The Navy has been ordered to pay 27.3 billion won ($23.2 million) in compensation to a construction company after environmental protests delayed a project to build a naval base on Jeju Island, the defense procurement agency said Friday.

Environmental and village protesters had staged massive rallies against the naval project on the southern resort island of Jeju, leading to a major delay in construction.

In efforts to solidify naval defense near the island, the Navy devised the plan in 2007 to build a harbor big enough to accommodate 20 battleships and two cruise vessels along Gangjeong village on the southern tip of the island.

In an arbitration decision in June, the Korean Commercial Arbitration Board ordered the Navy to pay the sum to Samsung C&T Corp., an official at the Defense Acquisition Program Administration said.

After being informed of the decision, the DAPA allocated the budget to the Navy to pay the bill earlier in the day, the official said.

Samsung C&T signed a contract with the military in 2010 to build a dock to accommodate two cruise ships, but construction did not begin until 2012 due to severe protests.

Samsung C&T had initially demanded the military pay about 36 billion won to cover the costs of laborers and construction equipment that had been put on stand-by during the construction delay.

The DAPA official said it is also planning to use its right to indemnity, asking the protesters to reimburse the compensation.

If completed as scheduled by the end of this year, the 1 trillion won project will allow South Korea a launching point from which to send naval vessels into southern waters, the key trade route for the country.

A Navy official said protesters are preparing a major rally near the construction site for Aug. 3, when their demonstration marks the 3,000th day since launching. (Yonhap)