The government has confirmed that it will significantly cut the budget for the construction of the Busan Gadeokdo New Airport, which was allocated 1 trillion won this year. There are discussions within the government about the possibility of reducing it by more than half. While announcing a supplementary budget of over 20 trillion won, instead of injecting funds into new projects, it plans to reduce part of the budget for existing projects that cannot be used as scheduled. The Gadeokdo New Airport project has faced significant delays since Hyundai E&C, the preferred bidder, decided not to participate, making it difficult to fully utilize the allocated budget.
According to the finance authorities on the 16th, the Ministry of Economy and Finance is expected to announce a supplementary budget plan amounting to 20 trillion won soon. This is a re-supplementary budget one month after the first supplementary budget of 13.8 trillion won for this year was confirmed by the National Assembly. The ministry plans to carry out expenditure restructuring by removing budgets from lower-priority projects, given the financial burden.
One of them is the Gadeokdo New Airport construction. The budget allocated for the construction of the Gadeokdo New Airport this year is 964 billion won, which includes the construction of the new airport and surrounding road and rail projects. The Ministry of Economy and Finance reports that the commencement of the Gadeokdo New Airport within the year is unlikely. An official from the ministry noted, "The Ministry of Land, Infrastructure and Transport must inevitably proceed with the suspension of construction." He added, "This year, it is difficult to execute the related budget, and we are considering reductions through the supplementary budget."
The difficulty in starting construction arises because Hyundai E&C, the preferred bidder for the Gadeokdo New Airport construction project, declared that it would not participate. The Ministry of Land, Infrastructure and Transport and Hyundai E&C have been at odds over the construction period. The ministry proposed a construction duration of 84 months, but Hyundai E&C suggested a longer duration of 108 months. There were also sharp differences of opinion regarding the airport's opening date. The ministry suggested opening before the completion in 2029, while Hyundai E&C proposed the completion date of 2035.
Afterward, Hyundai E&C declared that it would completely withdraw from the project, disrupting the timeline for the construction of the Gadeokdo New Airport. They stated, "Despite efforts to ensure safety and quality, securing the construction schedule to guarantee safety has become impossible."
They stated that even if the construction period is extended as they requested, they will not participate in the re-bidding. Hyundai E&C said, "We cannot accept the unjust stigma that delays a national project and encourages additional tax money due to private interests." The Ministry of Land, Infrastructure and Transport decided to stop the contract with the Hyundai E&C consortium and proceed with re-bidding.
As a result, the likelihood that a significant portion of this year's budget of 964 billion won for the Gadeokdo New Airport will remain unutilized has increased. Projects with a high rate of unutilized budget typically become targets for expenditure restructuring by the Ministry of Economy and Finance.
The budget for the Gadeokdo New Airport is largely divided into two sectors: airport construction and the road and rail sector that will connect to the airport. The airport construction sector accounts for about 90% at 864.9 billion won. Already, it has been determined that 520 billion won will remain unutilized or be carried over. An official from the Ministry of Land, Infrastructure and Transport stated, "If we cannot commence construction now, the land preparation construction costs will likely remain unutilized."
The budget allocated for road and rail projects related to the Gadeokdo New Airport is expected to be executed as planned. Although the construction of the Gadeokdo New Airport has been delayed, the plan has not been completely scrapped, as there is still a need for access roads and rail construction. The road and rail construction is expected to take a minimum of 10 years, from the preliminary feasibility study to completion.
The Gadeokdo New Airport has experienced fluctuations in its progress each time the administration changes. The project began with former President Roh Moo-hyun's pledge to promote a new airport in the southern region in 2002. The Lee Myung-bak administration halted it, and the Park Geun-hye administration shifted the focus to the expansion of Gimhae Airport. During the Moon Jae-in administration, a special law for the construction of the Gadeokdo New Airport was passed, making it a national project, and the Yoon Suk-yeol administration announced plans for early opening in consideration of hosting the 2030 Expo.
President Lee Jae-myung noted last month during a campaign that the Gadeokdo New Airport project would proceed quickly. He stated on Facebook, "The responsibility for advancing the Gadeokdo New Airport project has now fully shifted to the new government," and added, "We will closely examine the previous processes to identify the real issues and ensure that the project advances swiftly." However, construction is once again delayed as a corporation has not yet been found.