408 billion won compensation bomb… Citizens of Namwon outraged

The conflict surrounding the Namwon Chunhyang Theme Park monorail project has resulted in an astronomical compensation amounting to 408 billion won for the city of Namwon.

The project, which was suspended by Namwon Mayor Choi Kyung-sik shortly after taking office, is now facing a grave financial crisis for the city due to a court ruling. Consequently, the citizens' anger is boiling over.

On the 27th, News1 reported that there was a surge of loud protests from citizens during the 'Open Communication Citizen Report Meeting with Namwon City,' held at the Chunhyang Culture and Arts Center in Namwon.

According to the report, during the nearly two-hour meeting, Mayor Choi focused on pointing out the problems with the projects pursued under the previous mayor, Lee Hwan-joo. There was no apology directed to the citizens or specific mention of solutions regarding responsibility or compensation.

How did the monorail project begin?

The 'Chunhyang Theme Park Monorail Project' of Namwon City began in June 2020 when the city signed a business agreement with the private company Namwon Theme Park.

This project involved the installation of a 2.4 km long monorail and zip lines at Chunhyang Theme Park, where Namwon Theme Park would construct the facilities and donate them to the city while holding operational rights for 20 years.

Based on the agreement, Chunhyang Theme Park borrowed 40.5 billion won from financial investors to complete the facility by June 2022. However, the situation changed dramatically in July of that year when Mayor Choi Kyung-sik took office.

Mayor Choi stated that "the business’s viability is unclear," and he did not grant the usage and profit approval specified in the contract. As a result, the monorail began temporary operations in August 2022 without even holding an opening ceremony.

Court rulings and massive compensation

Ultimately, the financial consortium that lent money to Namwon Theme Park filed a lawsuit for 40.8 billion won in damages against the city of Namwon in December 2023.

Both the first and second trials sided with the consortium, and on the 14th, the Jeonju branch of the Gwangju High Court ruled that "Namwon City must compensate the consortium 40.8 billion won."

The court stated, “Namwon City delayed the opening without justifiable reasons by not timely granting usage and profit approvals,” adding, “contrary to Namwon City’s claims, there was no evidence of inflated project costs.” The court also remarked that “if it had opened without disputes, a substantial portion of the loan could have been recovered.”

Among the total budget of 996.8 billion won for this year in Namwon City, 408 billion won is by no means a small amount. Including the delayed interest, the compensation amount is estimated to reach 48 billion won.

Citizens' anger and responsibility controversy

At the citizen report meeting, there were outbursts such as, "Can you dig to find 400 billion won? The mayor should pay with his own money!" and "The mayor who wasted taxpayers' money should repent before the citizens!"

Some citizens strongly criticized Mayor Choi for breaking the consistency of administration and causing them to face a "debt bomb."

Mayor Choi explained, “The business agreement was drafted unfairly against Namwon City, and the Jeollabuk-do Administrative Appeals Commission declared it invalid due to violations of the public property law,” stating that “I had no choice but to suspend the project at that time.”

He emphasized the need to resolve suspicions regarding the execution of the agreement and confirmed the existence of multiple illegalities related to violations of the executive agreement, which made it impossible to take over the monorail project.

Abandoned monorail and uncertain future

Currently, the monorail has been left idle for 1 year and 6 months since it stopped operating in February of last year. Additionally, 19 employees of Namwon Theme Park have been recommended for resignation, and the theme park is reported to be temporarily closed.

Mayor Choi stated, “I will decide whether to appeal to the Supreme Court after gathering citizens' opinions,” and added, “I plan to secure the 400 billion won by saving the budget without issuing separate local bonds.” However, he also mentioned that if an appeal is made, about 4.5 billion won in overdue interest would accrue monthly.

Namwon City is scheduled to decide on whether to appeal by September 5, but there remain significant challenges to address, such as how to secure the compensation exceeding 400 billion won and what to do with the abandoned monorail. The citizens' anger is unlikely to subside easily.

Image Source: On the 27th, during the 'Open Communication Citizen Report Meeting with Citizens' held at the Chunhyang Culture and Arts Center in Namwon, Mayor Choi Kyung-sik is seen answering questions related to the monorail trial / News1 (Namwon City), Namwon Chunhyang Theme Park / Photo: Namwon City, Mayor Choi Kyung-sik / News1