Gyeongnam Changwon Special City, which is conducting an internal audit of large-scale public-private development projects, announced on the 9th that it was revealed that preferential treatment was given to private developers during the promotion process of the ‘Sahwa·Daesang Park Private Development Special Project’.
Changwon City announced the interim audit results on the same day, stating, “During the 127th City Council extraordinary session on September 13, concerns were raised that the Sahwa Park project had been distorted into a project for private developers, prompting the start of an internal audit,” and added, “The audit also included the Daesang Park project, which is similar to Sahwa Park.”
Shim Byung-chul, the Inspector General of Changwon City, is announcing the interim results of the internal audit on the private development special project of Sahwa and Daesang Parks. [Photo by Lee Se-ryeong]
According to the city, the private development special project must be promoted based on the Park and Green Space Act, whereby private developers purchase the land and develop it, then donate at least 70% of the total area to the city.
Sahwa Park is being developed on a total site area of 1,246,553㎡ with a total project cost of 966.3 billion KRW, and Daesang Park on a total of 957,000.7㎡ with a total project cost of 955.3 billion KRW.
Among these, only 68.66% of Sahwa Park’s land and 54.76% of Daesang Park’s land were donated, falling short of the 70% standard set by the Park and Green Space Act.
Status of Private Development Special Cases for Sahwa and Daesang Parks. [Data provided by Changwon Special City Hall]
The city stated, “The responsible department was supposed to have private developers purchase the city-owned public land included in the park area, but under the previous mayor’s policy, preferential treatment was provided by exempting the purchase of public land.”
The reason for exempting the purchase of public land was concerns over the deterioration of the private developer’s business and the smooth promotion of the project.
“As a result of exempting private developers from purchasing public land, Changwon City incurred a financial loss worth approximately 105.1 billion KRW, including 28.7 billion KRW from the Sahwa Park project and 76.4 billion KRW from the Daesang Park project,” the city explained.
Status map of private development special projects for Sahwa and Daesang Parks. [Data provided by Changwon Special City Hall]
The city also stated that although it was agreed that part of the increased profits of the private developer due to changes in the Sahwa Park project plan would be attributed to the city as public contributions, this was not reflected in the amendment agreement.
At the time of signing the project amendment agreement, the content regarding the return of 10 billion KRW in profits proposed by the private developer was omitted from the agreement, leaving the possibility of a future financial loss of 10 billion KRW and unnecessary friction with the private developer.
Audit Officer Shin Byung-chul said, “We will take internal measures against those involved who were found to have handled their duties inappropriately or negligently, and take action according to relevant regulations for illegal and serious misconduct,” adding, “We will also require the responsible department to prepare a plan to recover financial losses caused by illegal or improper measures in the Sahwa and Daesang Park projects.”
The city plans to complete the audit of the Sahwa and Daesang Park projects by the end of this month and decide on disciplinary actions and requests for investigations against those involved.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
