‘New City’ Relocation Plans Criticized

An executive at the Korean National Housing Corporation (KNHC), which is to relocate to Gyeongnam Province, said on yesterday, “We will relocate since it is a government policy. But it is frustrating to think about the projects that we were working on in the Seoul Metropolitan area.”

He added, “Already, 60 to 70 percent of our projects are concentrated in the Seoul Metropolitan area. If construction of the second generation of new cities, including Paju New City and Yangju New City, begins in full swing, we will need to concentrate more manpower in the area.”

Chung Jong-haw, head of the KNHC union, predicted, “Even if the headquarters moves to the Gyeongnam area, it will be only the nominal headquarters. It might be like a ‘dual operation,’ with the regional headquarters in Seoul Metropolitan area doing all the work.”

The problem is many of the 175 public corporations slated for relocation to the provincial areas share the same concerns.

Duel Operation Would Be Inevitable-

The situation is the same for the Korea Land Corporation’s (KLC) move to Jeonbuk Province.

As the KLC should develop an additional 10-milion-pyeong in building land in the Seoul Metropolitan area due to the second generation new city project and comprehensive real estate measures introduced on August 31, many staff members will inevitably suffer inconvenience of shuttling between the area and the headquarters in Jeonbuk.

The Korea Institute of Ceramic Engineering and Technology (KICET) and Korea Testing Laboratory, to be sent to Gyeongnam Province, are facing an even worse situation. With most related companies being in Guro-dong, Seoul, the KICET must come to Seoul whenever there is a need to contract work to those companies.

The Korea Securities Depository, scheduled to go to Busan, has a similar concern. Considering that capital markets and all associated institutions are concentrated in Seoul, its relocation to Busan would cost it an estimated 10 billion won annually due to the need for more business trips to Seoul.

Government Considers Legislation for Minimizing Move’s Side Effects-

To deal with this issue, the government is planning to draw up measures after completing its selection of innovation city which is the area to host the public corporations.

The selection of innovation city was supposed to be completed by late September, but currently is finished in just four cities and provinces as of November 30.

The government convened a meeting on the issue that day in which representatives from 11 cities and provinces participated. Attendees agreed to complete the selection by December 15.

The Ministry of Construction and Transportation is considering a special law to minimize the side effects caused by relocation of public corporations.

Reportedly, the planned special law would include provisions that, if industrial characteristics are recognized, allow public corporations that relocate to leave some staff in the Seoul Metropolitan area, and that increase housing support for staff members of relocated corporations to reduce side effects, such as separations from family caused by the relocation.

However, experts point out that the effects of such measures would be limited.

Kwon Hae-su, professor of public administration at Hansung University, warned, “There is a precedent in which the National Computerization Agency, affiliated with the Ministry of Information and Communication, relocated to Yongin, Gyeonggi Province but moved back to Seoul. If the relocation of public corporations is pushed forward as it is now, the same situation could happen.”

Kwon also pointed out, “With decision-making authority solely in the hands of central government, a spread of public corporations across the country inevitably causes problems,” adding, “The government should consider measures to decentralize authority.”

Hwang Hee-yeon, a professor of urban engineering at Chungbuk National University, said, “The policy is headed in the right direction. But the possibility of side effects has become high since the government pushed ahead with it on deadline. It is time to slow down, review the relocation method, and fit each relocating public corporation’s characteristic.”

Seung-Heon Lee Jae-Seong Hwang ddr@donga.com jsonhng@donga.com