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[Editorial] What Is This about a Bun-dang Real Estate Scandal?

[Editorial] What Is This about a Bun-dang Real Estate Scandal?

Posted October. 18, 2001 09:27,   


The controversy around the disclosures that Grand National Party`s Park Jong-Hee made about the alterations in the plans for developing a landmass of 39, 000 pyong in Kyongki, Sungnam city, Bun-dang Paek Koong, Jungja district could possibly become a scandal comparable to the western water incident during the Sixth Republic.

The politicians whose initials were found on the Sungnam city plans and the construction company landholding repeatedly denied the accusations. This incident, however, is too serious in nature for it to pass with an Assembly representative blowing the whistle on a potentially huge scandal and the stormy denials of those involved.

Rep. Park also questioned POSEC developers terminating the contract for building on the 39,000 pyong land after paying 281 million won in penalties. POSEC explained that it terminated the contract because of the current IMF-related financial crisis and because land use changes were not moving forward. Suspicions began to mount, however, when land use changes went through after the major developer gave up the land and smaller corporations took over.

PESCO paid the large penalty and backed off the land as the Ministry of Construction and Transportation pushed for relaxing restrictions on the right to alter plans for city development. The involved parties should clarify the situation by providing adequate explanations. If questions continue to remain unanswered, an investigation should begin.

Immediately after receiving authorization to change the city plan from Kyongki-do, Sungnam city turned the former commercial estate into a regular residential and commercial district in order to build a joint residence and business complex. Consequently, the estate increased in price two times the former value. Developers bought the land before Sungnam city could affirm the changes in the city plans, saved twice the amount of the original price, and built marketable apartments for sale. It will be a huge problem if information about the changes in the city plan leaked to the developers and gave them a large profit.

There must also be a careful review of whether the process of making the changes on the part of Sungnam city was clear and legal. When the area residents concerned about potentially negative changes in the district, they organized a collective task force and opposed development. Although Sungnam city conducted an opinion survey of the city residents, the Kyongki-do inspection found several problems. Residents whom the survey reported as supporting the development actually turned out to have never expressed such views, which led to questions about whether the survey was fixed. An investigation of how the city conducted the survey is also necessary.