JT Political Culture Research Institute Hosts Debate on "Is Gangwon-do's Debt Still Acceptable?"
The JT Political Culture Research Institute held a forum on the 22nd at the Sejong Hotel in Chuncheon under the theme "From Alpensia to Legoland, Is Gangwon Province's Debt Still Acceptable?" [Provided by the Political Culture Research Institute]
[Asia Economy Reporter La Young-cheol] Ahead of the upcoming presidential and local elections, the financial issues of Gangwon Province surrounding the sale of Chuncheon Legoland and Pyeongchang Alpensia are becoming a hot topic.
The JT Political Culture Research Institute, chaired by Kim Jin-tae (Chuncheon, Cheorwon, Hwacheon, Yanggu Gap), the People Power Party's district committee chairman, held a forum on the 22nd at the Chuncheon Sejong Hotel under the theme "From Alpensia to Legoland, is Gangwon Province's debt okay like this?"
At the forum, former Chuncheon City Economic Tourism Director Choi Gap-yong, Gangwon Provincial Assembly member Shim Sang-hwa, Chuncheon City Council member Jeong Gyeong-ok, and Korea Local Administration Research Institute research fellow Go Gyeong-hoon focused on examining the Chuncheon Legoland project and the Alpensia sale issue.
In his opening remarks, Chairman Kim said, "Legoland started with a mountain of debt, and Alpensia was sold leaving only debt," openly targeting Governor Choi Moon-soon's key projects.
He continued, "We need to properly understand the reality of Governor Choi Moon-soon's administration, how much debt is being left behind, and how it should be repaid," emphasizing the need for scrutiny.
He also directly criticized, "Legoland, which is about to open soon, starts with a debt of 200 billion won, and it will be difficult to repay all that debt in our lifetime. If a private company had this much debt, it would have gone bankrupt. We need to uncover the truth behind this debt party."
Choi Gap-yong, former Chuncheon City Economic Tourism Director and chair of the forum, criticized Legoland by comparing it to the "Boy Who Cried Wolf."
Choi said, "Legoland has held the groundbreaking ceremony three times and postponed its opening six times. Japan's Legoland, which started later than ours, actually opened five years earlier in March 2017."
The discovery of a large-scale prehistoric site just before the groundbreaking caused delays in the project, leading to criticism of the provincial administration.
He stated, "The children who were young in 2013 are now high school students. For Korean children, Legoland has become like the Boy Who Cried Wolf," and criticized, "The project proceeded without a systematic and comprehensive funding plan, relying on risky deferred construction and financing through the sale of surrounding land, granting preferential purchase rights and negotiation rights to specific businesses, which sparked controversy over special favors."
He also pointed out, "The Legoland and Alpensia projects are large-scale, long-term projects attractive to local government heads as campaign promises, but due to unrealistic sales plans, frequent design changes, and a vicious cycle, they have become representative cases of failed local government administration."
Concerns were also raised about Legoland potentially becoming a waste of residents' taxes and issues with unfair contracts with foreign companies.
Chuncheon City Council member Jeong Gyeong-ok stated, "Legoland, currently facing difficulties, is one of the administrative failures. Various suspicions have been raised, and although the project is ongoing, there has been no verification of its economic effects, and the residents are just watching."
Jeong emphasized, "The 2018 Legoland Master Development Agreement (MDA) also had problems. Of the total project cost of 527 billion won, Merlin Entertainment from the UK bears 447 billion won, and Gangwon Jungso Development Corporation bears 80 billion won. It looks like Merlin is investing all the project costs, but this is all debt."
She added, "The rental yield rate of 30.8% disclosed by the province suddenly dropped tenfold to 3%. This is a typical unfair contract favoring foreign companies," and pointed out, "If Legoland's annual sales are below 40 billion won, Gangwon Province earns nothing; if sales are between 40 and 60 billion won, the province receives 8% of the profits."
Gangwon Provincial Assembly member Shim Sang-hwa emphasized the need for checks and oversight of the provincial executive and pointed out Gangwon Province's financial issues.
Shim said, "Gangwon Province's debt exceeded 1 trillion won as of 2020, and household debt in Gangwon Province exceeded 22 trillion won," and stressed, "Ultimately, what has the provincial council done? How has the provincial executive operated? We cannot help but point out that reckless projects were undertaken."
He continued, "There are concerns about the alleged side agreements in the Alpensia sale, the procedural legitimacy and transparency of the sale process, the sincerity and appropriateness of the international peace city development project, and the financial soundness of the KH Group."
Shim also said, "Gangwon Province was able to develop significantly by hosting the Pyeongchang Winter Olympics. Without this opportunity, development would have been more difficult," but criticized, "Alpensia is holding back Gangwon Province's financial soundness. Alpensia was a rosy promise of the Lee Kwang-jae and Choi Moon-soon administrations."
Go Gyeong-hoon of the Korea Local Administration Research Institute pointed out problems and improvement measures regarding the province's financial status, saying, "In response to government reforms and the paradigm shift toward local decentralization, the autonomy and responsibility of local finances must be balanced harmoniously," and noted, "Gangwon Province's finances require continuous debt and liability management."
He added, "In response to changes in the economic environment within the province, such as regional economic stagnation, monitoring for risks to the sustainability of Gangwon Province's financial operations and expenditure management is necessary."
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