Yongin City to Improve Standards and Procedures for Determining Ambiguous Industrial Complex Development Costs

Clearly Define the Ambiguous 'Approval Authority Consultation'
Enhancing Reliability... Also Expecting Paper Price Reduction

Yongin City in Gyeonggi Province is improving the standards and procedures for confirming industrial complex development costs, which had concerns of arbitrary calculation due to ambiguous regulations.

On the 25th, Yongin City announced that it will implement the "Improvement Plan for the Confirmation Procedure of Industrial Complex Development Costs," which clearly defines the verification process to enhance the transparency and reliability of industrial complex development costs.

The city created this improvement plan in response to criticisms that the existing standards and procedures for confirming industrial complex development costs were unclear.

For industrial facility sites within industrial complexes, the regulations stipulate that the cost is initially estimated for sale and then finalized afterward. However, the procedures or regulations for confirming the development cost after the industrial complex completion approval are not clear.

In fact, the Ministry of Land, Infrastructure and Transport's "Integrated Guidelines on Industrial Site Development" states that the settlement is based on the confirmed development cost within one month after the completion approval, but only specifies that it is "confirmed through consultation with the approving authority."

To finalize the development cost, it is necessary to review whether the cost details were appropriately accounted for and whether any inappropriate expenses were included. However, due to the lack of clear procedures or standards, issues such as delays in settlement or administrative cost consumption occurred depending on the submission of settlement documents, selection of service agencies, and duration during the appropriateness review process.

According to the city, in some industrial complexes, the development cost verification process was conducted only two years after the completion approval, causing difficulties in securing cost transparency and reliability. Especially in cases like urban high-tech industrial complexes where construction projects are included in the development process, regulations require that more than 50% of the sales revenue be used for installing public facilities within the industrial complex or reducing the sale price of industrial facility sites. However, there were difficulties in additionally installing public facilities or adjusting land development costs using profits generated after the industrial complex completion.

To address these issues, the city established a specific procedure for confirming development costs. According to the improved procedure, the confirmation of development costs follows these steps: ▲ selection of a professional institution (accounting firm) by the approving authority before completion approval → ▲ submission of supporting documents by the project implementer within 7 days after completion approval → ▲ verification by the professional institution → ▲ confirmation of development costs → ▲ proceeding with the price settlement process.

For industrial complexes that include construction projects, the city decided to pre-reflect the estimated sales revenue based on expected land costs, building usage, and scale derived from detailed design documents at the industrial complex plan approval stage, by lowering the sale price (development cost) or expanding public facility installation.

Through this, the city aims to encourage companies to move into industrial complexes at lower costs while sufficiently providing infrastructure to enhance the competitiveness of the complexes. The city plans to apply the improvement plan as an approval condition starting with industrial complexes whose approval applications are submitted after July this year.

Earlier in April, the city also proposed to the Ministry of Land, Infrastructure and Transport to improve the regulations of the "Integrated Guidelines on Industrial Site Development" in this direction.

A city official said, "By specifying the submission of supporting documents during the cost calculation process and transparent verification by professional institutions, we can secure the reliability of development costs and shorten the settlement period." He added, "As a result, disputes between project implementers and purchasers are expected to decrease." He also stated, "With many new industrial complexes expected due to the large-scale semiconductor belt development, we will continue to improve the system to supply high-quality industrial facility sites and urban high-tech industrial complexes to companies."

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