Red Light for Cheonan-si Buldang-dong Complex Government Building Construction...Rejected in Local Finance Investment Review

B/C Ratio 0.13, Project Deemed Practically Unfeasible... Project Reduction Inevitable
Cheonan-si to Retry 3rd Review in June

Cheonan City in Chungnam failed to pass the local financial investment review for the Buldang-dong Complex Office Building project due to a lack of project feasibility.

On the 30th, Cheonan City announced that it received a rejection notice from the local financial investment review for the Buldang-dong Complex Office Building.

The reason was the uncertainty in securing provincial funding and the low economic feasibility, with a Benefit-Cost (B/C) ratio of only 0.13.

The Buldang-dong Complex Office Building project has been promoted since 2022 on a site of 5,937.5㎡ at 1520 Buldang-dong, Seobuk-gu, with a total floor area of 17,000㎡, consisting of 2 basement floors and 4 above-ground floors.

The building was planned to house the Buldang 2-dong office, a library, and an underground parking lot. The total project cost was 74.429 billion KRW, with completion targeted for 2027.

However, due to the rejection in the local financial investment review, completion by 2027 has become difficult.

Above all, it was revealed that the plan for provincial funding support was not sufficiently discussed with Chungnam Province before the local investment review, making future negotiations with Chungnam Province even more important.

During the local financial investment review, the city stated that 13.6 billion KRW out of the total 74.4 billion KRW project cost would be covered by provincial funds, but the province is known to have considered provincial funding support at a maximum level of 5 billion KRW.

Also, to improve economic feasibility, downsizing the project is inevitable. The B/C ratio of 0.13 received in this review is practically no economic feasibility compared to the standard value of 1, indicating the need to secure economic feasibility by reducing project costs.

However, the city believes that the library to be housed in the Buldang-dong Complex Office Building is a relocation of the existing Dosol Library, so it did not score well in terms of economic feasibility compared to building a new library.

Additionally, since this project is a public office building and not a profit-generating project, the city holds the position that meeting a B/C ratio of 1 is not necessary.

A Cheonan City official said, “The B/C ratio of 0.13 reflects almost no economic feasibility for the library part, and we consider this figure too low even by our standards, so we plan to focus on additional persuasion efforts regarding this issue,” adding, “We will also actively respond to the third review scheduled for June by sufficiently consulting with the province to narrow the gap between the city and the province regarding provincial funding.”