Treasure hunt for Sejong money

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Treasure hunt for Sejong money

Now that President Lee Myung-bak’s vision of making Sejong City an industrial center is buried, other cities and provinces are pounding on the doors of corporations who intended to move to Sejong, asking them to invest in their economies instead.

According to the JoongAng Ilbo, nine out of 16 metropolitan councils have joined the corporate treasure hunt and provinces want the companies’ cash and jobs too.

The original Sejong City plan, put forward by the Roh Moo-hyun government, was to relocate the national government to the city in South Chungcheong. The Constitutional Court ruled against Roh’s plan, saying the country’s capital could not be moved, and the president scaled it back to move many, but not all, government offices. That plan was passed into law in 2005, and will now proceed.

Lee tried scaling back the plan further to make Sejong an industrial, science and education hub. Opposition parties as well as a faction in the Grand National Party fiercely opposed the revision, and succeeded in killing it.

But when Lee initially proposed his legislation, Samsung, Hanwha, Woongjin and Lotte announced they would invest 4.377 trillion won ($3.6 billion) in Sejong. On top of that, research institutes and corporate research and development teams intended to invest another 3.548 trillion won, according to the prime minister’s office.

South Chungcheong still harbors hopes that the money will still come to Sejong, despite the assembly’s killing of Lee’s entire revision plan.

“We will do our best not to disappoint the companies that chose to invest in the Sejong City,” said South Chungcheong Governor-elect An Hee-jung, who won his job in this month’s local election and led the campaign against Lee’s revision plan, on an MBC radio program last Thursday. “We will also provide benefits to businesses that will move to Sejong, including subsidies.”

But most of the companies that planned investments there have already said they see no reason to go through with them now. Which is why other governments are beelining to various corporate headquarters.

Gyeonggi recently hosted a briefing for Samsung, arguing that as both Samsung Electronics and Samsung SDI are based in Gyeonggi, investing near its affiliates will be smart for the company. According to an official at the Gyeonggi provincial government, the office will provide Samsung any amount of land it needs wherever it wants in the province.

The competition to attract Samsung’s investment is the fiercest, with eight out of nine provinces competing for the giant’s cash and jobs.

Song Young-gil, mayor-elect of Incheon, sent two special envoys to Samsung and Hanwha to persuade them to invest near the international airport and Songdo International Business District. Song promised a generous tax exemption and deregulation.

North Chungcheong also offered a tax cut to major companies. At Chungju business city, companies will receive 100 percent tax exemptions for the first three years and a 50 percent tax discount for the following two years. This is the tax benefit that was offered in Sejong.

North Jeolla is planning to provide land at a very cheap price for businesses. For example, Gimje will provide a total of 3 square kilometers (740 acres) of land for less than 30,303 won per square meter.

North Gyeongsang, Daegu and Ulsan have formed an alliance to compete for investments intended for the science belt. They will provide both tax reductions and an industrial site at a cheap price. They are also lobbying the Blue House to encourage Sejong investments to come to them instead.

By Chung Young-jin []
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