June 09, 2008 07:36
Korea will have to pay more than W8.9 trillion to relocate U.S. bases, including those in Yongsan, Seoul, to Pyeongtaek, Gyeonggi Province (US$1=W1,024).
The costs Korea was supposed to bear were originally estimated at W5.59 trillion. But that is likely to swell by W3.3 trillion, including W1 trillion in direct costs and W2.3 trillion in indirect costs.
According to sources, the construction of the Pyeongtaek base will very likely be delayed by three to four years from December 2012 to 2015-2016. This has caused conflict between Korea and the U.S., which is insisting on completion by 2012.
According to a report by the Ministry of Defense based on a comprehensive audit of the office responsible for the U.S. base relocation project, Korea's share of the relocation costs will likely swell to W8.95 trillion -- adding special subsidies for Pyeongtaek, costs for environmental restoration for old U.S. bases, and additional construction costs -- from an original estimation of W5.59 trillion.
Korea's share was estimated at W5.59 trillion in March last year, but increased to W7.95 trillion in the summer. It rose as additional costs -- such as W1 trillion for special subsidies for Pyeongtaek, costs for environmental restoration for old U.S. bases, and costs for infrastructure -- were added.
That brought them to the new figure, according to the Program Management Consortium's report on the estimated construction costs and completion of the construction released early this year, which forecast an increase of an additional W1 trillion in construction costs.
The Defense Ministry had planned to raise the W1 trillion through its general accounts and W4.7 trillion from the sale of U.S. bases. But according to the audit, the estimated amount totaled W6.3 trillion is still short of W2.6 trillion from what is actually needed, even if these two amounts are added by W611 billion the ministry has already earmarked.
The ministry's report said it is necessary "to work out a special measure to push for a smooth implementation of the project, as it is currently estimated that we will be short of W2.6 trillion."
The American share for the relocation costs is estimated at W4.4 trillion. That will likely shrink as part of its share is expected to be raised from its share of the upkeep costs of the U.S. Forces Korea.
A senior Defense Ministry official said, "The exact construction costs and period will be announced after consultations with the U.S. based on the outcome of the PMC's review after August."
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