Local Governments Exhaust Tens of Billions of Tax, “Mitp’azindok Sang”

White elephant: Yeosu city, South Jeolla Province is suffering a headache due to Literary Hall, with construction started by Yeocheon city in 1993 before the integration of Yeosu city, Yeocheon city and Yeocheon-gun. The original plan was to establish a 26.2 billion won hall, which contains a grand theater, an exhibition building, and a little theater. However, they had to give up in the middle of construction due to financial pressure in 2000 after spending seven years since the groundbreaking ceremony.

The construction, which cost 12 billion won to date and only 42 percent completed- only the first floor, the second floor and basement- was left for three years and currently is used as a parking lot in Yeosu city hall.

Yeonsu city hall sources said, “We have been kept stranded with balancing results of a survey asking whether to continue the construction or not.”

“Let’s finish building first”: North Chungcheong Province had a plan to construct Millennium Town and attracted 100 billion won in private investments. The Ministry of Government Administration and Home Affairs approved this project on condition that it should find private investors in advance. However, while failing to obtain private investment sources and ignoring evaluations on the impacts of the construction on transportation and environment, North Chungcheong Province consumed 15.25 billion won in purchasing a site at Chuchung-dong, Sangdang-gu, Cheongju and for designing the building. However, as the construction of a golf course triggered controversy, the project dragged along for three years and was even checked for correction by the Board Audit and Inspection of Korea.

Using 34 billion won, the construction project of SeoDaegu freight station, Seo-gu, Daegu, has made no progress for seven years. The project, launched in December 2000 with a combination of 22 private companies and Daegu city, was suspended temporarily due to the bankruptcy of CheongGu, the leading company in the project, in December 1997. Even though the project restarted in June 2000, only a portion of construction, such as the site’s infrastructure and a history exhibition, has been completed.

Completion equals deficits: Mokpo City, South Jeolla Province completed Mokpo Citizens’ Cultural Athletic Center, equipping a fitness center, a swimming pool, a concert hall, and other pieces in April 2003 at a cost of 31 billion won. However, it has not managed to open this to the public and is expecting billions of won in loss per year. Even Mokpo City tried to hand the right of operation to South Jeolla Province, but the province rejected this.

Agricultural Farming Circulation Center, built by South Chungcheong Province in 1999 at Seogoe-up, Chonan, South Chungcheong Province, has racked up constant deficits, which has exhausted the 19.1 billion won in founding capital and saddled the province with 44 billion won in debts. Currently, the center is under provisional attachment and is being considered for sale. Civil groups, including Daejeon Participatory Civil Solidarity, awarded “Mitp’azindok Sang” to South Chungcheong Province, regarding the project as a representative case of wasting budgets

Residents keep eyes open: Currently the government inspects more than 20 billion won worth of projects, which are supported by subsidies. Accordingly, even though local governments launch more than 20 billion won projects, they can manage and operate projects without checks if they are not supported by the central government. Experts point that many local governments, obsessed with showing actual results, have implemented projects without thorough business plans, especially about obtaining financial assurance. Such poor plans are the reason why the local governments are suffering from headaches now.

The sources from the Ministry of Government Administration and Home Affairs said, “It is anachronistic for the central government to intervene local governments amid a supportive mood for local autonomy and thus, local governments should equip themselves with systems in which they can use budget properly. All we can do is just to strengthen evaluation process following the projects.”

Park Kwang-woo, the director of Participatory Autonomy 21 in Gwangju said, “It is indispensable to adopt the act though which the head of local government is questioned for the failure of projects.”