Securing Funding for General Hospital Construction Completed Through Revised Development Plan
Claims of Project Failure to Attract General Hospital "Completely Unfounded"
Two to Three University Hospitals Express Intent to Participate... Hospital Attraction Efforts Proceeding Smoothly
Paju City in Gyeonggi Province announced on the 29th that, following the completion of the revised development plan for the Paju Medical Cluster on the 18th, it has established a foundation for securing funding for the construction of a general hospital, including a university hospital. The city also stated that related procedures, such as land acquisition and approval for housing construction projects, are progressing smoothly, and that efforts to attract a general hospital have entered full swing.
In particular, Paju City addressed concerns that the withdrawal of Ajou University from the project would effectively derail the effort to attract a general hospital, stating that such claims are entirely unfounded. The city explained that it has actually confirmed the intention of two to three university hospitals to participate in the bidding process, and that the public contest to attract a general hospital will proceed as planned in the second half of the year.
The creation of the Paju Medical Cluster is a project aimed at fulfilling the long-held wish of Paju residents to establish a general hospital. The project has been steadily advancing, beginning with the signing of a memorandum of understanding with the National Cancer Center in June 2020, followed by an MOU with Ajou University in August 2020, the designation of the urban development zone and formulation of the development plan in March 2022, and the completion of business recognition consultations with the Central Land Expropriation Committee in July 2022.
Despite adverse external conditions, including a prolonged slump in the construction industry, the project began to gain momentum in November 2024 with the confirmation of a construction company’s participation and the commencement of land compensation procedures.
During this process, global inflation has led to increases in construction costs, labor costs, and financing expenses, which in turn have raised the overall project cost. To secure additional funding for the hospital construction, the city finalized changes to the development plan, such as increasing the number of residential units for sale. As a result, preliminary procedures for attracting the hospital are being carried out smoothly.
Notably, during the consultation with the Central Land Expropriation Committee in July 2022, it was recommended that, in order to ensure public interest and transparency, the general hospital should not be pre-designated to a specific university hospital but rather selected through a public bidding process. In line with this, the city plans to select a project operator through a public contest in the second half of this year.
Meanwhile, Paju City explained that, although it signed an MOU with Ajou University in August 2020 for the hospital’s construction and continued to discuss participation in the bidding process and support measures, Ajou University ultimately decided to withdraw from the bidding. This decision was attributed to rising construction costs due to the ongoing construction industry recession since 2022, as well as increased financial burdens and management uncertainties caused by the prolonged conflict between the medical community and the government in 2024.
Unlike other cities in Gyeonggi Province, where hospitals, construction companies, and financial institutions form consortia to jointly pursue mixed-use developments and knowledge industry centers in order to support general hospital construction costs, the Paju Medical Cluster project secures funding for the hospital in advance through urban development and residential sales. Hospitals wishing to participate are then selected, which reduces uncertainty regarding financial support for construction and eliminates the need for consortium formation, thereby ensuring stable project implementation and providing a competitive edge.
Thus far, Paju City and the project operator, Paju Medical Cluster Co., Ltd., have confirmed the intention of two to three university hospitals to participate. As planned, the city aims to select a preferred bidder through a public contest in the second half of the year and to sign a project agreement in the first half of 2026, thereby finalizing the attraction of a general hospital.
A Paju City official stated, "Contrary to some concerns, the long-standing wish of 530,000 Paju citizens to attract a general hospital is progressing smoothly. Now that support funds have been secured through the revised development plan, we will proceed without delay to attract a general hospital capable of treating serious illnesses and providing high-quality medical services within Paju City."
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