The government plans to link renewable energy pilot complexes to its planned mega industrial zones while lifting a package of regulations, aiming to strengthen industrial competitiveness and sharply improve living conditions in the areas. Officials concluded that attracting advanced industries such as semiconductors and artificial intelligence data centers outside the greater Seoul area requires not only power supply networks but also attractive communities equipped with talent, education and medical infrastructure.
According to the Democratic Party of Korea and the government on the 6th, the party and the government have built a separate set of provisions into the Mega Zone Special Act to support renewable energy pilot complexes. The core plan is to designate parts of mega zones or nearby areas rich in renewable energy resources as renewable energy pilot complexes, and to give priority in supplying renewable power generated there to companies operating in the zones. The approach would create a legal basis for companies to secure the electricity they need by signing power purchase agreements, or PPAs, directly with generators.
Securing a stable supply of renewable power would also allow companies to meet global supply chain requirements such as RE100. The government and the ruling party plan to place renewable generation and advanced industries together in regions where industrial power demand is concentrated, building an industrial ecosystem in which electricity is consumed in the same region where it is produced.
Along with these measures, the Mega Zone Special Act will contain hundreds of exemptions aimed at boosting industrial competitiveness and improving infrastructure within the zones. The bill, set to be introduced this month, is said to include 264 articles and some 330 general exemptions applicable to all zones.
The party and the government decided to exempt companies that build or expand plants inside mega zones from the electricity industry infrastructure fund levy, which accounts for 2.7% of electricity bills. A three-year exemption period is the leading option under review.
Siting rules will be significantly eased to speed up infrastructure construction in the zones. The party and the government first decided to streamline various permit and approval procedures for development plans within the zones. If a mega zone includes greenbelt land, project operators will be allowed to carry out land grading and other changes to land形 before the greenbelt designation is lifted, so that plants can be built quickly. Administrative procedures for dam construction and water and sewage systems will also be shortened. Benefits on floor area ratios and building-to-land ratios will be granted for industrial facilities.
Investment rule exemptions to lower financing hurdles are also being pursued. The government is seriously considering easing the mandatory stake a sub-subsidiary must hold in a lower-tier unit to about 50% from the current 100%.
Industry-specific exemptions will also be prepared. Unmanned robots would be exempt from traffic regulations, while self-driving vehicles would receive eased rules on the use of personal data. Regulatory exemptions long sought by industries such as shipbuilding and energy will also be included in the bill.
Sweeping incentives to attract talent have been prepared as well. Special housing allocations will be permitted not only for employees of companies investing in mega zones but also for teachers, medical professionals and others relocating to the zones. The aim is to ease the burden of settling in by offering a portion of privately built new homes in the zones as special supply. Special supply provides units separately from general supply, meaning lower competition and relatively higher chances of winning an allocation.
To ease worries about children's education, the government will also grant exemptions for establishing special-purpose high schools such as international and science high schools, as well as schools for gifted students. As a way to attract talent from abroad, the system will be revised to allow special admission to foreign schools for the children of overseas recruits. A ruling party official said, "Many top professionals in the greater Seoul area avoid working in the provinces or choose to live apart from their families because of their children's education," adding, "Building an education and housing environment where entire families can relocate and settle is the key to the success of the mega zones." Exemptions are expected to be considered for procedures to establish special-purpose high schools in the zones as well as for facility and teacher standards, along with allowing curricula tailored to local industries.
Cultural and lifestyle infrastructure will also be strengthened. Procedures for establishing hospitals in the zones will be simplified, and rules will be eased to attract facilities such as hotels and shopping malls. On transportation infrastructure, the central government will take the lead in committing budget funds in place of local governments that lack fiscal capacity. Democratic Party leader Kim Min-seok earlier said the party would review extending the Great Train Express, or GTX, C line to Cheonan and Asan in Chungcheongnam Province for a Chungcheong-region mega project worth about 392 trillion won.
Labor exemptions that have not been agreed on because of opposition from labor groups, such as exempting research and development staff from the 52-hour workweek, will be settled through social dialogue. The labor exemptions originally prepared by the government also included extending the period for employing fixed-term workers to four years from two and lengthening the settlement period for flexible working hour systems to six months from three.
The party and the government plan to introduce the Mega Zone Special Act this month after reaching agreement on the labor exemptions through social dialogue. Rep. Jang Chul-min, secretary of the Democratic Party's mega zone committee, told reporters on the 4th after a party-government meeting, "Introduction will of course likely happen in September," adding, "We will introduce it as a lawmaker-sponsored bill through the National Policy Committee, raise the quality of the provisions through a drafting process involving stakeholders, the public and the National Assembly, and then push it forward by making it the party's official position."
