Universal’s plans to open a multi-billion dollar theme park and resort in South Korea have reportedly hit a stumbling block, with the consortium of Korean and Chinese investors behind the project divided over how to finance the mega development.
The plans, which looked dead in the water after three years of silence following the financial crisis,
were resurrected in December last year when the consortium formed to realise the project by 2020.
The state-run Korea Water Resources Corporation (K-Water) selected the consortium, which is made up of companies from both China and Korea, with Daewoo Engineering & Construction and Dohwa Engineering of Korea, Hong Kong-based China Travel Service, and China’s largest construction company the China State Construction Engineering Corporation comprising the group.
According to
The Korea Times, the consortium remains divided over the project’s financing, which has delayed the signing of a formal contract, which was due to be signed by the end of August. That deadline has now been extended.
The deal is reportedly hinging on whether or not the state-run Korea Development Bank (KDB) will be able to fund part of the cost, which is not a guarantee as it is also leading South Korea's restructuring of its burdened shipbuilders, shipping lines and other companies.
If the project fails to gain funding from KDB, which would be a sizeable chunk of the W5tn (US$4.45bn, €3.94bn £3.36bn) costs for the development, it could result in the project’s collapse.
"At the moment, the touchiest issue is whether the consortium will be able to receive state funding," said a consortium official. "We are hoping for good news before long as related government agencies are discussing the issue in earnest."
Initial plans envisage a 4.2sq km (1.6sq m) mixed-use development which will include the Universal theme park, a Korean pop concert arena, accommodation, a golf resort, waterpark and a shopping centre.
The government is trying to push the deal through, provide funding and infrastructure support, as well as offer incentives by designating the site as a foreign investment zone. K-Water has also offered land for the project to cut development costs.
