Incheon hit for extorting Songdo development fund

By Park Jae-hyuk

Incheon Metropolitan City has allegedly sold land in Songdo International Business District (IBD) to pay off its debt amid financial difficulties, the biggest resident group in Songdo said.

Hundreds of members of Songdo International City Citizens Coalition held a rally in front of Incheon City Hall, Wednesday, claiming the city government is annihilating Songdo.

Rep. Min Kyung-wook of the ruling Saenuri Party joined the rally, along with members of the city and district councils.

Residents claimed that several development works have been delayed or canceled, after Songdo development funds being transferred to the city government caused a budgetary deficit.

Designated as one of three districts of the Incheon Free Economic Zone (IFEZ), Songdo has been operated through the special funds on a self-paying basis.

Residents said the city government has weakened the competitiveness of Songdo, as it has invested development gains from Songdo into the old downtown, even though Songdo must cover business costs to build infrastructure with investors’ own money and no support from Incheon.

They see such a problem has been caused by Incheon illegally transferring assets from special IFEZ accounts to the general accounts of the city government.

As the budget of the IFEZ Authority decreased from 1 trillion won ($882 million) in 2009 to 420 billion won this year, infrastructure construction projects, such as the Water Front, 151 Incheon Tower and foreign hospitals, have been delayed, the Songdo residents said.

Lacking living spaces for investors has also prompted the city government to sell off the land, according to the residents.

They worry the city government will not be obligated to pay the outstanding liabilities, after the IFEZ Authority’s dissolution between 2020 and 2030. The development of the IFEZ is expected to be completed by then.

During the rally, the residents required Incheon to prohibit the transfer of Songdo development funds and required to separate Songdo District from the city.

An Incheon City Hall official said, “Some residents seem to hold a different view on selling of assets, but the assets have been transferred to the city government according to the related law.”

He said the city government and IFEZ are not separate bodies, but both are under the control of the Incheon city government.