15 city officials face disciplinary action
The Floating Islands on the Han River in Banpo-dong, southern Seoul. The island project turned out to have been carried out following inappropriate procedures.
/ Korea Times photo by Hong In-ki
By Yun Suh-young
Seoul City’s special audit team announced Thursday that the previous municipal administration bypassed proper procedure to recklessly press ahead with a controversial Floating Island project.
The team said that the construction project for the island on the Han River turned out to be riddled with "grave errors" and that it had decided to take disciplinary action against 15 officials in charge of the project. The action will include layoffs, salary reductions and reprimands.
The special inspection on the project over the past five years uncovered that the contract between the city government and the business operator Flossom was invalid because it was arbitrarily signed without approval from the City Council.
The proper procedure that should be followed when the city plans to acquire or sell off assets is to gain approval from the council.
The municipal authorities must submit reports on the project’s validity and obtain the council’s approval but apparently the city skipped such a step.
Also, despite the fact that the city government could not change the total investment spent on the project, officials in charge of the project arbitrarily did so twice, increasing the amount from 66.2 billion won to 139 billion won.
They also extended the period that the private firm could use the facilities for free from 20 years to 30 years. Only after 30 years will the city be able to collect the money it spent on the project.
The private firm, on its part, turned out to have exaggerated the cost of building the facilities in order to overcharge the city, inspection results showed. The private operator falsely claimed that the actual dredging operation cost of 100 million won per year was inflated to 1 billion won in a bid to make illicit gains.
The unfair deal also calls for the city to pay 106.1 billion won if the contract is annulled due to a mistake by the business operator or if the latter goes bankrupt.
"The project is full of discrepancies from beginning to end. The project will be recorded as the most problematic private investment project in Seoul’s history," said Kim Sang-beom, deputy mayor of the city government. "We will correct the inappropriate parts of the contract.”
He added that issues arose because the project was implemented rashly.
“The atmosphere among employees was that the project must be completed quickly and this must have created such procedural errors,” he said.
As part of the Han River Renaissance Master Plan initiated by former Seoul Mayor Oh Se-hoon, the plan for the Floating Island was set out in 2006 and the building work started in 2009.
The construction was completed in September last year but the facilities are still waiting to be occupied. The island features diverse facilities including a marina, a floating stage and exhibition halls.
Critics say that the Floating Island has become a white elephant.
The inspection was initiated by Mayor Park Won-soon when he found out that the free usage period of the facilities had been arbitrarily extended by city officials.