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Busan Metropolitan City to Raise Local Subcontracting Rate… Launches “2026 Busan-Style Local Subcontracting Jump-Up”

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Busan Metropolitan City, led by Mayor Park Heong-joon, announced that it has established and will begin full implementation of the “2026 Busan-Style Local Subcontracting Jump-Up” plan to strengthen the competitiveness of local construction companies and expand subcontracting opportunities.

The city achieved a local subcontracting rate of 84.3 percent in public construction projects last year (2025). This year (2026), it aims to raise the rate to 90 percent for public projects and increase the rate for private projects from 56.7 percent to 70 percent.

To achieve these goals, the city will pursue a three-stage strategy this year: capacity building, tailored promotion, and administrative support.

For capacity building, the city will enhance the capabilities and competitiveness of local construction companies by implementing the Scale-Up support program and establishing and analyzing a database.

Since 2018, Busan Metropolitan City has continuously operated the Scale-Up support program for regional specialty construction companies, the first initiative of its kind in the country. It will also build a database that systematically analyzes participating companies’ construction capability evaluation amounts, number of contracts secured, and total contract value.

In addition, beginning this year, the city will introduce a new capacity-building training program for district and county officials, separate from the existing public–private joint workshops, to improve practical field capabilities and enhance understanding of relevant laws and administrative duties.

For tailored promotion, the city will develop and implement differentiated promotional strategies based on the characteristics and needs of each target group.

First, the activities of the Subcontracting Promotion Sales Team will be further strengthened. In addition to visiting headquarters of major construction companies and central public institutions involved in large-scale projects in Busan, the team will begin directly visiting headquarters of large construction firms whose local subcontracting rates are below 40 percent to request improvements. The target will also expand to include contractors involved in private investment projects.

In addition, the city will newly introduce the Subcontracting Mutual Growth Support Group for redevelopment and maintenance projects. Beginning in the early stages of redevelopment and maintenance projects, the group will encourage greater participation by local companies. Its key measures include promoting floor area ratio incentives based on subcontracting participation rates and designating dedicated officials to shorten the processing period for various permits and approvals. The city expects this initiative to help raise the local subcontracting rate.

For administrative support, the city will establish policies to increase the local subcontracting rate while creating a fair order within the construction industry.

Starting this year, the incentive and penalty system based on local subcontracting rates will be fully implemented. Construction sites that exceed a local subcontracting rate of 70 percent (or over 90 percent for public projects) will receive incentives such as public recognition as an outstanding construction company on the city’s official website, a year-end mayoral commendation, and exemption from one subcontracting status inspection.

Conversely, construction sites with a local subcontracting rate below 40 percent will face stronger measures, including meetings with the headquarters of major construction companies to request improvements and the implementation of special subcontracting inspections.

In addition, the city will install local subcontracting rate status boards at large construction sites to raise awareness among construction companies and strengthen promotional efforts. It will also conduct joint public–private subcontracting status inspections four times a year to prevent illegal or unfair subcontracting practices in advance and establish a fair construction industry order.

Mayor Park Heong-joon stated, “Amid challenging construction conditions such as prolonged high interest rates, high inflation, and shrinking private-sector orders, it is more important than ever to improve the structural competitiveness of the local construction industry and establish a fair industry order.”

He added, “Through the ‘2026 Busan-Style Local Subcontracting Jump-Up,’ in which both the public and private sectors participate, we will substantially expand contract opportunities for local construction companies, inject vitality into the regional economy, and establish a virtuous cycle within the local construction industry.”