Report: Industrial City Project Doomed to Fail

Six industrial cities under construction are unlikely to achieve their intended results since they are driven by the government rather than business feasibility, a study said yesterday.

Several of the areas will have trouble attracting business and investment and create the phenomenon of “industrial cities without industries,” the report by the Land, Transport and Maritime Affairs Ministry said. The report was prepared for lawmaker Kim Tae-won of the ruling Grand National Party.

Industrial cities received 3.31 out of five points for prospects, lower than the score for industrial complexes in provinces (3.68).

The industrial city project was pushed for by the previous Roh Moo-hyun administration.

Cheongju in North Chungcheong Province seeks to be an information technology hub and Wonju in Gangwon Province a bio-industry hub, but both are unlikely to attract large companies to ensure success, the report said. The two cities were cited for lacking strong universities to back up research and development.

Muan County in South Jeolla Province has pledged to become a logistics hub, but whether it can attract investment is doubtful.

Taean County in South Chungcheong Province, Muju County in North Jeolla Province and Yeongam and Haenam counties in South Jeolla Province all hope to attract more tourism and leisure industries, but low accessibility and commercial viability pose as obstacles, the report said.

Taean, Wonju and Cheongju have received permission to go ahead with their city projects and held their groundbreaking ceremonies, but the remaining three areas have seen no progress due to changes in construction companies or delay in capital payments.

“The reason progress is slow is that the goal of the industrial cities and the manner of development conflict,” the report said. The projects are private-driven in appearance but the central government chose the locations to achieve balanced national development, damaging their prospects, it added.

koh@donga.com