LH President Lee Han-jun: "3rd New Town Development to Proceed Despite Rising Debt Ratio"

Lee Han-jun, President of Korea Land and Housing Corporation (LH), expressed concerns regarding the transfer of public housing ordering authority (selection of design and construction companies) to the Public Procurement Service in accordance with the innovation plan.

Lee Han-jun, President of Korea Land and Housing Corporation (LH), is delivering a greeting at the Ministry of Land, Infrastructure and Transport press corps luncheon meeting on the 20th. / Photo by Noh Kyung-jo

At a luncheon meeting with the Ministry of Land, Infrastructure and Transport press corps on the 20th, President Lee said, "The authority for design, construction, and supervision was unified under LH to ensure that the nationally important housing supply and demand is carried out on time and without disruption," adding, "There are concerns about whether the government's housing supply policy will be implemented smoothly and whether the quality and design verification of rental housing will be fully maintained after some authority is transferred to the Public Procurement Service."

He continued, "It is not that we hesitate to transfer the authority," and added, "There are concerns related to the purpose of LH's establishment, and we are proceeding in close consultation with the Ministry of Land, Infrastructure and Transport."

The separation of LH's ordering authority originated from the collapse accident of the underground parking lot at the Incheon Geomdan New Town new construction site in April last year. When LH's preferential treatment and cartel were pointed out as causes of the accident, the government announced an innovation plan that significantly reduced LH's authority, including transferring ordering tasks. According to the innovation plan, the selection of design and construction companies previously handled by LH was assigned to the Public Procurement Service, and supervision tasks were assigned to the Korea Infrastructure Safety & Technology Corporation.

President Lee said, "LH declared that it would relinquish all vested interests to regain public trust, and in that regard, we discussed the transfer of authority," adding, "Since becoming LH president, I have emphasized upgrading the quality of rental housing, but I am concerned whether it can be properly controlled after the authority is transferred to the Public Procurement Service."

Regarding criticism that the new town projects are delayed due to late compensation timing caused by efforts to meet LH's debt ratio, he responded, "If it is for the prospective residents and the public, we will accelerate the development of the 3rd New Town even if the debt ratio rises."

President Lee said, "The government has set the debt ratio to be 208% by 2027. The debt ratio is an indicator closely related to the management evaluation of public enterprises," but added, "Since we must keep our promises to the public, we will consult with the government and not be overly concerned about the debt ratio."

Regarding the railway undergrounding project, one of the Ministry of Land, Infrastructure and Transport's key projects, he said that establishing a 'master plan' is a priority. He emphasized, "While securing funding will be crucial, it is premature to discuss costs now," adding, "We need to carefully examine the scope of railway undergrounding, priorities, the development rights of the railway surface, how to develop it, and how much development profit can be obtained."

He continued, "The railway undergrounding project is not something that can be done overnight. It completely overturns the city's pattern and requires considerable deliberation," and added, "There is a consensus forming that the Korea National Railway and Korea Railroad Corporation (KORAIL) will handle construction and operation of the underground railway, while LH will handle the development of the upper part."