Seoul gov’t may have signed backdoor urban renewal deal

The Seoul city government is suspected to have signed a 15 billion won ($13.2 million) contract with a company led by insiders to spearhead urban restoration projects, the JoongAng Ilbo reported on Thursday, raising the question of whether the corporation and city government had already made a deal behind the scenes prior to selecting a partner.

The Seoul Metropolitan Government selected an urban restoration company, City and Life, on March 17 over another company that applied to become a partner to take charge of the city government’s Urban Restoration Support Center. The center develops strategies to restore and develop areas in Seoul and supports the activities of relevant grassroots communities.

The JoongAng Ilbo confirmed that two directors of City and Life, surnamed Kim and Park, were once advisors on the Seoul city government’s public-private committee on urban restoration, established in December 2015 by the city government to receive advice and suggestions from experts on urban restoration projects.

Kim and Park at the time had not created City and Life, which was later established in December 2016 with a starting capital of some 20 million won.

The committee had been aware that Kim was going to create such an urban restoration company.

“Around June, Kim will be creating a new company to be affiliated with the Seoul city government’s Urban Restoration Headquarters,” reads a meeting report of Feb. 26, 2016, of the committee, exclusively obtained by the JoongAng Ilbo. “Kim is reviewing the costs and other logistics to creating the company.”

Eyebrows were raised at the administration audit and inspection of the Seoul Metropolitan Council last November, too, as the council questioned the city government on whether it had already had a nominee in mind to manage the Urban Restoration Support Center.

The council also questioned the fact that another director of City and Life, a man surnamed Lee, was a policy advisor to Mayor Park Won-soon’s election campaign in 2011. Lee stepped down as director in Jan. 17 over the controversy.

Kim denied the existence of any behind-the-scene deal with the city government over the contract.

“This [urban restoration] project is not particularly a profitable project and the company applied to become a partner not for any corporate gains but to support society in general,” Kim said. “The suspicion over a behind-the-scene nomination is nonsense.”

City and Life was also uncovered to have submitted a false report to the city government to win the contract. In the application papers, the company said it had successfully carried out an urban restoration project worth some 17 million won in the past three years. The JoongAng Ilbo uncovered that the project had not been carried out.

“We were not aware that it was a false report when we announced City and Life as our partner to take charge of the Urban Restoration Support Center,” the city government said in a statement on Thursday.

City and Life actually scrapped its bid to be partner of the city government to lead urban restoration projects on April 13, when the paper began to investigate the corruption allegations.

“The allegations over a behind-the-scenes nomination of the urban restoration partner are false accusations,” an official of the Seoul Metropolitan Government told the JoongAng Ilbo. “The partner to run the Urban Restoration Support Center will be granted the 15 billion won budget for the next three years, but there is zero profit for the partner. The partner is more like a volunteer in this concept.”

“Former advisors to the city government’s committee on urban restoration have the upper hand compared to other competitors for the bid to win the management of the city government’s urban restoration center,” said Lee Sook-ja, a member of the Seoul Metropolitan Council. “Of course they know so much more internal information. They need to be barred from entering such public bids.”

BY SEO JUN-SUK [chung.juhee@joongang.co.kr]