South Korea to push special law for 'mega zones' to boost large projects

South Korea is set to pursue legislation by the end of the year to establish "mega zones" for large-scale development projects, aiming to accelerate investment and streamline regulatory processes. Presidential Office Senior Secretary Kang Hoon-sik announced the plan, stating the special law will shorten procedures for permits, environmental impact assessments, and the development of essential infrastructure like power, water, and transportation, alongside residential and educational facilities.

Kang emphasized that these mega projects should serve as a catalyst for "bold deregulation and breaking down inter-departmental barriers." To achieve this, the government will identify and address specific obstacles hindering investment, particularly in regional areas. A dedicated "mega project task force" will be established within the Presidential Office, complemented by an inter-agency support council in the Prime Minister's Office to foster collaboration.

However, a key point of contention remains the "special clause for the 52-hour work week" within the special law. A senior government official noted that this provision requires consensus among the local community and labor sector, stating it is not a matter that the President or the Presidential Office can unilaterally dictate. The government is carefully considering this aspect.

To combat K-shaped economic polarization, the government will actively promote win-win cooperation strategies to ensure the benefits of mega project investments spread throughout the industrial ecosystem. Kang highlighted the importance of proactive policy design from the project's inception, ensuring benefits extend beyond large corporations to include suppliers and small and medium-sized enterprises. For the semiconductor industry, a 10-year, 1 trillion won "Grow Together" project will be launched for joint technology development and mass production, supported by 5 trillion won in trade finance for export-focused material, component, and equipment companies. A new 5 trillion won semiconductor fund will also be established for promising SMEs and fabless companies.

Regarding infrastructure, plans include designating an additional 2.5 million pyeong of land near the Gwangju military airport as a national industrial complex, contingent on corporate demand. Power and water supply will be secured promptly, with the first phase of power lines in the Honam region scheduled for completion by late 2028. Renewable energy sources, energy storage systems, and LNG power generation will also be expanded for stable power supply.

Kang reported on significant investment pledges: 392 trillion won from eight companies in the Chungcheong region, with 246 trillion won from six companies including SK Hynix and Samsung Electronics set to begin construction or expansion this year. In the Yeongnam region, 12 companies announced 312 trillion won in investments, with eight companies including SK, Samsung Electronics, and LG Innotek planning to commence construction or expansion on projects worth 107 trillion won this year. Additionally, R&D projects totaling 57 trillion won are slated to begin without delay.