Compensation for Land in New Administrative Capital Based on Official Land Price as of Jan 1 This Year

The development of the surrounding areas of a new administrative capital will be strictly restricted until 2010. In addition, compensation for the land in the administrative capital will be decided on the basis of the official land prices as of Jan. 1, 2003.

The Ministry of Construction and Transportation (MOCT) said Sunday that it outlined a Special Management Act for Construction of New Administrative Capital. The ministry will give notice of legislation on Monday and call for the Ministry of Legislation and the state council to review before it submits the bill to the National Assembly for approval during the regular session in September.

According to the bill, the government will prohibit the development of the proposed administrative capital and its surrounding areas until 2010 in order to control real estate speculation and reckless development.

In these areas, the repair of existing houses will be allowed as in the greenbelt zones. In addition, when the proposed site for the new administrative capital is decided in the latter half of next year, the government will compensate landowners according to the official land price retroactive to Jan. 1 this year in consideration of the average climbing rate of land price in the country.

As a result, the increased amount of land prices in these areas is not reflected in the compensation.

The MOCT also established a legal basis to designate the candidate sites for the new administrative capital as land transaction permitted areas, speculation-prone areas, and speculation overheated zones.

Moreover, when landowners and future buyers apply for permission of land transaction, the government or construction parties have the preemption, practically banning the transaction.

A committee under the immediate control of the president, in charge of building a new administrative capital, will consist of 30 members including the prime minister, related ministers, and individuals representing the private sector, along with some 100 advisory officials.

In addition, public hearings must be held when designating a proposed site for the administrative capital and the adjacent areas, setting up plans of development, and relocating the central administrative organs.

The government will also form a special audit team to raise funds including selling of government complexes, issuing of state bonds, loans, and other extra revenues.

Meanwhile, it is doubtful whether this bill could pass the National Assembly as expected since some legislators of the opposition Grand National Party have submitted an Amended Special Law for Building New Administrative Capital, which requires President Roh to decide the land for the new administrative capital in Chungcheong Province until February next year as he had pledged during the presidential election last year.

Ki-Jeong Ko koh@donga.com