Daejeon Yuseong Complex Terminal Project Faces 'Grounding Crisis'... City Contemplates Public Development Option

Yuseong Complex Terminal has been a long-awaited local project since the early 2000s. However, the private sector bidding process initiated in 2010 has repeatedly failed at the contract stage, and recently, even KPIH, newly selected as the project operator, faces uncertainty in the project's smooth progress. The table outlines the progress overview of the Yuseong Complex Terminal development project prior to KPIH being selected as the operator.

[Asia Economy (Daejeon) Reporter Jeong Il-woong] The Daejeon Yuseong Complex Terminal development project is facing the risk of collapse. The Daejeon city government is also considering completing the Yuseong Complex Terminal development project through public development if the project fails.

On the 13th, according to Daejeon City and Daejeon Urban Corporation, the Urban Corporation plans to issue a notice of demand to KPIH Co., Ltd. (hereinafter KPIH) warning of the termination of the land sale contract for the Yuseong Complex Terminal site.

This is a follow-up measure after KPIH failed to fulfill its promise to normalize the project financing (PF) loan, which was scheduled for the 10th.

Previously, KPIH planned to fully pay the purchase price for part of the Yuseong Complex Terminal site, measuring 32,693㎡ (land for express and intercity bus terminals), and then finance the funds through PF loans.

However, KPIH extended the PF loan deadline from January to the 10th of this month but still failed to secure the PF loan. Moreover, New Star Yuseong First SPC Co., Ltd., a special purpose company that had loaned the land payment to KPIH, sent a letter to the Urban Corporation stating its intention to recover the loan from KPIH. This has become a sign that KPIH has effectively lost the momentum to push forward the Yuseong Complex Terminal project.

Accordingly, the Urban Corporation intends to proceed with terminating the land sale contract and canceling the business agreement if KPIH fails to normalize the loan within the set deadline after the notice of demand.

The loan normalization period given to KPIH is expected to be from the day after receiving the notice by registered mail, the 15th, until the 28th (according to civil law).

If KPIH fails to normalize the loan during this period and the project collapses, there is a possibility that the Yuseong Complex Terminal development project will be converted from a private to a public development. This is due to the burden caused by the long-term stagnation of the Yuseong Complex Terminal project, which is also a long-awaited local project.

In fact, the Yuseong Complex Terminal has been a long-standing local project pursued since the mid-2000s but has repeatedly failed at the contract stage.

Meanwhile, expectations for the project increased when KPIH was selected as the preferred negotiator in the fourth private sector bidder competition. At the time of the competition, KPIH drew up a blueprint to develop a complex passenger terminal, a bus rapid transit (BRT) transfer center, transfer parking lots, cultural facilities, and officetels on a 102,080㎡ site around Guam-dong, Yuseong-gu.

However, if the PF loan normalization fails this time, the city is likely to feel the burden of the Yuseong Complex Terminal development project repeating meaningless failures (four times) over the past decade.

Regarding this, a city official said, “The PF loan deadline was extended by three months from January to this month, but since it was not executed, KPIH’s project promotion has become uncertain. The city is not ruling out the option of converting to public development to normalize the Yuseong Complex Terminal development project, which is a long-standing local project and has been in a long-term stalemate.”

Meanwhile, despite the Urban Corporation’s notice of demand and the city’s consideration of the public development conversion card, KPIH still maintains that the Yuseong Complex Terminal development project can proceed normally.

KPIH stated, “KPIH recently signed a construction contract with Hyundai Engineering to take responsibility for the completion of the Yuseong Complex Terminal. Hyundai Engineering has also clearly expressed its commitment to the project by substituting repayment of 59.4 billion KRW for the land purchase payment (recovering the loan from New Star Yuseong First SPC).”

They added, “We will resolve the PF loan by the set loan normalization deadline (the 28th) to ensure the project proceeds without any setbacks.”

This content was produced with the assistance of AI translation services.