[Exclusive] Separating Reviews, Bundling Contracts... Controversy Over 'Elastic Administration' in Seoul's Nodeul Island Project

[비즈한국] It has been confirmed that while the Seoul Metropolitan Government pushed forward with the 440 billion won 'Nodeul Global Art Island' project, it split the investment review process into two while bundling the design contract into a single agreement. Although the city had previously explained that the reviews were separated due to differences in permitting procedures, the actual contract was signed as a single project for 'Nodeul Global Art Island Design Services.' In particular, criticism has been raised that the city undermined administrative consistency by signing the design contract before the medium-term project had even passed its investment review.

Seoul Metropolitan Government split the investment review into two while bundling the design contract into one for the 440 billion won 'Nodeul Global Art Island' project. Thomas Heatherwick's 'Soundscape' rendering. Source=Provided by Seoul Metropolitan Government

'Unified' Competition, 'Separated' Review, 'Integrated' Contract

In February 2024, the Seoul Metropolitan Government launched an international design competition for the 'Nodeul Global Art Island' project, setting the entire Nodeul Island area (119,854㎡), excluding military facility sites, as the project area. According to the competition outline, the design scope included not only the base and waterfront areas (waterfront cultural space) but also aerial and ground areas (aerial walkways, etc.). It was based on the premise of integrated design from the start, with an estimated design service fee of approximately 13.9 billion won.

In February 2024, the Seoul Metropolitan Government set the entire Nodeul Island as the project area when launching the international design competition for the Nodeul Global Art Island project. Source=Nodeul Global Art Island Design Competition Guidelines

However, during the investment review stage, Seoul split the project. It underwent separate reviews for the 36.1 billion won 'waterfront cultural space (short-term)' and the 404.2 billion won 'sky art garden (medium-term).' This led to criticism from the Seoul Metropolitan Council and others regarding 'split reviews.' The city explained, "We are maintaining the overall concept but pursuing the projects separately. Since the master plans were established together but the project implementation methods and stages differ, we separated them to allow for quicker public access."

At the contracting stage, it became one project again. When signing the design contract with the domestic architectural firm that partnered with competition winner Thomas Heatherwick, the city bundled the short-term and medium-term projects—which had undergone separate reviews—into a single contract. In effect, the city separated the reviews citing different implementation methods, but proceeded with the contract as a 'single project.'

An official from the Ministry of the Interior and Safety stated, "It is difficult to judge individual cases as the Ministry was not the one to receive the investment review request. However, while reviews can be split if the purposes are different even on the same site, the principle is that projects under the same purpose must undergo review together."

The Seoul Metropolitan Government maintains that there is no problem with the administrative procedures. A city official explained, "Investment reviews are a process for setting the ceiling on investment costs for projects. While the contract was handled as one, we manage the costs incurred for the project by dividing them into short-term and medium-term segments. The budget lists them as a single project."

“Individual Projects and Individual Contracts are the Principle”

The bigger issue is the timing of the contract. According to the design service contract for the Nodeul Global Art Island project submitted by the Seoul Metropolitan Government to City Council member Park Soo-bin (Democratic Party of Korea), the city signed a 'long-term continuous contract' for the design services on September 2, 2024. A long-term continuous contract is a method where the total amount is fixed, and annual contracts are made within the budget limits of each fiscal year. The city set the total service amount at approximately 13.9 billion won, which includes the design fees for both the short-term and medium-term projects.

As of September 2, when the contract was signed, the 'Nodeul Island Sky Art Garden' medium-term project had not yet passed its investment review. This project only passed the Investment Review Committee on September 12, ten days after the contract was signed. In a state where the investment review process for the medium-term project was not finished, the city effectively signed the design contract for the entire project using the 'long-term continuous contract' method.

Kim Sang-chul, a senior researcher at the Nara Institute for Policy, pointed out, "If the investment reviews were separated, it means they are separate projects. Under contract law, individual projects are meant to have individual contracts. Basically, the principle of expenditure is that it should occur when the cause for expenditure arises. Separating project reviews while treating them as one project for the contract is certainly a point of contention."