Fraudulent “4 Rivers Project” Budget Plan

The Fraudulent “4 Major Rivers Restoration Project” Budget Plan

November 24, 2009
Korea Federation for Environmental Movements (KFEM) / Friends of the Earth Korea

Almost all working expanses for large-scale engineering projects in South Korea increase drastically in comparison to what is originally planned. The still on-going Saemangeum Reclamation Project, the largest tidal flat destruction project in the world, initially estimated a working budget of 1.3 trillion Korean Won, but the Korean Research Institute for Human Settlements, a think tank on land use policy for the government, announced lasted year that a total budget of 18.9 trillion Won, or more than 14.5 times than the original budget, will be required. The Incheon International Airport constructed on reclaimed tidal flats cost 7.5 trillion Won, 2.2 times more than the initially planned budget of 3.4 trillion Won, and the Gyeongbu High-speed Railroad cost 18.4 trillion Won, 3.17 times more than initially reported.

The “4 Major Rivers Restoration Project” project is no exception. The original project budget announced in the project draft of December 2008 had been about 13.88 trillion Won but the project budget in the final draft announced in June 2009 was 22.2 trillion Won (about USD 19.2 billion), totaling a spike of 1.5 times from the original budget.

But even this 22.2 trillion KRW doesn’t include additional costs of 2 trillion KRW including a 1.5 trillion KRW worth government funded interest cost for Korea Water Resources Corporation (K-Water) which will have to issue corporate bonds to cover costs for its involvement in the 4 Rivers Project and the costs for supplement facilities collecting river water for urban and industrial use. It is also expected that the estimates for compensation cost for farmlands included in the 4 Rivers Project zone will ultimately double or even triple from what was originally planned. Therefore the project cost could end up requiring 30 to 40 trillion Won rather than the promised 22 trillion Won.

In the 2010 budget bill, the government proposed in late October to the National Assembly, parliament of South Korea, 3.5 trillion Won (about USD 3 billion) for the 4 Major Rivers project budget for deliberation. But according to the “2010 Budget Bill Analysis” published on November 3rd by the National Assembly Budget Office, the actual budget for the 4 Rivers Project will end up as much as at 5.33 trillion Won (about USD 4.6 billion), roughly 2 trillion Won more than the government argues. Though the government of South Korea maintains that the budget for the project next year is 3.5 trillion Won proposed by the Ministry of Land, Transport and Maritime Affairs, it fails to include budgets from other ministries including budgets for river water quality improvement and ecological river restoration by the Ministry of Environment and raising existing irrigation dams by the Ministry for Food, Agriculture, Forestry and Fisheries.

The National Assembly Budget Office pointed out that it lacked legal basis to classify the ecological river formations and bicycle road constructions of the 4 Rivers Project as national river management projects and recommended that their budgets should be reduced or that the projects be reorganized as different projects.

On November 12th, the National Assembly of South Korea has begun standing committee evaluations of the government’s proposed budget bill for the year 2010 worth 291.8 trillion KRW. But according to budget plans for 2010 submitted by the Ministry of Land, Transport and Maritime Affairs the 4 Major River project requires a total governmental investment of 3.5 trillion Won of which no specific budget details have been outlined.

The Democratic Party, the leading opposition party in South Korea, stated that a single line’s description for the budgets of the 4 Rivers Project was not enough for them to review and refused to review budget bills for the Land, Transport and Maritime Affairs Committee and Special Committee on Budget and Accounts until more specific budget details concerning the 4 Rivers Project are submitted.

The government submitted a 15-page long “the 4 Major Rivers Restoration Project Budget Bill for 2010” containing project costs and compensations for each project section involved on November 12th. On November 18th, the Ministry of Land, Transport and Maritime Affairs submitted to the National Assembly a 71-page long “National River Management Project Reference Material” report.

But most of the details on the newly submitted reports remain the same in comparison to the original submissions with the exception of a few editing changes and information concerning involved sections. The specific details of involved sections list project summaries, construction and compensation costs for individual project sections as well as the names and locations of involved rivers and streams. Once again, only the total construction and compensation costs have been stated for individual sections without any references specifically clarifying where or how such budgets will be used in detail. The opposition parties including the Democratic Party are still refusing to review the budget.

There are comments even from members of the ruling Grand National Party criticizing such problems concerning the fraudulent and unreliable 4 Major Rivers budget plan.

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