Reasons for Proposal
The overseas construction sector has seen a recent increase in government-to-government (G2G) projects, in which governments become parties to construction contracts and manage the fulfillment of contracts.
However, no systems have been put in place to implement such G2G projects. Critics point out that to expand entry into the overseas construction G2G market, it is necessary to urgently prepare the relevant systems and respond preemptively.
Accordingly, this Amendment prescribes the procedures and responsibilities, etc., necessary to conclude and fulfill G2G contracts in the overseas construction sector. It also prescribes the designation and operation of a dedicated agency to ensure the efficient implementation of projects.
There is also growing investment demand for overseas project development and an increasing need for state-level financial assistance. To address this, the government is working towards a global plant, infrastructure, and smart city (PIS) fund.
Critics have pointed out that to preserve the special nature of this policy fund and ensure the fund’s stable, systematic operation and efficient investment, it is necessary to designate and operate an institution specializing in management.
Accordingly, the Amendment allows the Minister of Land, Infrastructure and Transport to designate and operate a specialized institution to manage collective investment schemes (funds) for overseas construction as prescribed by Presidential Decree.
Moreover, to actively support the development of overseas business by overseas construction business entities and increase financial assistance, it is necessary to strengthen the financial groundwork of Korea Overseas Infrastructure and Urban Development Support Corporation (KIND), a specialized institution.
In particular, the current Act prescribes a legal capital of 500 billion won for KIND, but this is not enough to match the growing scale of overseas projects and meet investment demand from overseas construction business entities, etc.
Accordingly, the Amendment increases the legal capital of KIND to 2 trillion won, thereby aiming to promote overseas construction by laying a stable groundwork for the operation of the organization and meet investment demand from overseas construction business entities (Article 2, subparagraph 3-2; Article 19-4 and Article 28-4, etc.).
