LH Snowballing Debt Up To 125 Trillion Won

A ceremony picture for establishing and kicking off a new 'LH' corporation after merging Korea Land Corp. and Korea Housing Corp. following a new law. Oct., 2009.

As state-run Korea Land and Housing Corp. (LH) is increasing its total debt up to 125 trillion won ($113.6 billion) rather than decreasing as planned before, the concerns over every citizen’ soaring financial burden is also being raised significantly.

According to The Chosun Ilbo newspaper in South Korea on Monday, many land projects the LH has been overseeing or handling are discontinued or fizzling out for a long time, increasing LH’s debts by 16.5 trillion won to total 125 trillion won including financial debts, installments money for lots or houses sale and rental houses.

The Ilbo quoted unnamed officials from Ministry of Land, Transport and Maritime Affairs and LH itself, saying that at least 60 development projects are discontinued since LH’s pursued “Project Restructuring”, which has started since October, 2009, is making slow or little progress.

The LH, so far, has been doing about 138 restructuring projects, but only 6 of them are finished by now, which includes Buan/ Byunsan-North Jeolla Province, Sengnam/Daejang district- Gyeonggi Province, etc.

As many projects the LH has been doing are stopped for various reasons and, even worse, the prospects of those are now unclear, increased total debt of 120 trillion won of LH is also adding the burdens of average Korean citizens.

A LH official said to the Ilbo that total debt of LH as of the end of last year is calculated into about 125.7 trillion won, which means that every average citizen has 2.6 million won ($2,363) and daily interests the LH has to pay are more than 10 billion won ($9 million). He added “The later project restructuring, the higher the total debt of LH and, at the same time, every citizen.”

(아주경제 송지영 기자)

AJP