Allegations surrounding the Han River Bus, a signature project of Seoul Mayor Oh Se-hoon, sparked sharp exchanges at a parliamentary audit of the Seoul city government. After ruling party lawmakers raised claims of kickbacks tied to the project and a cover-up by the city, Oh countered that an audit is under way and that he would request a criminal investigation if necessary. Opposition lawmakers focused on housing issues, including rising home prices in Seoul, and Oh pointed to the government's real estate policy as a main driver of the increases.
At the National Assembly Public Administration and Security Committee's audit of the Seoul city government, held on the 15th at Seoul City Hall in Jung-gu, lawmakers scrutinized allegations that a senior executive at Seoul Housing & Urban Development Corporation (SH) received about 1.5 billion won in kickbacks through a broker, drawn from project funds paid to Gadeok Heavy Industries, the shipbuilder for the Han River Bus vessels. Rep. Park Ju-min of the Democratic Party of Korea and Rep. Kim Young-bae of the same party pressed Oh over why no criminal referral was ever made — and why the referral document itself was discarded — even though the mayor was briefed on the allegations last September and ordered that such a document be drafted.
Oh countered that he was aware of the problem at the time and decided to request an audit by the Board of Audit and Inspection rather than conduct an internal review, in order to secure a more objective inquiry. "Around September last year, I was briefed on the allegations and ordered that they be investigated rigorously enough to warrant drafting a criminal referral," he said. "I then requested an audit by the Board of Audit and Inspection covering the overall matters, and judged that the board would also examine these allegations." His point was that an inquiry by a third-party body, rather than an internal audit, was better suited to ensuring objectivity.
On the allegation that the referral document was destroyed, Oh said it "was not discarded." The city also said in explanatory material released the same day that Oh had simultaneously ordered a request for a Board of Audit and Inspection audit and preparations for a criminal referral, and that the city's audit commission accordingly drafted a referral document that it still holds. On the current status, Oh said, "The Board of Audit and Inspection dismissed the audit request, so the city's audit commission is investigating the allegations," adding, "If necessary, we will make a criminal referral and request an audit."
The Han River Bus project's net loss, business viability and fiscal burden also came under scrutiny. "A project like the Han River Bus requires heavy upfront investment, and we explained to the city council that initial losses were expected," Oh said. "Running it this year, revenue has more than doubled from last year, so as originally projected, it should be able to turn a profit after three years."
Opposition lawmakers took up rising home prices and housing supply in Seoul as key issues. Asked by Rep. Seo Myung-ok of the People Power Party about the cause of rising home prices in Seoul, Oh argued that "the current government's housing measures, which place excessive emphasis on owner-occupancy, are producing the side effect of sharply reducing the supply of jeonse (a lump-sum deposit lease) listings even in outlying parts of Seoul, including the northeastern and southwestern areas." He added, "With not only jeonse deposits but also monthly rents rising, many residents come to feel they must take on debt to buy even at high prices out of anxiety, and that is adding speculative demand."
On the effects of the slowdown in redevelopment and rebuilding during the tenure of former Mayor Park Won-soon, Oh said, "With the disappearance of volumes that should have been supplied at a rate of tens of thousands of homes a year, the impact will continue for several more years." He added, "This year 15,000 homes broke ground, and in August we saw the first completion under the city's "Moa Housing" small-lot joint redevelopment program," stressing that the city would continue expanding housing supply through programs such as its fast-track planning initiative.
A dispute also arose over a plan to transfer permitting authority for redevelopment and rebuilding projects of 500 units or fewer to district governments. Oh said, "Handing over the authority would actually slow projects down," voicing concern about the potential for haphazard development as urban planning coordination weakens. Rep. Lee Hae-sik of the Democratic Party of Korea countered that transferring authority over small-scale improvement projects to district governments would in fact speed them up.
Lawmakers also traded blame over missing reinforcing bars found during construction at Samseong Station on the GTX-A line. Asked by Rep. Jin Jong-oh of the People Power Party about responsibility for construction delays, Oh said, "I feel responsible, given that we are in a position of managing the project overall," while noting that the city "notified Korea National Railway of the construction defects six times." On losses from the delays, he said, "If the Ministry of Land, Infrastructure and Transport and the Seoul city government cannot agree on how to share responsibility, it will have to be resolved through litigation."