Incheon Airport Corporation Announces Bidding for New Operator of Yeongjongdo Golf Course

Current Sky72-Operated Golf Course, New Operator Selection Process Kicks Off
Requirements Include Experience Operating 18+ Hole Golf Courses, Credit Rating of BB+ or Higher, and Capital of Over 32 Billion KRW

[Asia Economy Reporter Kim Hyewon] Incheon International Airport Corporation announced that, as the implementation agreement for the public golf course in the Sinbul area of Incheon International Airport and the planned site for the 5th runway (hereinafter referred to as Incheon Airport Golf Course), which has been developed and operated as a support facility for Incheon Airport, is set to expire at the end of this year, it will officially begin the process of selecting a successor operator starting with a bid announcement on the 1st.

According to the bid announcement on this day, the Sinbul area, with a basic lease period of 10 years, and the golf course and practice range in the 5th runway construction site, which has a lease period set at 3 years, are bundled into a single business right and are subject to this bid.

In addition to this basic lease period, if the operator wishes at the end of the contract, the Sinbul area may be extended for up to 10 years in 5-year increments after evaluation, and the 5th runway area may be extended in 1-year increments.

To participate in the bid, experience operating a golf course with 18 holes or more, which is the standard size for a regular golf course under the Physical Education Facilities Act, for at least the past 3 years (August 1, 2017 to July 31, 2020) is required. Furthermore, to ensure stable operation of the golf course, a credit rating of BB+ or higher is required for a single participating corporation or the consortium representative company (BB0 or higher for consortium members), along with a total capital of at least 32 billion KRW.

The facility rent must be paid annually based on the sales amount generated during the lease period multiplied by the operating rate. The bidder offering the highest operating rate based on the standard operating rates presented by Incheon International Airport Corporation will be selected as the successful bidder. The annual rent amounts to a total of 32.1 billion KRW, including 25.6 billion KRW for the Sea Course and 6.5 billion KRW for the Sky Course.

The newly selected operator will proceed with preparations for operation, aiming to start business early next year after signing the lease contract and completing facility handover. Detailed information regarding the bid conditions and schedule can be found through the Incheon International Airport Corporation’s electronic bidding system.

Regarding the bid, Koo Bon-hwan, President of Incheon International Airport Corporation, stated, "Since this project attracts interest from various stakeholders, we plan to select the successor operator through a transparent and fair bidding process to avoid any disputes regarding favoritism or fairness."

Incheon International Airport Corporation plans to establish a 'Public Interest Operation Review Committee' composed of the operator, the corporation, and external experts to actively address issues and complaints that have arisen from the golf course’s operation, such as relatively high usage fees. Through this, they aim to implement enhanced public interest operation programs, including curbing excessive green fees and offering discounts to local residents and transit passengers.

Additionally, to resolve employment instability concerns for existing staff that may arise from the selection of a new operator, bidders will be required to submit a 'Commitment to Employment Stability,' and after contract signing, the new operator will be encouraged to cooperate fully in maintaining employment for existing personnel.

Regarding the policy for selecting the successor operator and the issues raised by the current operator, an official from Incheon International Airport Corporation stated, "This stems from a lack of understanding of the public asset management methods and procedures that prioritize fairness and compliance with relevant laws," and added, "It is desirable for the current operator to participate in this bid and legitimately acquire the successor business rights."

Incheon Airport Golf Course was designated as a project operator in July 2002 under the 'Capital Region New Airport Construction Promotion Act (currently the Airport Facilities Act)' through an implementation agreement with the private operator Sky72 and Incheon International Airport Corporation. Subsequently, in August 2004, it received government approval for the implementation plan and developed a standard 72-hole course, a 9-hole practice course, and practice ranges in the Sinbul area and the planned site for the 5th runway as support facilities for Incheon Airport. Sky72 developed the facility under a BOT (Build-Operate-Transfer) model, a type of private investment project where ownership is transferred upon expiration of the agreement after the private operator constructs, operates, and pays rent for the facility, and has operated it for about 15 years since August 2005. According to the agreement made at the time of signing the implementation agreement between Incheon International Airport Corporation and the current operator, the land use period is ending, and from January 1 next year, ownership of all facilities will be transferred free of charge to Incheon International Airport Corporation. The current operator completed the 'Ownership Transfer Claim Preservation Registration (Ownership Registration)' in November 2007.

Since the Sea Course is located on the planned site for the 5th runway, Incheon International Airport Corporation has prepared operational plans until the start of runway construction (currently undecided) through consultations with related agencies, expert consulting, and external expert advice. They concluded that the business method for the golf course facilities will be converted to a lease business to continue operation until the necessary land acquisition time and have been preparing the successor operator selection process accordingly.

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