Yeosu Expo Venue Incurs Huge Losses

SEOUL, KOREA - What to do with the venue for Expo 2012 Yeosu Korea, an international exposition held for three months between May 12 and August 12, 2012, has not been determined even after two years since the end of the event. While government agencies such as the Ministry of Oceans and Fisheries, the Ministry of Strategy & Finance, and the local governments are at odds with competing plans, the site is incurring 12.3 billion won in debt a year, with no interest payments on funds borrowed from the central government.

 

According to the Expo 2012 Yeosu Korea Foundation on May 13, the Ministry of Oceans and Fisheries is pushing forward with a plan to put the site up for a long-term rental contract instead of selling it outright to a private operator. A ministry official said, "We are reviewing an idea of bringing in outlet stores and other commercial amenities under rental arrangements."

 

But it is questionable whether the plan would be implemented as envisioned. For the past two years, the ministry has failed three times to sell or rent the space. To the plan suggested by the oceans ministry, the finance ministry responded that it will be impossible for the 384.6-billion-won debt the venue borrowed from the government coffer to be repaid with such long-term rental arrangements.

 

While government agencies bicker with each other over what to do, the expo site is incurring more than 10 billion won in deficit a year. The budget for the Expo 2012 Yeosu Korea Foundation is estimated at 15.8 billion won this year. Given its revenue last year was 2.2 billion won and this year's revenue estimated at 3.5 billion won, the foundation expects its deficit to be 12.3 billion won.

 

Economists criticized that the government wasted a huge amount of money by holding an international event without even thinking about cost and benefit. According to a report submitted by the oceans ministry before the 2012 Expo, the economic effect after the event would be 36.5 trillion won with job creation of 34,000, which in reality is far from the truth.