LH Excludes 1.3 Million Square Meters, Including Former Chungnam Textile Site, from Industrial Complex to Pass Preliminary Feasibility Study
Production Inducement Effect Decreased by 5.23 Trillion Won in Preliminary Feasibility Study Application Due to Area Reduction and Exclusion of Compensation Costs
Taekgu Lee, Executive Vice Mayor for Political, Economic and Scientific Affairs of Daejeon City, is giving a briefing on the "Nano Semiconductor National Industrial Complex Development" at the city hall briefing room on the 17th. (Photo by Seokbong Mo)
The reason for the 5.23 trillion won decrease in the production inducement effect related to the "Nano Semiconductor National Industrial Complex Development" in Daejeon has been identified as the reduction of 1.3 million square meters in area and the exclusion of compensation costs.
Daejeon City has clarified its position regarding the 5.23 trillion won gap between the 6.2 trillion won production inducement effect announced when the candidate site was selected in March 2023 and the 970 billion won announced when the city began the preliminary feasibility study last year for the "Nano Semiconductor National Industrial Complex Development."
On the 17th, Taekgu Lee, Executive Vice Mayor for Political, Economic and Scientific Affairs of Daejeon City, stated during a briefing on the "Nano Semiconductor National Industrial Complex Development" that "in March 2023, the candidate site in Gyochon-dong, Seo-gu, Daejeon, was 5.3 million square meters. However, during the application process for the preliminary feasibility study, LH, the project implementer, reduced the area by about 1.3 million square meters?including the former Chungnam Textile site, part of the Honam Expressway, and steeply sloped land?to secure project feasibility."
This reduction was made because it was predicted that if compensation for the former Chungnam Textile site was included, compensation costs would exceed 1 trillion won, making it difficult to pass the preliminary feasibility study.
Vice Mayor Lee explained that although 1.3 million square meters were reduced during the preliminary feasibility study application process, there has been no change to the originally planned 2 million square meters of industrial land.
He particularly noted that the 6.2 trillion won production inducement effect announced by Daejeon City in March 2023 was calculated by including compensation costs in the development expenses, which resulted in this figure.
However, he explained that when applying for the preliminary feasibility study, the production inducement effect was calculated as 970 billion won because compensation costs were excluded in accordance with KDI standards.
The KDI standard stipulates that compensation costs should be excluded in preliminary feasibility studies or policy project evaluations to ensure objectivity and conservatism, as including compensation costs could inflate the production inducement effect.
Ultimately, the decrease in the production inducement effect is attributed to the reduction of 1.3 million square meters in area and whether or not compensation costs are included.
Vice Mayor Lee stated, "Going forward, we will actively consult with central government agencies and LH to ensure that the area of the national industrial complex can be as close as possible to the original plan."
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