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Title Creating a Korean version of Marina Bay

February 19, 2014



MOLIT reported it will reduce the public debt of public corporations by a further KRW 24 trillion.


(Sejong=Yonhap news) by Chung Seong-ho = The creation of the “Least Location-Regulated District,” which the Ministry of Land, Infrastructure, and Transport (MOLIT) reported to president Park Geun-hye on January 19, is an effective way to revive a city, emulating Marina Bay of Singapore and the urban renovation districts in Japan.



◇ Korean version of Marina Bay


Currently, since land is assigned for specific uses, such as residential, commercial, or industrial, specific location regulations (types of facilities permitted) and density regulations (ratio of floor area to site area, ratio of buildings to land area, etc.) are applied to the land. The new Least Location-Regulated District aims to relieve or remove such regulations.


Easing restrictions on the number of floors in a building, the ratio of floor area to site area, and standards of infrastructure construction would allow the construction of a multi-purpose district that more closely integrates residential, commercial, and cultural functions than is currently permitted.


Relaxing regulations on the use and density of key urban functions, such as terminals and railway stations, would also facilitate the more integrated use of land and transform a dilapidated urban residential area into a commercial and cultural district. Tourism, cultural, and commercial functions may be added to old residential districts, keeping their historical and cultural properties intact.


An official from MOLIT said, "Some foreign countries have already introduced ‘white zones’ or non-regulated areas’ in order to relax zoning restrictions. Marina Bay in Singapore and Roppongi Hills and Otemachi in Tokyo are successful examples of integrated development by attracting private capital to reinvigorate community development."


As the inland districts of Singapore Port began showing signs of aging, the government launched a large-scale waterfront development project to create an integrated complex of residences, international businesses, and tourist attractions by expanding the existing central business district.


The first phase of the project was Marina Bay Sands, an integrated resort featuring hotels, parks, a convention center, and shopping mall. The resort, and its unique exterior, was built by SsangYong Construction and is well known in Korea. Singapore, in the second phase of its development project, plans on building a large international banking business complex and residential area.


The government expects the new concept to invigorate the sluggish property market.


Park Gi-poong, vice minister of MOLIT, said, "With the easing of land-use and density regulations, a very creative structure can be developed, and a hotel may be built in a hospital or a stadium."


Park added, "In that case, without making an effort to attract investors, there will naturally be a boom of private investment."


In order to ensure the early success of the new system, the ministry will select areas to be designated Least Location-Regulated Districts after receiving and deliberating on applications from local governments.


The ministry has selected candidate districts which need to introduce new functions to create synergy with the existing land-use, part of which will be maintained.


The new measure can be implemented in conjunction with other urban revival projects already in progress.


The ministry will revise related laws this year and designate pilot districts in 2015. Depending on the progress of the pilot projects, the government plans to further expand this list of eligible districts and operators.

 


◇ Achieving regulation control by assigning a grade to each regulation


MOLIT decided to introduce the “Regulation Gross Points System” in an effort to reduce regulations that discourage corporate investment and inconvenience the public.


The goal of this system is to control quality, not quantity. Through the Regulation Evaluation Committee, consisting of businesses, citizens, and specialists, the ministry will assign grades to all of its 2,400 regulations (16% of the government’s total) according to their level of corporate and social burden and calculate the total points by adding them up.


Starting from the latter half of the year, MOLIT will phase out 30% of the regulations by 2017.


Vice Minister Park Gi-poong said, "MOLIT has the most regulations of all government ministries," and that, "we aim at deregulation that can benefit the public by focusing on the level of burden the regulations place on them, instead of the number of regulations themselves."


In addition, beginning this year, the ministry will start implementing a renovation project tailored to meet the needs of 11 deteriorating downtown districts, expanding to a total of 81 districts by 2017.

 


This year, the government will build 60 mini-parks near residential areas adjacent to small lots or forests within the green belt or development-restricted areas and will repair lots of abandoned railroad tracks (equivalent to 2,200 football fields by 2017) and neglected urban streams so that they may be used as recreational areas for residents.


In addition, in order to attract private capital for the park project, the government will ease the land donation ratio and streamline the necessary procedures, thereby expanding the per capita city park space to 11.2 m2 by 2017, 25% more than in 2012.

 


◇ Debt of public corporations down by KRW 24 trillion


The debt of public corporations under the Ministry of Land, Infrastructure, and Transport accounts for 43% of the total debt of all public corporations (KRW 493 trillion). Through vigorous self-relief measures, such as asset sales, that debt is expected to shrink to KRW 234 trillion by 2017, down KRW 24 trillion from the originally planned KRW 258 trillion, under the long-term fiscal management plan.


The Korea Land and Housing Corporation (LH), which holds the most debt of all public corporations under MOLIT, decided to reduce its debt through business restructuring and an asset sale from 2016.


The debt of LH stood at KRW 142 trillion, which accounts for 64% of the debt of all public corporations under MOLIT.


The construction industry, under pressure from the sluggish real estate market, will seek growth momentum in overseas markets. This year, with an overseas construction order target of USD 70 billion, the government will expand financial support to help small and medium sized construction companies accelerate their exploration of overseas markets.



sisyphe@yna.co.kr

 

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