Oh Se-hoon: "Daejang-dong Style Public-Private Joint Project, Unimaginable for Seoul City"

[Asia Economy Reporter Oh Ju-yeon] Seoul Mayor Oh Se-hoon said that the Daejang-dong public-private joint project carried out by Lee Jae-myung, the Democratic Party presidential candidate (Gyeonggi Province Governor), is "not a true public-private joint project" and that "such a thing is unimaginable in Seoul City."

[Image source=Yonhap News]

On the 19th, at the National Assembly Public Administration and Security Committee's audit, Mayor Oh responded to a question from Lee Young, a member of the People Power Party, who said, "In yesterday's audit, Governor Lee said that in the Daejang-dong project, through public-private cooperation, profits going to the private sector were recovered as public interest, which was meaningful," and asked, "Why doesn't Seoul City promote it as a public-private joint project?"

Mayor Oh said, "In a public-private joint project, the public sector handles the risks, but in the Daejang-dong project, the private sector participated only from the point when profits were made," adding, "This is something unimaginable and strange for Seoul City." He pointed out that the project initially proceeded publicly by acquiring land, but the private sector joined once profits started to occur, emphasizing, "A public-private joint development where the private sector participates only from the profit-making stage is not a true public-private joint project." This was a veiled criticism of Governor Lee's Daejang-dong project.

Mayor Oh also criticized the special purpose corporation (SPC) established with a '50%+1 share' investment by the Seongnam Urban Development Corporation, saying, "The shareholding structure is not pure."

Mayor Oh said, "The monopoly development of the Daejang-dong project arises precisely from the 50%+1 share structure," and added, "The reason for entrusting it to the Urban Development Corporation is based on the premise that even if the land is purchased cheaply and maximum profits are made, those profits should be recovered by the public." He further stated, "However, in both the Daejang-dong and Baekhyeon-dong projects, the rental housing business was minimized. That is why the public is angry."

Mayor Oh said, "The reason for doing it publicly is based on the intention that the strong authority should use the profits from the project again for rental housing or public interest," and added, "Seoul City does not allow the private sector to take those profits."