More Than 100 Billion Won To Be Added to Expenses for Land Purchase

The fiducial point of time to indemnify for the candidates of the administrative capital relocation will be delayed from January 1 of this year to January 1 of next year. Accordingly, the expenses for land purchase is expected to increase by a minimum of more than 100 billion won.

The Administrative Capital Relocation Project Team revealed on December 18 that the fiducial point of time for indemnity was resettled as the Legislation and Judiciary Committee, which was held on December 17, eliminated the provision which had appointed it on January 1, 2003.

After the revised bill is submitted to a plenary session and is passed, the Ministry of Construction and Transportation will promulgate it in early 2004 and put it into operation.

As the bill is being amended, the government should calculate the land purchase cost by the posted price just before the development works approval under the current land compensation law.

In the case of the administrative capital relocation, selecting the location is regarded as approval for the works, and if the location is selected in late 2004, the posted price of January 1 of next year, which is just prior to location selection, will be the standard in calculating the cost for land purchases.

According to this, the government’s expenses are expected to rise as the increase in land price for a year is reflected in the land purchase cost.

According to the Ministry of Construction and Transportation, the prices of the majority of regions that had been mentioned until September of this year as a candidate for the administrative capital relocation drastically increased: Yeongi, Chungnam increased by 6.14 percent, Cheonan (4.45 percent), Nonsan (4.16 percent), Gongju (3.84 percent), Asan (3.52 percent), and Cheongwon, Chungbuk (2.69 percent)

Park Sang-gyu, a member of the Administrative Capital Relocation Project Team, expected that the overall increase rate of the candidate regions by the end of this year will average three percent. The extra 138 billion won will be added to the expenses for the land purchase of 4,600 billion won that was earmarked in “basic embodiment and location standard for administrative capital relocation” presented by Korea Research Institute for Human Settlements (KRIHS) last month.

Jae-Seong Hwang jsonhng@donga.com