F1 choice catches South Jeolla off guard

The Formula One 2010 Korean Grand Prix at the Yeongam circuit in South Jeolla. [JoongAng Ilbo]

The Formula One governing body announced on Wednesday the return of the Korean Grand Prix in the Formula One calendar for 2015, an event that saw a one-year absence at the Yeongam circuit in South Jeolla.

The news caught South Jeolla government officials off guard, who expected to be spared from hosting responsibilities for the unfruitful event next year.

FIA’s World Motor Sport Council announced that Korea will host the Grand Prix on May 3, though its status is “to be confirmed.”

The decision for the venue came as a shock to the South Jeolla Provincial Government, which is still reeling from huge losses incurred from hosting four F1 games between 2010 and 2013, due in part to disappointing turnout.

The southwest city of Yeongam is about a four-hour drive from Seoul.

The local government suffered 190 billion won ($170 million) in accumulated operating losses over a three year period from 2010 after spending about 1 trillion won to construct the race circuit in what was once a desolate area.

Former South Jeolla Governor Park Joon-yung gave up on hosting the 2014 Grand Prix after negotiations to reduce the cost of winning a hosting bid with the F1 organizer from $27 million to $20 million broke down.

The former governor’s decision to cancel the 2014 Grand Prix was taken to be his acknowledgement that his much-touted project had failed, with a tremendous amount of taxpayer money wasted.

It was widely expected that South Jeolla would be excluded from holding the event next year, given the unfavorable sentiment about it in Korea and abroad.

Bernie Ecclestone, the chief executive of the Formula One Group, said in an interview with the Independent in May that South Korean organizers “did a good job with the track but what they forgot to do was build all the things they wanted to build,” in reference to the lack of facilities around the circuit to draw in visitors.

News that Azerbaijan would host the F1 Grand Prix next year appeared to signify that it would directly replace Korea.

Making matters worse, the South Jeolla Provincial Government neglected to earmark funds to host the F1 race, which will require at least 70 billion won.

Due to the lack of time available, it is too late to find sponsorships to sell tickets, and the number of Korean F1 committee staff members is now down to nine.

But given that the status of the race is now “to be confirmed,” it remains to be seen whether Formula One Management (FOM), which has the final say on the F1 event calendar, will push ahead with Yeongam.

If it does and South Jeolla refuses to pay the hosting fee in an effort to avoid taking responsibility for the race, the FOM could potentially sue the debt-stricken local government and demand as much as 100 billion won in compensation.

“We have not received an official notification of its decision from FOM yet. But we will make our case clear that hosting the event will be very challenging given the fiscal strains facing the South Jeolla government,” a Korean F1 committee official told the JoongAng Ilbo on Thursday.

BY KANG JIN-KYU jkkang2@joongang.co.kr