Busan, South Korea – The monumental project to establish the Seobusan Medical Center has taken a significant leap forward. On September 18th, 2023, the City of Busan officially announced the foundational plans for the construction of the medical center. A pivotal business briefing is set to take place on September 25th at 2:00 p.m. at the Saha-gu District Office to select preliminary negotiating parties.
The foundational project plan encapsulates the essence of the project. This includes adjusted total project cost, project execution conditions, facility scale, and requirements, forming the cornerstone for private investors to submit project proposals.
In preparation for this announcement, the city engaged the Korean Development Institute (KDI) for a preliminary review. A private investment review meeting was held on August 29th. This foundational plan follows the private investment approval in August and the designation of the Seobusan Medical Center construction project as a BTL (Build-Transfer-Lease) private investment target in December last year.
The BTL model involves a unique partnership: a private entity undertakes the construction of the facility, following which its ownership is handed over to a public entity, in this instance, the City of Busan. The facility is then leased back to the original private constructor, granting them operational rights for a designated period, ensuring they have ample time to recover their initial investment.
The upcoming construction is a significant step toward the realization of the Seobusan Medical Center. Once viability and eligibility are confirmed through private investor eligibility investigations, it will usher in the formal phase of private investment projects. Typically, this initial phase stems from the establishment of foundational project plans.
Based on these plans, the city will organize business briefings and subsequently receive and evaluate proposals from private businesses. The chosen entity for preliminary negotiations will then be selected, leading to a series of procedural follow-ups aiming to complete the Seobusan Medical Center by 2027.
The Seobusan Medical Center, to be executed via the BTL private investment method, is envisioned as a comprehensive hospital spanning a massive area of approximately 15,750 square meters with a total floor area of 32,773 square meters, housing 300 beds.
Furthermore, in a commitment to the successful progression of the construction project, the city inked a business agreement with the Saha-gu District in March. Allocations for land acquisition will be incorporated into next year’s central budget.
Park Heong-joon, the Mayor of Busan, expressed fervent dedication to the project, noting the importance of alleviating medical disparities between eastern and western Busan. The mayor emphasized the establishment of the Seobusan Medical Center as a pivotal public hospital that will strengthen the public health system and serve as a vital hub for emergencies, including potential outbreaks akin to the COVID-19 pandemic.
The detailed announcement delineates specifics about the project, including the total budget of 78 billion KRW (excluding VAT, based on January 1, 2021, fixed prices), the requirement for private investors to source at least 5% of the total personal investment cost as equity capital, and the BTL mode of operation.
The City of Busan is actively involving the public in the project’s progression. Scheduled events include a business briefing on September 25th, submission deadlines for qualifying examination documents on October 16th, and subsequent announcements and steps spread across the following months.
Such strategic partnerships between the city and private sectors are shaping a resilient healthcare future for Busan, setting a robust model for other cities to follow.