The state audit agency on Monday revealed that a controversial cable car project on Seoraksan is riddled with irregularities, calling for related Yangyang County officials to be penalized.

The project, initiated by Gangwon Province’s Yangyang County in 1995, aims to build a 3.5-kilometer cable car system on the southern region of the mountain in Yangyang. Environmental groups have opposed the project and filed for an audit in December.

According to the Board of Audit and Inspection’s findings, the county government violated regulations concerning projects that require budget from the local government.

The BAI has requested the Ministry of Interior caution the chief of Yangyang County and the county government to penalize three officials involved in the project.

Under local regulations, projects requiring an investment of 10 billion won ($8.8 million) or more from local governments must be approved by the Ministry of Interior. Yangyang County, however, signed on a contractor in March 2015 and paid 800 million won in advance. The county also signed a purchase contract with a different company in March 2016. However, with the Cultural Heritage Administration ruling that the project would damage cultural assets in the region, the project faces a shutdown. If the project is called off, the county government stands to lose up to 3.62 billion won.

The project has been a controversial issue between officials and environmentalists.

Officials claimed the project would provide a means of convenient transportation to the peak of the Osaek area hiking course. However, activists have argued the mountain’s natural environment must be preserved.

In 2012 and 2013, the county government submitted its cable car construction plans, but both were rejected due to environmental issues that it may pose a threat to wildlife in the vicinity.

Since January, the BAI has conducted an on-site inspection and reviewed relevant documents, following environmental activist groups’ application in December last year to inspect the environment assessment of the project.

Meanwhile, a government arbitration commission last week ruled in favor of Yangyang County for its cable car project. In the ruling, the Central Administration Appeal Commission called for CHA to allow Yangyang County to build a cable car system on Seoraksan.

By Kim Da-sol (ddd@heraldcorp.com)