The total project cost for the Honam Semiconductor National Industrial Complex, to be developed on the former site of the Gwangju military airport, is estimated at approximately 9 trillion won, with a construction cost of 514 million won per pyeong. Concerns have been raised that the financial burden on companies purchasing land may increase due to the inclusion of development costs previously borne by the Gwangju city government in the national industrial complex's construction cost.
On October 12, Rep. Kang Dae-sik of the People Power Party analyzed data from the Ministry of National Defense and the Korea Land and Housing Corporation (LH), estimating the total project cost for the Honam Semiconductor National Industrial Complex, which will cover about 2.5 million pyeong, at around 9 trillion won. This figure combines the acquisition cost of the former site, estimated at about 5 trillion won, and development costs of approximately 4 trillion won.
LH is considering utilizing about 70% of the total area, or 1.75 million pyeong, for paid supply. This includes an estimated 1.575 million pyeong for industrial land and 175,000 pyeong for commercial land. Dividing the total project cost by the paid supply area results in a construction cost of about 514 million won per pyeong. This is 2.1 times the average sale price of industrial land in the Gwangju Research and Development Special Zone's Advanced 3 District, which was 241 million won in 2024, and 6.7 times the price of 77 million won for the Bitgreen National Industrial Complex supplied in 2020.
Rep. Kang's office identified the high construction cost as primarily due to the acquisition cost of the former site and development expenses. While the value of the former military airport site is estimated at about 4 trillion won if assessed in its pre-development state, the current acquisition cost being considered by LH is around 5 trillion won. Additionally, the development costs previously borne by the Gwangju city government, estimated at about 4 trillion won, may also be reflected in the national industrial complex's construction cost.
The government and LH are reportedly exploring options to lower the sale price of industrial land to between 300 million and 400 million won per pyeong. However, if the sale price is reduced to 400 million won based on the estimated industrial land area of 1.575 million pyeong, a difference of about 1.7955 trillion won would arise; if lowered to 300 million won, the difference would be approximately 3.3705 trillion won. It remains to be seen whether this will be supported by the national or local governments or absorbed by LH.
Concerns have also been raised regarding the valuation of the former military airport site. The Ministry of National Defense estimated the value of the assets involved in the military airport relocation project at about 8.67 trillion won last year, which presents a discrepancy of 3.67 trillion won compared to the current acquisition cost being considered by LH. Rep. Kang's office has called for transparency regarding the basis for the valuation changes due to the restructuring of the project and the potential for national financial input.
Rep. Kang stated, "We must thoroughly examine whether the total cost of about 5 trillion won, which includes the development costs previously borne by the Gwangju city government and the acquisition cost difference, is being passed on to companies in the construction cost of the national industrial complex. The government should transparently disclose the burden on companies and citizens resulting from the transition to the national industrial complex."
* This article has been translated by AI.
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