Busan Port North Harbor Coastal Cruise Project Stalled... 30 Tenants Panic After Operator Contract Termination

Busan Port Authority, 'Dream Harbor Ocean Terrace' Developer Agreement Violation Prevents Project Execution

Busan Port Authority.

[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Yong-woo] As the Busan Port North Port Coastal Cruise Development Project drags on, citizens who leased commercial spaces within the facility have found themselves in an unfortunate position of potentially losing their money.

About 30 tenants, who trusted the contracts because the commercial facilities were within a public institution, are in great shock as the project implementer’s contract was terminated by the ordering agency.

The commercial facilities in question are part of the ‘Dream Harbor Ocean Terrace’ project, which develops ship operations and ancillary facilities at the old coastal passenger pier and its hinterland in Busan North Port.

This project site involves constructing a two-story commercial building at the coastal cruise ship dock within the Busan Port Authority (BPA) premises, allowing private entities to lease and operate it.

With the project halted, about 30 tenants stand to lose deposits ranging from as little as 60 million KRW to as much as 270 million KRW each. The total damage suffered by tenants due to lease contract cancellations amounts to 3.18 billion KRW.

One tenant who signed a lease contract expressed pain, saying, “This happened due to the mistakes of BPA and the project implementer Busan Dream Harbor, so why should small business owners bear the pain?”

This issue surfaced after BPA notified the project implementer of the termination of the implementation agreement in June.

BPA stated that objective reasons casting doubt on Busan Dream Harbor’s ability to carry out the project were confirmed, and that the implementer had violated the implementation agreement multiple times, leading to the final termination of the agreement on June 23.

BPA pointed out that the implementer failed to issue a performance guarantee insurance for the agreement, proceeded with lease contracts without prior approval, and arbitrarily changed investors.

It was judged that the implementer was in a state where it could not achieve the project’s objectives.

While the victims also see the implementer as largely responsible, they argue that BPA, as a public institution, cannot escape responsibility for failing to properly supervise and manage the project.

BPA explained that according to the ‘Operation Project Implementation Agreement,’ the project implementer was responsible for fulfilling the ‘agreement performance and usage fee payment guarantee,’ which BPA urged six times, but the implementer unilaterally demanded to relax the guarantee standards such as amount and period, contrary to the agreement, and failed to meet the final deadline.

Additionally, according to the implementation agreement, the ‘shareholding ratio of investors’ cannot be changed until the end of the project operation period, but the implementer significantly reduced the shareholding ratio of members responsible for the cruise ship business, which involves citizens’ lives and safety, without permission.

BPA stated that to lease ancillary facilities to third parties, prior approval from BPA is required, but Busan Dream Harbor was found to have signed 12 lease contracts with tenants without BPA’s approval.

Furthermore, due to repeated additional lease contracts with tenants and many violations of the implementation agreement, the contract was terminated.

BPA announced that it applied to the Busan District Court in July for a provisional injunction to suspend the effect of the implementation agreement termination notice and plans to take follow-up measures based on the outcome.

With legal disputes arising between both parties, it is currently difficult to find clear remedies for the victims.

The implementer has stated that if the project is ultimately canceled, it will sell company assets to compensate, but since dispute resolution is difficult in the short term and actual compensation remains uncertain, the victims’ suffering continues to grow.

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