Daejeon Sewage Treatment Plant Private Investment Project 'Implementation Agreement'... Aiming to Start Construction Within the Year

Daejeon Mayor Heo Tae-jeong (right) is taking a commemorative photo with Hanwha Construction Vice Chairman Choi Kwang-ho after signing the implementation agreement for the "Daejeon Sewage Treatment Plant Facility Modernization Private Investment Project" on the 10th. Photo by Daejeon City

[Asia Economy (Daejeon) Reporter Jeong Il-woong] Daejeon City announced on the 10th that it has signed an implementation agreement with the tentative-named Daejeon Enviro Co., Ltd. to promote the ‘Daejeon Sewage Treatment Plant Facility Modernization Private Investment Project.’

With the signing of the implementation agreement, the city expects to complete administrative procedures such as approval of the implementation plan this year and begin construction within the year.

The implementation agreement is a type of contract concluded between the competent authority and the project operator under the Private Investment Act. This agreement includes 91 items covering the project overview, promotion method, design and construction, maintenance and operation, and investment risk sharing.

According to the implementation agreement, the city and Daejeon Enviro will promote the modernization project of the Daejeon Sewage Treatment Plant using a profit and loss sharing model (BTO-a).

The core of the profit and loss sharing model is that if losses occur after the sewage treatment plant starts operation, the private company bears up to 30% of the expected annual revenue loss, the city bears losses exceeding 30%, and conversely, if profits occur, the city and the company share the profits at a 7 to 3 ratio.

The modernization project involves consolidating and relocating the sewage treatment plant located in Wonnchon-dong, Yuseong-gu, and the manure treatment plant located in Ojeong-dong, Daedeok-gu, to Geumgo-dong, Yuseong-gu by 2027.

After modernization, the city expects the maximum daily sewage treatment capacity of the plant to reach 650,000 tons. Additionally, to block complaints such as odor generation, the sewage treatment facilities will be modernized and placed underground, and parks and convenience facilities accessible to residents will be installed above ground, according to the city’s plan.

The existing site of the Wonnchon-dong sewage treatment plant will be developed into a startup ecosystem based on science and technology, serving as an advanced base for startups and utilized as a future growth ladder for the Daedeok Special Zone.

Mayor Heo Tae-jeong of Daejeon said, "The existing Wonnchon-dong sewage treatment plant site will become a future growth hub for Daejeon, and the relocated Geumgo-dong site will be developed into a landmark space for the region, serving as a catalyst for Daejeon’s development."

Meanwhile, Daejeon Enviro is a consortium including Hanwha Construction, and the total project cost for the sewage treatment plant modernization is 721.4 billion KRW.

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