As the government aggressively seeks to attract businesses, schools and research institutes to Sejong City, discomfort is growing in other parts of the country where similar development plans have been underway.

What was initially designed to become an administrative town housing nine government ministries is now headed towards transforming into a self-sustaining economic hub or a city of science and education, a concept shared by many others.

A government team in charge of planning for the Sejong City development and a joint review panel of bureaucrats and nongovernmental experts have unveiled plans to offer generous incentives to entice both domestic and foreign institutions.

Such moves, however, are expected to clash with the development process of free economic zones, "corporate cities" and "innovative cities."

"We are concerned that the foreign universities and research institutes that we have been tapping for investment may turn to Sejong City as the government promises huge incentives there," said Yoo Byung-yoon, in charge of investment support at the Incheon FEZ Authority.

"If the government decides to offer land in Sejong City at low prices, we will request the government to provide similar financial assistance for us, too."

In the meantime, the Incheon FEZ Authority will continue efforts to persuade companies by making the most out of its advantage in terms of securing human resources as it is closer to Seoul and has an international airport, Yoo said.

Incheon has been the most successful free economic zone so far in luring businesses and universities. Korea has five more free economic zones; Busan-Jinhae, Gwangyang, Hwanghae, Daegu-North Gyeongsang and Saemangeum-Gunsan.

Despite the city's relative progress, Incheon city councilors are considering issuing a statement in protest of the Sejong City revision plan as it overlaps with the functions of free economic zones.

Sejong City's incentives such as tax breaks and deregulation are widely projected to be of a similar level with those of free economic zones.

"I think it would be possible to offer benefits (in Sejong City) that match those of free economic zones," Rep. Chung Eui-hwa, chief of the ruling Grand National Party's ad-hoc committee on Sejong City, said in a radio interview earlier this week.

Encouraged by government promises, several major companies and universities have already shown interest in moving to Sejong City or opening new campuses there.

"Five or six top-tier universities, except for Yonsei University, which is building a new campus in Songdo, Incheon, have made inquiries to the government on moving to Sejong City," an associate of the ruling party said.

"But Sejong City will be large enough to house only about three and the government is considering branches of Korea University, the Korea Advanced Institute of Science and Technology and Seoul National University."

Prime Minister Chung Un-chan said several major business enterprises were considering operating in the new city.

Experts say the concentration of central government support on Sejong City would inevitably have a negative impact on balanced development across the nation.

"Massive incentives in Sejong City would deal a blow to the investment environment in the greater Seoul area as well as the North Gyeongsang region and Saemangeum," said Shim Kyo-un, professor of real estate studies at Konkuk University.

The government has repeatedly mentioned the need to provide land at cheap prices in Sejong City, putting under pressure regions designated for development into corporate cities.

Of the six corporate towns, only three - Wonju in Gangwon Province, Taean in South Chungcheong Province and Chungju in North Chungcheong Province - have begun construction so far.

Muan, Haenam-Yeongam in South Jeolla Province and Muju in North Jeolla Province have been neglected for years after designation due to lack of interest from companies.

"It is rumored that Sejong City plots will be offered at around 350,000 won per 3.3 square meters, which would be about half the price in Wonju corporate town. If that turns out to be true, we would lose companies to Sejong City," said Roh Byung-il, in charge of the new town development in Wonju, where groundwork is underway to build a biomedical industrial complex.

"If the government decides to finance construction of infrastructure in Sejong, it should do so for corporate cities too."

In an attempt to put down the unrest, the government said only institutions moving out of the Seoul metropolitan area or from abroad and new types of industries that have not been discussed before will enter Sejong City, but not many are buying it.

President Lee Myung-bak, who had promised to implement the administrative city project during his 2007 presidential campaign, is to explain his position on the revision tomorrow evening in a televised session.

The administrative city plan was initiated under former President Roh Moo-hyun as part of efforts to balance development across the nation and reduce overcrowding in Seoul and the surrounding Gyeonggi Province.

The GNP initially opposed the proposal, but endorsed it at the National Assembly in 2005, ahead of crucial local elections the following year.

(sophie@heraldm.com)

By Kim So-hyun

2009.11.26