Companies that acquired land in the Wonju Innovation City cluster have not started construction for over 10 years, and authorities have failed to take effective action. Two companies that halted construction received approximately 65 million won in interest support.
On September 28, the Board of Audit and Inspection announced the results of its regular audit of Wonju City, revealing eight instances of illegal or improper actions. This was the first regular audit of Wonju since 2015.
According to the audit findings, of the 13 plots of land sold in the Wonju Innovation City cluster before 2025, six have either not started construction or have been halted. Under relevant laws, land buyers must begin construction within one year of receiving occupancy approval. If construction does not commence without a valid reason, the city can revoke occupancy approval or order the transfer of the land.
However, the Gangwon Special Self-Governing Province accepted explanations from the companies indicating their intent to proceed, leading to a lack of effective measures. One hospital, which acquired land in June 2014, has not begun construction for over a decade, yet Gangwon Province reported to the Ministry of Land, Infrastructure and Transport that construction was 'scheduled to begin.' As of June 2025, the actual occupancy rate in the Wonju Innovation City cluster was 45.6%, below the national average of 57.1%.
There were also loopholes in the criteria for interest support. The Ministry of Land's guidelines require on-site verification of construction commencement, but they do not specify whether support should be cut off if construction is halted after starting. Gangwon Province provided a total of approximately 64.96 million won in interest support to the two companies that actually halted construction. The Board of Audit and Inspection has instructed Gangwon Province to develop management measures for non-constructing companies and has advised the Ministry of Land to establish criteria for interest support and cessation based on construction progress.
Wonju City's management of small and medium-sized enterprises was also found lacking. Four companies that received approval for factory establishment plans did not complete their factories within 4 to 13 years, and some had already gone out of business. Despite the occurrence of reasons for cancellation of approval, Wonju City did not take separate administrative action. One company, after receiving a 290 million won reduction in forest resource development fees, cleared 23,931 square meters of land and cut down 639 trees but failed to build a factory by the end of 2025, prompting complaints from nearby residents about soil runoff.
Conversely, seven small and medium-sized enterprises seeking to establish factories missed out on local tax benefits due to insufficient guidance from Wonju City. Four of these companies can recover 87.8 million won through tax adjustment claims, but the remaining three have lost the opportunity to reclaim 15.49 million won due to the expiration of the claim period.
Instances were also found where subsidies were improperly disbursed despite confirming misappropriation. In 2023, Wonju City granted 600 million won in subsidies to a martial arts organization. After confirming that 54.72 million won was improperly spent on announcer fees and rental charges for a venue already owned, the city still provided an additional 700 million won to the organization in August 2024, citing the approaching event.
The Board of Audit and Inspection has instructed Wonju City to check compliance with factory establishment plans and to provide guidance on local tax reduction systems. It has also urged caution regarding three individuals involved in the reallocation of subsidies.
* This article has been translated by AI.
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