'Already the Fourth' Daejeon Yuseong Complex Terminal Stalled... Legal Dispute Ignites

The Yuseong Complex Terminal Development Project has been a long-standing regional demand since the early 2000s. However, private sector bids have repeatedly fallen through at the contract stage, and recently, even KPIH, newly selected as the project operator, has been led by the Urban Corporation, the project implementer, to proceed with the termination of the land sales contract, effectively causing the project to fail once again. The table shows an overview of the Yuseong Complex Terminal Development Project before KPIH was selected as the project operator.

[Asia Economy (Daejeon) Reporter Jeong Il-woong] The private development project of the Daejeon Yuseong Complex Terminal has collapsed. This project has failed a total of four times, starting with the first public offering in 2010, followed by the second in 2011, the third in 2013, and this year. Meanwhile, the company selected as the private developer in this round has shown signs of filing a legal lawsuit, suggesting that disputes will continue for the time being.

On the 29th, according to Daejeon City and Daejeon Urban Corporation, the Urban Corporation announced the termination of the business contract with the private developer of the Yuseong Complex Terminal, KPIH Co., Ltd. (KPIH). This means that the contract for the terminal site will be terminated because KPIH failed to secure project financing (PF) loans.

Earlier, on the 13th, the Urban Corporation sent a final notice to KPIH stating that "if the loan normalization is not achieved within 14 days, the land sale contract will be canceled." The key point is that if the loan normalization is not achieved from the day after receiving the registered mail (the 15th) until the 28th, the contract will be canceled.

In line with this, since KPIH ultimately failed to secure the PF loan within this period, the Urban Corporation intends to proceed with contract termination.

First, the Urban Corporation plans to return the loan amount of approximately 59.4 billion KRW, which was provided as a land payment loan to the special purpose company New Star Yuseong First Phase, and proceed with the land sale contract termination procedure with KPIH.

Regarding this, a representative of the Urban Corporation said, "Since KPIH failed to normalize the loan by the deadline after the final notice, we are proceeding with the land sale contract termination process." They added, "From the day of the final notice until recently, KPIH has not made any statements regarding agreements related to PF or loans for project financing."

However, KPIH is opposing the Urban Corporation’s contract termination process by threatening legal action. KPIH stated, "It is true that the PF loan is difficult to secure immediately due to the financial market tightening caused by COVID-19," but also argued, "It is hard to understand the unilateral demand to abandon a project in which we have already invested over 20 billion KRW."

In particular, KPIH, which is reviewing ways to counter the Urban Corporation’s land sale contract termination with a land ownership lawsuit, said, "Recently, we signed a subcontract with Hyundai Engineering to take responsibility for the completion of the Yuseong Complex Terminal, and Hyundai Engineering has clearly expressed its intention to proceed with the project by substituting the land sale payment of 59.4 billion KRW (recovering the loan from New Star Yuseong First Phase)." They emphasized, "The fact that a leading domestic construction company is responsible for completion should also be considered a form of PF."

Meanwhile, in September last year, KPIH fully paid the land sale price of 59.4 billion KRW for the 32,693㎡ site designated for the express and intercity bus complex terminal out of the total 102,080㎡ of the Yuseong Complex Terminal development project site.

They also estimated that the total development cost would be about 800 billion KRW and planned to finance the construction costs through PF and other means. However, due to ongoing legal disputes within KPIH (between the CEO and investors), the construction schedule has been continuously delayed.

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