By Jung Sung-ki

Defense authorities here denied a report Monday that the Korean government will foot most of the $10 billion bill for relocating U.S. army bases and facilities to south of the Han River.

Yonhap news agency reported Sunday that the United States would “divert” South Korean-contributed defense funds to the relocation project, so South Korean taxpayers are to virtually bear most of the bill.

An official at the Ministry of National Defense said that assessment was wrong.

“Under a bilateral agreement, U.S. Forces Korea is authorized to use funds from South Korea to construct or modernize its base facilities,” the official said on condition of anonymity. “So there’s no problem with that move though the Korean public could misunderstand that South Korea would pay for all costs related to the base relocation.”

Under the Land Partnership Plan (LPP) reached in 2002, the United States promised to pay for moving the bases of the 2nd Infantry Division, north of Seoul, to Pyeongtaek, Gyeonggi Province, where a consolidated U.S. military base will be built.

On the other hand, Seoul agreed to bear the cost for relocating the Yongsan Garrison in Seoul under the Yongsan Relocation Plan (YRP) finalized in 2004.

The base relocation, which had been scheduled for 2008, has been postponed. Officials say the relocation is expected to be completed as early as 2015.

The official also denied the allegation that the United States has recently asked South Korea for a guarantee that it will provide 1.7 trillion won in cash to cover the cost for designing a new base in Pyeongtaek, Gyeonggi Province, and other expenses.

“The United States has never made such a demand,” he said.

USFK’s use of host-nation funds has long been a controversy.

South Korea has been paying hundreds of millions of dollars per year since 1991 as part of shared “security costs” to help maintain the U.S. military presence.

Seoul and Washington hold biennial talks, called the Special Measures Agreement (SMA) meetings to discuss how to share joint defense costs in an appropriate manner.

The Seoul government contributed 741.5 billion won to the United States in 2007, up 45.1 billion from the previous year. It agreed to increase its level in 2008 in accordance with a rise in the consumer price index.

The USFK claims the figure represents about 41 percent of non-personnel stationing costs covering the salaries of Korean employees at U.S. facilities, Korean contractors and service agents, as well as military construction, logistics procurement, maintenance and munitions storage.

Against that backdrop, the United States has called on South Korea to pay more to reach a 50-50 level in tune with the country’s growing economy and increased responsibility for national defense.

Seoul officials, however, do not agree with USFK's claim on Seoul's proportion of sharing the burden.

“The figure (41 percent) is the USFK’S assessment,'' an official of the Ministry of Foreign Affairs and Trade said. ``We can't calculate the proportion exactly because the USFK refuses to reveal the total costs for stationing its troops here.'”

The official said the difference over the proportion of host-nation funds between the two governments resulted from different ways of assessing the values of host-nation support programs.

He said, for instance, South Korea provides more than 2,000 reinforcement troops called KATUSAs (Korean Augmentation Troops to the U.S. Army) to the USFK for free as part of the host-nation support programs. The value of the KATUSA program would be at least $50 million a year on the assumption that a KATUSA soldier is paid some $1,500 per month, but the USFK seems to downplay the value, he said.

Besides the troop support, South Korea provides land for bases and firing ranges for free, unlike Japan and other nations where U.S. troops are stationed. U.S. forces in Korea are also exempted from taxation and benefit from reduced electricity and telephone charges.