Samsung, Lotte may step back from Sejong City investment plan

By Kim Yoo-chul

Staff reporter

Korea's major conglomerates including Samsung and Lotte groups thinks of scaling down their earlier investment plans to Sejong City about 150 kilometers south of Seoul.

``Samsung Group will carefully monitor what happens relating to Sejong City. If situations deteriorate, we might seek other ways,'' said a group spokesman, Sunday.

Samsung originally planned to invest 2.05 trillion won from 2011 to 2015 in Sejong City to develop new businesses such as green energy, light emitting diode (LED) and healthcare.

With Samsung, other hopefuls to Sejong ― Lotte, Woongjin, Hanwha and SK groups ― are also poised to revise their earlier investment plans to the regional city, officials say.

``We've been in internal talks whether to overhaul our investment schemes to Sejong after the local election,'' a Lotte Group spokesman said.

Hanwha initially planned to spend 1.33 trillion won to create R&D and manufacturing facilities for its new solar energy and defense businesses over the tract of 600,000 square meters.

Woongjin also earlier announced its 900 billion won investment plan, while Lotte has been set to inject 100 billion to create 1,000 new jobs.

Such possible strategy shifts have emerged after the opposition party chalked up a victory in local and provincial elections, last week.

From the perspective of President Lee Myung-bak and the governing Grand National Party, the election is projected to hurt their drive of revising the grandiose original blueprint for Sejong City.

Ahn Hee-jung of the Democratic Party (DP), who was also one of the top lieutenants of the former President Roh Moo-hyun, was elected to head South Chungcheong Province, while Lee Si-jong of the DP will lead the governor of North Chungcheong Province.

The capital relocation plan to the Chungcheong provinces pushed by Roh had initially been welcomed by residents of the provinces as the project was aiming for balanced regional development.

But the situation has turned sour after the pro-business president Lee appears to be making every effort to completely dump the original plan ― to shift large chunks of the government from the capital to a science city with top-tier universities, R&D centers and big companies ― as he believes it is a waste of money to build another administrative city just to house bureaucrats.

The revised plan calls for a total investment of 16.5 trillion ($14.6 billion) won, with the government providing some 8.5 trillion won and the private sector 4.5 trillion won.

``It seems quite uncertain whether the Lee Myung-bak administration will push the revised Sejong City plan as scheduled despite the election results. But companies won't wait forever for the revised plan to be passed by lawmakers,'' an unnamed Samsung executive said.