hankyoreh

By Kwon Hyuk-chul, Staff Writer

South Korea appears likely to bear up to 9 trillion Won ($7.8 billion) of the costs for the relocation of U.S. Army Garrison-Yongsan to Pyongtaek, which it is scheduled for finalization with the United States and announcement in early 2011. This is an increase of more than one trillion Won from the 7.6 trillion Won South Korean burden estimated two years ago.

With the relocation scheduled for completion in late 2016, more than two years later than in the original plan, there has been a major increase in financial costs for South Korea. Some observers are calculating a potential shortfall of one to two trillion Won if it attempts to offset relocation costs with funds from the sale of the reverted site. Since National Assembly ratification of the relocation’s umbrella agreement (UA) in 2004, the Ministry of National Defense has yet to give a formal account of the specific relocation expenses.

During a meeting with reporters Thursday, Kim Ki-soo, U.S. Forces Korea (USFK) base relocation project team leader for the Ministry of National Defense, said that the relocation was “scheduled for completion by late 2016,” around two years later than initially planned. Kim went on to say that the “total expenses to be born by South Korea are delineated as the construction costs and necessary project support costs calculated according to discussions between South Korea and the United States.”

“The project support costs are around 3.9 trillion Won, and the construction costs are to be nailed down early next year,” he said. “We cannot reveal the total costs South Korea will bear for the Yongsan Garrison relocation in detail, since they are currently being negotiated by South Korea and the United States, but we believe the relocation costs will be offset by the sale of land from the reverted base.”

With the two-year delay in the relocation, the South Korean share has increased further due to rising financial costs such as the rate of increase in prices and interest payments. A senior official with the USFK relocation project team said that with the delay of slightly over two years in the relocation, the amount of project support costs has risen by about 600 billion Won to 3.9 trillion Won from 3.3 trillion Won in 2008, and that interest on project support costs has also risen by about 490 billion Won.

In a July report to the office of a National Assembly member, the defense ministry said that South Korea would be bearing 7.6 trillion Won of the 14.4 trillion Won total costs of the Yongsan Garrison relocation. This amount was calculated in 2008 by the relocation's Program Management Consortium (PMC) on the assumption that the garrison would be relocated by 2014. In view of this, analysts calculate that the relocation costs to be borne by South Korea will be around 8.85 to 9 trillion Won, including both construction and project support costs.

Based on the agreement between South Korea and the United States that “the party that requested the relocation bears the costs,” South Korea is responsible for the relocation of Yongsan Garrison to Pyeongtaek, while the United States is responsible for the relocation of the Uijeongbu and Dongducheon bases to Pyeongtaek.

As a rule, the South Korean costs are to be offset with money from the sale of land from the reverted base. However, an official with the USFK garrison project team estimated that there could be a shortfall of one to two trillion Won if the 44 local governments connected with the relocation project do not relent in their calls to turn the land into parks and the price of land from the bases does not increase in the future.

“An increase in total project costs for the Yongsan Garrison relocation has been anticipated for some time due to the project environment and construction delays,” said Kim Ki-soo. “But the portions that South Korea and the U.S. will each be responsible for are clearly delineated, so there will be no incurring of additional expenses for South Korea based on U.S. demands.”

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