"Preventing Losses from Nonpayment": Gangwon Development Corporation Introduces Trust-Linked Payment System

[Financial News, Chuncheon—Reporter Kim Ki-seop] A trust-based payment system will be introduced for public construction sites in Gangwon Province for the first time. The system is designed to ensure that construction workers' wages and payments to subcontractors are not interrupted even if a general contractor goes bankrupt or faces an asset seizure.
Gangwon Development Corporation said on the 23rd that it will introduce Clean Pay+, which combines a receivables trust with an electronic payment system, and apply it to construction sites it commissions in the future. The first site to use the system will be the Gangwon Comprehensive Welfare Center for Persons with Disabilities, which is currently under construction.
Clean Pay+ places construction payment claims in a trust and ensures that payments are managed and disbursed only through an account held by the trust institution. Even if the general contractor faces financial difficulties that lead to an asset seizure or bankruptcy, workers' wages, subcontract payments, and payments for equipment and materials can still be made through the trust institution.
Gangwon Development Corporation has operated Clean Pay, an electronic payment system, since 2024. This time, it went a step further than managing the flow of payments by adding a trust structure to protect the claims themselves. The corporation also decided to strengthen the requirement for payment guarantees on subcontracts worth at least 10 million won, creating two layers of protection against nonpayment: a receivables trust and payment guarantees.
Kim Tae-heon, president of Gangwon Development Corporation, said, "Even if the general contractor falters, the construction payments held in the trust institution's account must be fully returned to workers, subcontractors, and equipment and material suppliers. Starting with the construction site of the Gangwon Comprehensive Welfare Center for Persons with Disabilities, we will apply receivables trusts and payment guarantees together to eradicate nonpayment at construction sites."

[email protected] Kim Ki-seop Reporter