$35 Bil. New Deal Projects to Start Next Month
By Oh Young-jin
Staff Reporter
Korea will initiate $30-billion (45 trillion won) in public infrastructure projects next year in a move to revive the slumping economy.
At the same time, the government will remove restrictions aimed at stifling soaring property prices, except for three key anti-speculation measures ― the designation of speculative areas in upscale Gangnam districts in Seoul; the abolition of a ceiling on initial sale prices for new apartments; and the temporary exemption of taxes on housing transactions. Even these three measures will be reviewed for scrapping later.
In a report Monday on next year's business plan to President Lee Myung-bak, the Ministry of Land, Transport and Maritime Affairs unveiled Korean New Deal projects involving 10 public infrastructure projects.
Under the Korean New Deal plan, nearly $10 billion (about 13.9 trillion won) will be allocated to the development of four key rivers ― the Han, Nakdong, Geum and Yeongsan. Also getting a budgetary boost is a canal project between Seoul and Incheon. The development projects will be implemented as part of the government's environment-conscious ``green growth'' program.
About 1.5 million low-cost apartments will be built by 2018 and water resources will be developed for South Korea's second largest city, Busan. Also included in the infrastructure projects are the early start of the construction of railroad and highway networks as well as electronic maps and a database of underground structures.
``About 15 trillion won, or about 65 percent of the next year's infrastructure building projects, will be allocated on top of 30 trillion won from other sources for the first half of next year,'' the ministry said.
It expects the projects to create 650,000 jobs, which would generate 79 trillion won in output. For January alone, about 6.6 trillion won will be earmarked.
Despite the government's plan to have these infrastructure building projects executed with environmental consideration, the plan streamlines the existing two-tiered environmental impact evaluation process and curtails the exemption of a repeated eco-check for National Assembly-approved programs with a mandatory investigation into historic relics at construction sites.
The government said that the steps are aimed at ensuring the early start of the New Deal projects.
In the meantime, the government intends to temporarily shelve the waiting period of three to 10 years for those who have won a lottery for the purchase of a new apartment before they become eligible to participate in a second such lottery. The temporary lifting of the mandatory waiting period starts next March and will last three years.
A ban on the sale of new government-subsidized apartments will be eased from the current three to seven years to one to five years, meaning that some of new apartment owners will be able to sell them immediately after they move in.
However, the three key anti-speculative measures affecting Gangnam will remain in place but left open for change later, considering the divided public opinion about them, the ministry said.