safety management and construction/contract management in the business management segment and labor affairs and accounting in the business management segment.

Finalists will be determined via a lottery among top-priority candidates within CG’s given budget, and new participants will be prioritized.

Eighty-eight members participated in the 2020 project and performed 149 tasks. The figures represented a sharp rise over the initial project in which 58 member participants carried out 89 tasks.

A CG official said SME members would be given the chance to receive a variety of consulting opportunities the project has implemented.

In particular, members which applied for consulting services in the safety management segment would be prioritized to participate in the 2021 project in accordance with the government’s campaign to ensure construction safety, so it will serve as an opportunity to contribute to building a safety environment on construction sites and facilitating risk management, the official added.