Lotte’s Concern
The signing of a contract between the Ministry of National Defense and Lotte Group to secure the location of a US missile defense system in South Korea is expected to be delayed.
The Ministry of National Defense plans to complete the acquisition of a golf course owned by the Lotte Group conglomerate in the Seongju region for the Terminal High Altitude Area Defense (THAAD) system placement by the end of this month. However, it hasn’t revealed the result of assessments which is the preceding step.
In regard to a possible delay for the land exchange contract to secure the THAAD deployment, South Korean defense ministry spokesman Moon Sang-gyun said in a regular news briefing on January 16, “The administrative procedures for the exchange are currently underway but the schedule is more or less flexible. We said the contract will be signed by mid-January, but there is a possibility it will be slightly delayed.”
The Ministry of National Defense is now in talks with Lotte to swap the Lotte Skyhill Country Club in Seongju County, North Gyeongsang Province, the site where the THAAD system is to be deployed, with a military reservation in Namyangju, Gyeonggi Province.
Earlier this month, the ministry was planning to release the result of assessments on the 17th, but Lotte was opposed to the plan. Accordingly, it is unclear that the two sides will be able to enter into the contract by the end of this month. Industry watchers say that Lotte, which operates various businesses in China, is reluctant to sign the contract due to concerns over damage to its businesses as China has taken retaliatory measures against the company.
In this regard, Moon said, “The appraisal of the plots of land was completed last week. Lotte needs to hold a meeting of the board of directors to approve the final assessment fee, and the meeting will be held soon.”
The Ministry of National Defense needs to push forward the plan as quickly as possible in order to complete the THAAD deployment by the end of September. However, Lotte shows no enthusiasm for signing the land exchange contract. Therefore, there are concerns that the deployment plan can be confronted with a problem.
Defense Minister Han Min-koo is said that he recently tried to have a meeting with Lotte Group Chairman Shin Dong-bin over the matter but failed to do so. Regarding this, Moon said, “Negotiations are currently underway, so it will not be appropriate to comment on this.”
Moon said to a question as to whether Defense Minister Han plans to contact Lotte Group Chairman Shin Dong-bin, “We are currently talking over the matter.”
In regard to when to reveal the result of assessments, the Ministry of National Defense said, “We must release the result for public on the Internet within 40 days after the assessment is confirmed. So, we need to talk with Lotte as to when to release it.”
When the signing of the land exchange contract with Lotte is delayed, other procedures to the THAAD deployment will be delayed as well. The ministry needs to go through some administrative procedures on the acquired site, such as environmental effects evaluation and use purpose change, and provide it to the U.S. Army according to the U.S.-South Korea Status of Forces Agreement. (SOFA). So, all eyes are on whether to carry out an environmental effects evaluation.