KORAIL notifies Hanwha Consortium of impending agreement termination due to unpaid land payments — Daejeon City to pursue joint response with related agencies, including review of development plans and attraction of new business operators

As KORAIL notified the impending termination of the development agreement for the Daejeon Station Area Complex Zone 2-1 project on October 20, Daejeon City plans to explore various measures to normalize the project, such as restructuring the development plan and attracting new private business operators.

Accordingly, Daejeon City plans to work in cooperation with KORAIL to devise a project normalization plan focused on: ▲ improving project feasibility through the restructuring of development plans, ▲ reviewing promotional plan amendments to attract new private business operators, and ▲ operating a joint task force among related agencies.

The Complex Zone 2-1 development project was initiated when KORAIL and the Hanwha Engineering & Construction Consortium signed an agreement to advance the project on October 16, 2020, and obtained approval for the project implementation plan in March 2024.

Subsequently, major administrative procedures such as integrated reviews for the amendment of the project implementation plan were completed in October 2025, but commencement of construction was delayed due to rising construction costs and interest rates, as well as an economic downturn in the real estate market.

In the meantime, Daejeon City has provided continuous administrative support to improve project feasibility, including expanding the ratio of residential facility gross floor area (from 62.3% to 72.6%), raising the floor area ratio (from 700% to 1,100%), and adjusting the scale of introduced facilities.
Examples include increasing apartment units from 987 to 1,184 (a 20% increase) and reducing the convention center gross floor area from 17,187 to 7,489 square meters (a 56.4% decrease).
However, as project organizer Hanwha Engineering & Construction maintained its stance that it is difficult to secure project feasibility, the project implementer (Daejeon Station Area Development PFV) ultimately failed to pay the balance of the land price by the payment deadline of October 19.

Daejeon City plans to re-examine the existing 72-story development plan and recalculate appropriate scales for introduced facilities—such as residential, commercial, retail, and lodging facilities—to ease the burden of construction costs and enhance project feasibility.

Along with this, while continuously discussing development intentions with potential investment companies such as major construction companies, the city plans to analyze existing bidding conditions and project feasibility to prepare improvement measures for attracting private investment, thereby initiating a re-bidding process.

In addition, the city aims to form a joint task force (TF) consisting of KORAIL, Dong-gu District, and experts, and concretize future promotion directions through role-sharing and collaborative management among institutions, including development plan amendments and the attraction of new business operators.

Choi Soo-jung, Director of the Urban Bureau of Daejeon City, stated, "The Daejeon Station Area development is an important project for revitalizing the old downtown and creating a regional growth hub," adding, "We will closely review the existing development plan and project structure, and cooperate closely with related agencies to prepare a viable project normalization plan."

Through consultation with KORAIL, Daejeon City intends to seamlessly pursue follow-up procedures with the goal of re-bidding for a new private business operator in the second half of 2027, doing its utmost to ensure that the Daejeon Station Area development project is resumed as soon as possible.

[ⓒ Global Economic Times. 무단전재-재배포 금지]