The Jeonnam Gwangju Unified Special Metropolitan Office of Education is in conflict with the construction company as it has not paid 1.7 billion won of the construction cost to the company more than eight months after the opening of the new elementary school.
The Unified Office of Education deposited the entire construction balance of KRW 1.7 billion with the court, saying that there was a payment problem between the joint construction company and the subcontractor and the scope of the amount to be paid to the subcontractor was not clear. However, the construction company took legal action, saying that depositing the entire amount, not just the amount subject to provisional seizure, was a measure to avoid responsibility.
According to the Unified Office of Education on the 10th, the former Jeonnam Provincial Office of Education before the integration of Gwangju, Jeollanam-do ordered the construction of a new Muan Sarang Elementary School worth 17.4 billion won in June 2024.
This school, which was jointly constructed by A Construction (51%) and B Construction (49%), was completed on February 23 this year and opened in March, and the final construction cost was confirmed to be 19.06 billion won in June this year based on the results of the completion inspection.
However, the Unified Office of Education did not pay the remaining balance of 1.7 billion won, including increased construction costs and interest, for several months.
A Construction requested priority payment of around KRW 1 billion, excluding the KRW 600 million subject to provisional seizure due to a dispute with the subcontractor, but the Office of Education did not accept it.
The amount in dispute includes the increased construction cost claimed by company C, a subcontractor in charge of steel and concrete construction, without approval of the design change from the Office of Education, and the amount of provisionally seized bonds received from company C and others.
This also includes amounts related to errors in calculating the ratio of the amount paid by the Office of Education to the two construction companies at each stage of construction.
Instead of paying the construction cost, the Unified Office of Education deposited the entire construction balance of 1.7 billion won with the Gwangju District Court in September of this year.
The two construction companies and the subcontractors' share of the increased construction cost must be recalculated, but the reasons given were that the claims between the companies were conflicting and there was not enough evidence to judge the claims.
According to the Subcontracting Act, the ordering party is directly responsible for paying construction fees to subcontractors, and considering the fact that there was a direct payment agreement between the Office of Education, the construction company, and the subcontractor, the position is that the construction company cannot first pay the amount that may have to be paid to the subcontractor.
An official from the Unified Office of Education said, "The claims regarding construction input costs and separate debts between the construction company and the subcontractor were different, so it was difficult to determine on our own how much the disputed amount would be, so we deposited the entire amount."
In response, A Construction filed a lawsuit against the Office of Education alleging unfairness in the distribution of funds.
A construction side emphasized, "There were many difficulties during the construction process, but at the request of the Office of Education, we invested our own funds in advance and completed construction in time for the start of school. However, if they evade responsibility for judgment and payment by saying that it was a matter between the main and subcontractors, small and medium-sized construction companies will inevitably bear the brunt of the damage."
He added, "It appears that the direct payment agreement has been resolved with a payment guarantee," and "We requested payment of the construction cost excluding the amount subject to provisional seizure, but this was not achieved, so we are considering additional lawsuits related to the withdrawal of the deposit."
