Despite scandal, duty-free licenses to be issued Saturday
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The Korea Customs Service will begin evaluations for the much coveted duty-free licenses today, and the winners will be announced Saturday.
Despite the political scandal surrounding the process, five bidders have been competitively releasing their plans for investment to gain favor in the selection process.
Three out of four of the new licenses are allocated for conglomerates, for which five retail giants – Lotte Duty Free, HDC Shilla Duty Free, Shinsegae Duty Free, SK Networks and Hyundai Department Store – submitted bids in early October.
Lotte Duty Free, which seeks to reopen a store at the Lotte World Tower in Jamsil, said it would invest 2.3 trillion won ($1.97 billion) over five years to establish tourism infrastructure in southern Seoul. The company intends to use the Seokchon River and Olympic Stadium nearby to organize a cherry blossom festival in April and a fall festival in November. The Lotte Duty Free in Jamsil would be the largest duty-free store in Korea.
SK Networks wants to revive the Walkerhill Duty Free in Gwangjin District, near Seoul’s eastern end. One of the company’s grand plans is to open a resort spa that would add to the area’s scarce tourist sites. It was the only bidder to propose tourism development outside of Seoul in Gapyeong, Gyeonggi, which is popular with domestic tourists with venues such as Namiseom Island and Petit France.
Shinsegae Duty Free promised to invest 350 billion won to expand the tourism infrastructure around Seocho and Gangnam District, near where it hopes to build its second branch. The company’s strength is in its location, Banpo-dong, in Seoul’s center. Its plans for tourism and cultural development are focused on promoting infrastructure in the area, such as pedestrian passages around landmarks like the Seoul Arts Center in Seocho-dong or the Floating Island, and a premium gourmet festival in Itaewon.
“Its initial plan submitted in October said the company would invest 30 billion won in Gangnam’s tourism in the next five years.”
HDC Shilla Duty Free, run by Hotel Shilla and Hyundai Development Company, has focused on IT and Korean culture, to attract young tourists to a second branch at Samseong-dong in Gangnam, southern Seoul. HDC Shilla’s focus is to collaborate with small and midsize shops in its second branch, particularly in cosmetics, accessories and food.
Hyundai Duty Free is going for another shot to open in COEX. Its initial plan submitted in October said the company would invest 30 billion won in Gangnam’s tourism in the next five years. Hyundai’s plan focuses on Korean pop culture, including an idol theme park beside COEX. Last month, it said its 50 billion won plan includes support for Gangnam’s cultural development and donations to the needy.
Meanwhile, 61 independent and opposition party lawmakers released a statement Tuesday requesting that KCS postpone selecting duty-free operators until suspicions about Lotte and SK Group are resolved. The companies are being investigated for promising licenses in return for donations this year to K-Sports Foundation, a nonprofit linked to President Park Geun-hye’s confidante Choi Soon-sil.
However, the Korea Customs Service said that many companies have been awaiting a decision, which cannot be delayed over political matters. The office said Wednesday it would rather take back licenses afterward from companies found to have conducted illegal practices for the selection.
It also said it will release detailed evaluations of companies selected as winners. In November 2015, the office was criticized after Lotte and SK lost their licenses without clearly being informed why, raising doubts on the procedure’s fairness.
Questions & Answers
Q.Which companies are being investigated in relation to the political scandal mentioned in the article?
Which companies are being investigated in relation to the political scandal mentioned in the article?
Lotte and SK Group are under investigation. They are suspected of promising licenses in return for donations to the K-Sports Foundation, which has links to President Park Geun-hye’s confidante.
Q.What is the Korea Customs Service's stance on the calls to delay the selection process?
What is the Korea Customs Service's stance on the calls to delay the selection process?
The Korea Customs Service stated that a decision cannot be delayed due to political matters, as many companies have been awaiting it. They prefer to revoke licenses later if illegal practices are found.
Q.What investment plans has Lotte Duty Free outlined for its proposed store at Lotte World Tower?
What investment plans has Lotte Duty Free outlined for its proposed store at Lotte World Tower?
Lotte Duty Free plans to invest 2.3 trillion won over five years to build tourism infrastructure in southern Seoul. This includes using the Seokchon River and Olympic Stadium for cherry blossom and fall festivals.
Q.Which bidder proposed tourism development outside of Seoul?
Which bidder proposed tourism development outside of Seoul?
SK Networks was the only bidder to propose tourism development outside of Seoul, specifically in Gapyeong, Gyeonggi. This area is popular with domestic tourists and includes sites like Namiseom Island.
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