SEJONG CITY (South Korea), July 2: South Korea on Monday inaugurated a mini-capital to house much of the nation's government, ending a decade of wrangling over a project seen by critics as driven by politics.

About 2,000 residents and dignitaries from Seoul attended the launch of Sejong City, which will cost 22.5 trillion won ($19.4 billion) when completed.

The stated aim is to rebalance national development in a country where Seoul and its satellite cities account for almost half the population, and to ease congestion in the capital area.

“The city... will open a major new era in the history of the country's balanced development,” Prime Minister Kim Hwang-Sik said in a speech.

Sejong City, 120 kilometres south of Seoul, will by 2015 house 16 ministries or agencies and 20 central government offices currently located in or near the capital.

More than 10,000 civil servants will work there.

But some 10 state bodies including the president's office, the foreign ministry, the defence ministry and parliament will stay in Seoul.

Critics say the split government will lead to wasted travelling hours and inefficiency.

Some say the project was largely intended to win votes in the central Chungcheong region, traditionally the home of uncommitted voters wooed by both parties.

“There are worries that the division of central government bodies can cause inefficiency,” Kim acknowledged. “We will try hard to quell such concerns and to forge a good balance and coordination among the agencies.”

The new city, covering 465 square kilometres, is named after the revered 15th century king who developed Korea's alphabet.

The idea for it came from Roh Moo-Hyun when he was running for president for the main left-leaning party in 2002. He envisaged Sejong as a new national capital, but the constitutional court rejected this in 2004. Roh modified his plan, keeping some ministries in Seoul.

Conservative President Lee Myung-Bak took office in 2008 and wanted to scale down the project to make it a science, business and education hub instead of a government centre.

But a rebel faction from his own party, lead by his rival Park Geun-Hye, joined the opposition to derail his plans.

Park — a likely leading presidential contender in this December's election — attended Monday's ceremony, while Lee did not.

The government estimates the city's population — currently about 120,000 — will rise to 500,000 by 2030, with its economy expected to grow steadily.Critics say this is wishful thinking.

The state Board of Audit and Inspection said in February that a lack of private-sector investment was likely and the city could miss the 2030 population target.

“Sejong City will be remembered as a colossal disaster, created by populist politicians afraid of saying no,” Cho Dong Keun, an economics professor at Myongji University, said last week.

Local residents were more bullish Monday, saying many lives had changed for the better thanks to compensation payments for land.—AFP