[Local Power 30 Years ] Limited Audits... Unable to Prevent 'Second Daejang-dong'

Even After Requesting Corrective Action... The Same Trial and Error Repeated

[Asia Economy Reporter Lim Cheol-young] Recently, the Jeju Economic Justice Practice Citizens' Coalition issued a public statement urging Jeju Province to disclose all information related to the Odeungbong Urban Park private special development project, claiming that it was carried out similarly to the Daejang-dong case.

The Odeungbong Urban Park private special project involves constructing 1,429 apartment units on a portion of the park land measuring 95,080㎡ (12.4% of the total area), with the remaining land developed as park facilities. The organization asserted, "If the developer receives preferential treatment and leverages the advantageous location to sell units at high prices, it is expected to gain development profits exceeding 500 billion KRW."

Participation Solidarity previously released an analysis stating, "If the government sells about half of the public land in the planned 3rd new town areas to private developers as currently planned, development profits up to 3.9537 trillion KRW will accrue to private construction companies in Goyang Changneung, Hanam Gyosan, and Incheon Gyeyang."

Special favors in development project approvals, tolerance and aiding of illegal acts, and unfair contract practices frequently appear in the Board of Audit and Inspection's audits of local governments. According to the September audit report on the 'Development Project Promotion Status of Uiwang and Hanam Urban Corporations' released last year, many cases were found where development profits that should have returned to the public interest went to private businesses. Uiwang Urban Corporation established a Project Financing Vehicle (PFV) to promote the project but unjustly selected a company without experience or track record in sales agency services as the sales agency for apartment units, leading to high-priced sales agency contracts. Additionally, preferential resale rights for commercial spaces within apartment complexes, improper handling of land sales for Knowledge Culture Support Facilities I and III, and unjust transfer of overseas travel expenses to related officials caused losses of about 38 billion KRW.

Hanam Urban Corporation applied for a change in approval for an urban development project in Hanam City, but the city did not collect the recalculated difference of 1.7 billion KRW in charges for over a year. During the project, the development area increased as land previously exempt from charges for rental housing was changed to land for sale housing. Earlier, in 2019, an audit by the Board of Audit and Inspection revealed that the private condominium facility project within the Suwhae Noeul Park area in Goheungman, Goheung-gun, Jeollanam-do, was inappropriately conducted.

However, even when audits point out issues and demand corrective and improvement measures, such mistakes are repeated. Unlike central administrative agencies or metropolitan governments, audits by the Board of Audit and Inspection on basic local governments such as cities, counties, and districts have been limited, considering the Board's manpower constraints and the intent of local autonomy.

In the case of Seongnam City, there has been no regular audit by the Board of Audit and Inspection since 2011. However, internal audits often involve subjects auditing themselves, raising questions about their effectiveness. Regarding Daejang-dong, the Board of Audit and Inspection has stated that audits of Seongnam City and Seongnam Urban Development Corporation are possible. Previously, lawmakers Kim Eun-hye, Kim Hyung-dong, and Jeon Ju-hye from the People Power Party's 'Daejang-dong Task Force (TF)' submitted a public interest audit request to the Board of Audit and Inspection along with about 550 Daejang-dong residents.

[Image source=Yonhap News]

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