Building of Plants in Seoul Allowed Soon

The Ministry of Construction & Transportation (MOCT) plans to allow for the building of factories on land previously slated for housing in the Seoul area by revising a housing land development act. The act, along with the Industrial Cluster Promotion Act from the Ministry of Commerce, Industry, and Energy (MOCIE), has been used as a policy tool for decentralization, but has caused local companies including Samsung Electronics to call for its revision.

A high-ranking official at MOCT announced yesterday that the “MOCT plans to revise the current act, which allows for only venture companies to open their businesses on land designated for residential purpose in Seoul. The revised act will allow for large-scale factories to be restructured or newly built on housing land irrespective of business type.”

He also said, “The plan has been confirmed within the organization, but cannot be put into practice until the MOCIE corrects the Industrial Cluster Promotion Act.”

An amended MOCT act will be of benefit to Samsung since restriction on Samsung`s land use will be lifted. Samsung, then, will be able to set up memory semiconductor production lines additionally at the company`s 170,000 pyeong site in Dongtan, Hwasung City, Gyeonggi Province. Korea`s largest chip maker plans to invest 70 trillion won in the factory building project by 2010.

The presidential advisory council for the nation`s development showed a willingness to allow for deregulation of land development in the Seoul Metropolitan Area.

“Under the principle of nurturing development in local areas while strategically planning development in the Metropolitan area, we are open to endorsing Samsung`s new investment plan,” said a council official.

The presidential advisory council intends to present its general position at a meeting on June 12, where President Roh Moo Hyun will participate.

Ki-Jeong Ko koh@donga.com