Incheon City has allocated 6.7 billion won to a special purpose corporation without securing ownership of the land designated for donation. Additionally, Incheon’s Yeonsu District has been found to have reduced the budget for a cultural arts center construction project to avoid a feasibility study, leading to wasteful spending.
On October 13, the Audit Office released the results of its inspection titled 'Status of Major Local Construction Projects and Facility Safety Management.' The office identified a total of six illegal and improper practices in the construction projects of Incheon City and Yeonsu District, issuing warnings and notifications.
The audit revealed that Incheon City planned to receive donated land from a special purpose corporation established to fund the operation of the Art Center Incheon, a cultural and arts complex in Songdo International City. In return, the city agreed to provide funds necessary for the corporation's debt repayment.
However, Incheon City provided 6.7 billion won of the 25.3 billion won debt to the special purpose corporation in December of last year without securing waivers of rights or consent for ownership transfer from the real estate trust company and other primary beneficiaries. The city also planned to provide an additional 18.6 billion won.
The Audit Office pointed out that without the consent of the rights holders for contract termination or rights transfer, Incheon City lacks the means to acquire ownership of the land, raising concerns about potential financial losses. The office has instructed the city to secure consent and waivers from the rights holders before providing additional funding.
In Yeonsu District, the budget for the cultural arts center construction project was initially set at 47.2 billion won but was increased to 56.8 billion won. To avoid a feasibility study required for projects exceeding 50 billion won, the district excluded some essential stage equipment, reducing the budget to 49.8 billion won.
Despite starting construction without a feasibility study, the project costs eventually exceeded 50 billion won due to additional expenses such as waste disposal. Following the investigation that found a lack of feasibility, the district opted to build a sports center instead of the cultural facility and paid 1.8 billion won in damages to the original contractor. The construction of the alternative facility has also been delayed by more than 17 months.
Meanwhile, the Audit Office noted that Incheon City was found to have ordered a 28.2 billion won road construction project without securing the necessary land for road incorporation, indicating a potential liability for delay compensation depending on accountability.
* This article has been translated by AI.
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