Due to Lax Regulations, Gwanpyeongwon Sejong Special Attack Cannot Be 'Recovered'

Gwanpyeongwon Builds Office Despite Not Being a Sejong Relocation Target...171 Billion Won Budget Waste
Related Ministries Blame Each Other
Conflicting Judgments on Sejong Relocation and Special Permission Eligibility

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] The Korea Customs Service’s Customs Valuation and Classification Institute, which is not scheduled to relocate to Sejong City, built a new office building in Sejong City with a tax investment of 17.1 billion KRW. During this process, 49 affiliated public officials received special public official housing allocations (special supply), but the institute’s relocation to Sejong was finally canceled last October. However, since there are no refund regulations in the detailed criteria for special supply, the apartments that were allocated cannot be reclaimed.

According to the Administrative City Construction Agency on the 18th, the agency determines eligibility for special supply based on the "Detailed Operation Criteria for Special Supply in Happy City." They filter out households that already own homes in Sejong City or own two or more houses before supplying, but there are no specific regulations allowing cancellation or refund of special supply if the institution’s relocation is canceled.

An official from the agency explained, "Until now, there has been no case like the Customs Valuation and Classification Institute, so the detailed operation criteria do not specify refund provisions," adding, "Currently, contracts cannot be canceled."

Customs Valuation Institute, Administrative City Agency, Ministry of Strategy and Finance, Ministry of the Interior and Safety, Blame Game... "We thought it wouldn’t happen"

The Customs Valuation and Classification Institute proceeded with building the new Sejong office without confirming the Ministry of the Interior and Safety’s 2005 "Notice on the Relocation Plan of Central Administrative Agencies," which explicitly excluded four agencies including the Korea Customs Service and the Customs Valuation Institute from relocation.

The Ministry of the Interior and Safety maintained the exclusion policy, refusing to revise the notice in March 2018 and July 2019 despite the Korea Customs Service’s request to include the Customs Valuation Institute. During this process, 49 out of 82 total employees received special supply allocations. The special supply apartments, with a sale price around 300 million KRW for an 84㎡ exclusive area, saw actual transaction prices rise to as high as 700 million KRW.

In response, the Customs Valuation Institute explained, "Considering that apartment prices in Sejong City were continuously declining from 2014 to 2015, it was difficult to expect unearned income through special supply."

The Administrative City Construction Agency stated that since the institute secured the land purchase budget and obtained parliamentary approval, there was no reason to suspect anything. An agency official said, "The land purchase budget was secured from the Ministry of Strategy and Finance, and parliamentary approval was obtained, so we were unaware of the exclusion notice." The Ministry of Strategy and Finance, which provided the budget, also invested 17.1 billion KRW in taxes, considering that there was coordination between the Korea Customs Service and the Ministry of the Interior and Safety. At that time, the budget office chief was Park Chunsup, former head of the Public Procurement Service, and the second vice minister was Song Eon-seok, an independent lawmaker.

Absence of a Control Tower in Ministries, Divergent Judgments

Special public official housing allocations require confirmation of relocation to Sejong City and eligibility for subscription. Currently, the Ministry of the Interior and Safety determines whether an institution is relocating to Sejong City, while the Administrative City Construction Agency judges eligibility for special supply allocation. Because these decisions are made independently, cases where exclusion status is recognized late have occurred.

The Ministry of the Interior and Safety did not notify the Administrative City Construction Agency or the Ministry of Strategy and Finance about the exclusion notice, and the Administrative City Construction Agency did not share the final decision on special supply with the Ministry of the Interior and Safety. A government official related to this matter said, "Because the Ministry of the Interior and Safety and the Administrative City Construction Agency made judgments separately, the lack of communication seems to have been a major factor."

Meanwhile, the Administrative City Construction Agency plans to consult with the Ministry of Land, Infrastructure and Transport as needed to prepare improvement measures related to special supply. An agency official said, "Taking this incident as an opportunity, if necessary, we will coordinate with the Ministry of Land, Infrastructure and Transport, the competent ministry, to prepare improvement measures." In this regard, the Ministry of Strategy and Finance also plans to utilize the vacant Sejong office building of the Customs Valuation Institute through relocation of other agencies.