Suwon City Files 1.5 Billion Won Lawsuit Against Korea Electric Power Corporation

Suwon City has filed a lawsuit demanding the return of 1.5 billion won in underground cabling relocation costs paid to Korea Electric Power Corporation (KEPCO) in connection with the development of Suwon Industrial Complex Zone 3.

During discussions with KEPCO regarding the underground cabling of power lines for Suwon Industrial Complex Zone 3, the city requested the relocation and removal of utility poles within the project site in November 2009.

KEPCO charged approximately 1.5 billion won based on the principle of cost-bearing by the causing party, in accordance with Article 72 (Relocation of Facilities) of the Electrical Business Act, and the city paid this amount in March 2010.

At the time, as the landowner was the state (Ministry of Food, Agriculture and Fisheries, etc.), the city paid the relocation costs for utility poles from the position of provisional landowner, on the assumption that KEPCO, a state-owned enterprise, had obtained lawful occupancy rights.

However, in September, when free transfer of the land to the city was completed, the city belatedly confirmed the fact of unauthorized use and raised issues regarding KEPCO's improper charges.

Based on the results of an internet inquiry to the Ministry of Knowledge Economy regarding the responsible party for relocation costs of unauthorized utility poles, the city requested KEPCO's return of the funds, but KEPCO took the position that repayment was not possible.

Accordingly, the city, upon receiving legal counsel from its advisory lawyer, is pursuing recovery of approximately 1.5 billion won in relocation costs received without legal cause through an unjust enrichment lawsuit.

Depending on the outcome of the litigation, if the city succeeds in recovering the relocation costs for unauthorized utility poles, it is anticipated that the ripple effects nationwide will be significant.

An official from Suwon City's Public Development Division stated, "We will carefully review charges and other payments demanded by KEPCO according to various project types to ensure there is no waste of budget. We believe this situation would be identical nationwide and plan to seek inter-agency work-sharing and institutional improvements to prevent recurrence."

Regarding this matter, an official from KEPCO's Seo-Suwon Branch stated, "We have already sent an official letter to Suwon City based on legal grounds regarding this matter," and added, "Since the matter was pursued based on law, there should be no problem."

Meanwhile, Suwon City is pursuing the development of Industrial Complex Zone 3, targeting completion in March 2013, centered on core advanced technology industries such as IT and BT.