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Analysis Area: Daegu Metropolitan City

Core Areas: Daegu Metropolitan City Council, Daegu City Hall, Industry AX Innovation Hub, Future Industry Investment Projects, Daegu-Gyeongbuk New Airport Related Project Zones

Agenda: Has a legislative system been established to verify policies regarding AI projects, M.AX investment, the new airport, robots, semiconductors, and healthcare through budget, ordinances, audits, and outcomes?

Golden Time Type: Oversight Gap + Irreversible Investment Risk

Reference Date: August 28, 2026

Version: Regional AX Golden Time Intelligence v3.2
 

The 2026 main budget for Daegu City, deliberated by the Daegu City Council, amounts to 11.7078 trillion won, and has expanded to 12.1988 trillion won when the first supplementary budget bill is included. As large-scale multi-year projects—such as AI, robotics, semiconductors, future mobility, and the Daegu-Gyeongbuk New Airport—are proceeding simultaneously, the scope of the Council's scrutiny has shifted from single-year budget execution to long-term industrial performance and fiscal risks. However, a Council disclosure system that tracks project-specific investment amounts, corporate revenue, employment, regional retention, and subsequent financial burdens across the same timeline has not been confirmed. If budget deliberations remain limited to annual project explanations for two to three years, it is difficult to control failure costs following the initial investment.  Verdict: While the scope of the Daegu City Council's scrutiny has expanded, the unit of verification remains centered on single-year projects.

The 10th Daegu City Council launched in July 2026 with 36 members and a system comprising six standing committees: Operations, Planning and Administration, Culture and Welfare, Economy and Environment, Construction and Transportation, and Education. While a structure was established for the new council to simultaneously review AI administration, funding for the new airport, investment in future industries, and the development of Gunwi, issues regarding the increase in first-term members and a shortage of policy support personnel were raised even within the council. The next two to three years overlap with the learning period of the 10th Council, coinciding with the time when funding, commencement, and corporate attraction for large-scale projects become fixed.  Assessment: There is a risk that the pace of legislative capacity formation will lag behind the speed of irreversible project decisions.

During the 2025 administrative audit, the Economy and Environment Committee audited the Daegu Digital Innovation Promotion Agency and institutions related to future industries, while the Planning and Administration Committee questioned the Daegu Policy Research Institute regarding the New Airport Industrial Technology Complex Master Plan and performance indicators. AI, the new airport, and industrial policy were included in the scope of the Council's audit. However, integrated audit results linking common outcomes across projects, changes compared to the previous year, comparisons with external regions, and performance over 2 to 3 years following investment were not confirmed. If agency-specific audits are maintained for the next 2 to 3 years, the budget, research, corporate support, and employment performance of the same industrial project will be dispersed across multiple standing committees.  Verdict: The M.AX project is being audited, but the entire M.AX transition is not being audited.

The 2026 settlement audit is structured so that 10 individuals, including city council members and accounting and finance experts, review the revenue and expenditure, funds, financial statements, and performance reports of Daegu City and the Office of Education over a period of 20 days. While the system functions to verify the legality of the budget and the efficiency of its execution, the duration and scope of expertise are limited in verifying the technological achievements and long-term outcomes of AI, the new airport, and industrial investments. As large-scale projects begin full-scale implementation over the next two to three years, normal accounting execution and underperformance in policy may occur simultaneously.  Assessment: The capacity of the settlement audit is focused on financial verification and addresses the verification of industrial transition only partially.

The Daegu City Council has developed legislative capabilities, including the utilization of AI in member workshops and training, and in 2026, it also reorganized the Policy Research Committee and the system for member research groups. While the foundation for individual members' AI utilization and policy research is expanding, a dedicated environment for the Council to continuously analyze project performance by directly accessing executive data has not been confirmed. If training and research groups operate as individual activities for two to three years, a verification standard for the entire Council will not be established.  Verdict: An AI learning foundation exists, but an AI-based oversight system is not yet in place.

The Daegu City Council reviewed and approved the 2026 main budget of 11.7078 trillion won through its standing committees and the Special Committee on Budget and Accounts. While budget deliberation examines project objectives, calculation bases, and implementation plans, the results of the M.AX project—such as corporate process innovation, productivity, sales, and employment—occur over several years after execution. There are still instances where the number of supported companies or trainees substitutes for final outcomes, and the public link between the pre-investment baseline and post-investment changes remains limited. If evaluations centered on output indicators continue for two to three years, the budget is executed, but the actual industrial transformation remains undetermined.  Verdict: The Daegu City Council's budget control is functioning, but outcome control is not structured.

During the settlement review, it was confirmed that budget transfers resulting from the 2024 organizational restructuring amounted to 149 cases and 510 billion won. If organizations related to future industries and the new airport are repeatedly reorganized, the departments, budget categories, and project managers change, making continuous tracking difficult. If the Assembly receives data at the fiscal year and departmental level, cumulative investment and performance of the same project are disrupted. If additional organizational restructuring for the AI ​​transformation is implemented over the next two to three years, the cost of linking past budgets with current outcomes will increase.  Verdict: While organizational restructuring can accelerate the executive branch, it lowers the Assembly's long-term traceability.

In 2025, the Economic and Environmental Committee questioned the Daegu Digital Innovation Promotion Agency regarding its performance compared to the previous year and its institutional operations, and the administrative audit report pointed out issues regarding the formality of internal performance indicators and supervision. Evidence exists that the Council expanded the scope of verification from the agency's activity volume to the appropriateness of performance indicators. However, common indicators verifying the productivity increase of AI-supported companies, the on-site retention rate of AI models, and changes in revenue and employment after the termination of support were not disclosed. If indicators vary by project over a period of two to three years, it becomes impossible to compare priorities and failure rates among AI projects.  Verdict: While issues regarding AI projects have been raised, a framework for comparing outcomes has not been established.

Daegu City established an AI Administrative Innovation Team in 2026 and is pursuing generative AI subscriptions, administrative automation, and the construction of its own AI administration platform in 2027. Administrative AI has expanded from a separate informatization project to become a standard practice across all aspects of city administration. However, independent standards for the City Council to audit algorithm accuracy, personal information, liability for errors, reductions in working hours, and changes in citizen services have not been confirmed. If the platform spreads throughout the administration within two to three years, it will become difficult to mitigate technical risks through post-hoc ordinance and budget reviews alone.  Verdict: While the executive branch's Administrative AX has commenced, the Council's Algorithmic Oversight is still in the pre-preparation stage.

Daegu is fostering future mobility, robotics, healthcare, semiconductors, and ABB as its D5 industries, distributing R&D, corporate support, infrastructure, and workforce training projects to various institutions. While the Economic and Environmental Committee audits individual institutions and projects, no publicly available data has been found tracking the amount of support received by the same company across multiple projects or their integrated performance. Even if the number of supported companies increases, the possibility remains that revenue, investment, and employment may be counted twice. If cumulative performance at the corporate level is not verified over the next two to three years, industrial policy performance will be presented as the sum of the number of projects.  Verdict: Daegu's future industries are being pursued as a portfolio, but the Council is verifying them on a project list basis.

Corporate attraction and industrial complex projects present the amount of investment agreements, projected employment, and production inducement effects as initial outcomes. While actual investment execution, factory operations, local hiring, and supplier revenue occur in subsequent stages, reports to the Congress do not continuously disclose the entire process of a single company. If agreement outcomes and operational outcomes cannot be distinguished over the next two to three years, projected effects are perceived as actual outcomes.  Verdict: The Congressional Industrial Verification GAP lies in its inability to separate announced investments from executed investments.

While the basic plan for the Daegu-Gyeongbuk New Civilian Airport has been officially announced as a state-funded project worth approximately 2.7 trillion won, the relocation of the military airport involves a donation-to-transfer structure of approximately 11.5 trillion won, and the upfront financing has not yet been finalized. With an annual cost increase of 300 to 400 billion won being discussed due to project delays, financial risk has expanded in a combined form involving construction costs, financing costs, and the development value of the vacated site. Although inquiries regarding funding and schedules are confirmed in the council meeting minutes, no system for the continuous disclosure of total burden amounts and risk limits for each scenario has been identified.  Verdict: The new airport is the council's top priority for long-term financial verification, yet the verification remains at the level of inquiries regarding current issues.

New airport-linked projects, such as the Gunwi Advanced Industrial Complex, Sky City, and access roads and railways, are dispersed across different agencies, funding sources, and standing committees. Even if the feasibility of individual projects is recognized, the overall outcome of the economic zone will be lower if simultaneous opening fails. No publicly available parliamentary evidence has been found regarding an integrated review of the critical paths and delay costs between projects. If individual budget deliberations continue for the next two to three years, bottlenecks in the overall schedule cannot be identified early.  Verdict: The gap in the supervision of the new airport lies in the separation of individual facility verification and the verification of the entire economic zone.

Although the Daegu City Council operates a policy support officer system in accordance with the Local Autonomy Act, demands have been raised internally for an expansion of the policy support system and specialized personnel per council member by 2026. The internal assessment is that professional support capabilities are insufficient compared to the work structure in which 36 council members simultaneously review a budget in the 12 trillion won range as well as issues related to AI, industry, the new airport, health, and education. If technology projects increase over the next two to three years, the limited support staff will concentrate on ordinances, inquiries, and document preparation, while long-term data analysis will be relegated to a lower priority.  Verdict: The Council's expertise gap stems from the organizational capacity to handle continuous analysis, rather than from individual council members.

It was reported that the systems for lawmaker research groups and policy research committees were strengthened in the new assembly in 2026, with six research groups having applied. While the scope of autonomous policy research has expanded, common procedures linking research results to budget reviews, audit inquiries, and performance indicators have not been confirmed. If research is fragmented based on terms of office and topics of interest, repeated verification is not accumulated. If research outcomes do not remain as parliamentary data assets for two to three years, the same investigation will be repeated in the next assembly formation.  Verdict: While the foundation for policy research has expanded, the structure for accumulating it as institutional memory remains unconfirmed.

Daegu City possesses the D-Data Hub, an industrial and economic trend system, and proprietary administrative data, and is pursuing the establishment of a Daegu-type AI administration platform by 2027. While the executive branch's data accessibility and analysis speed are increasing, no dedicated system has been identified that allows the council to independently access the same data and models. If the council relies on reports processed by the executive branch, it is difficult for the council to verify analysis methods and excluded data. If data asymmetry widens over the next two to three years, a supervisory gap between the AI ​​administration and the document-based council will become structural.  Verdict: The Daegu City Council's greatest AX risk is information asymmetry with the executive branch, rather than a lack of technology.

Administrative audits intensively scrutinize the executive branch through the submission of data and inquiries over a set period, while settlements review the results of execution after the end of the fiscal year. Signals of failure for the M.AX project, such as corporate withdrawals, schedule delays, cost increases, and declining utilization rates, occur even between sessions. The Council's Runtime Dashboard, which automatically monitors monthly and quarterly anomalies, has not been publicly verified. If a structure centered on annual audits is maintained for two to three years, the next budget and contracts may have already been executed by the time risks are discovered.  Verdict: The Daegu City Council conducts periodic inspections but does not perform Runtime Oversight.

The 10th Assembly consists of 36 members, 6 standing committees, a Special Committee on Budget and Accounts, and a system for settlement audits and policy support. Although AI, the new airport, and future industries were included as subjects for actual audits and inquiries, integrated outcome indicators, long-term project IDs, and an environment for accessing data dedicated to the Assembly were not verified. If the existing legislative methods are maintained for the next 2 to 3 years, the gap in project scale and verification capabilities will widen. Assessment: The current level of readiness is at the stage of 'recognition of audit subjects – lack of established outcome verification system.'

AI and industry are primarily handled by the Economic and Environmental Committee, Administrative AX and finance by the Planning and Administration Committee, and new airports and transportation by the Construction and Transportation Committee. Although inquiries regarding M.AX have spread to various standing committees, a structure for jointly verifying cascading risks between projects has not been identified. When the same company, budget, or infrastructure spans multiple committees, responsibility and outcomes are fragmented. If committee-specific oversight continues for two to three years, the comprehensive outcomes of the regional M.AX transition cannot be definitively assessed by any single committee.  Assessment: While the M.AX agenda has spread to standing committees, integrated oversight has not.

Audits of the Daegu Policy Research Institute and its affiliated organizations pointed out the appropriateness and formality of performance indicators, and the review of their validity was also mentioned in the opening address of the Council in 2026. A shift is confirmed in which the Council has begun to recognize the indicators themselves as subjects for verification. However, there is no common outcome dictionary that includes AI productivity, investment realization, local hiring, industry-specific revenue, and long-term retention rates. If institution-specific indicators are maintained for two to three years, performance comparisons between projects and decisions to discontinue them are limited.  Judgment: While the issue with the indicators has been recognized, standardization is still in the pre-initiation stage.

AI utilization training,議員 research groups, and the policy support officer system support the digitalization and professionalization of legislative activities. However, there is no evidence that AI-based ordinance analysis, budget anomaly detection, duplicate checks for similar projects, and performance tracking have spread as standard tasks for standing committees. A gap remains between individual utilization and the parliamentary operational system. If reliance on individual capabilities continues over the next two to three years, the variability in verification quality among members will widen.  Assessment: Legislative AI is in the stage of educational diffusion, while Legislative AX is in the pre-institutionalization stage.

The funding for the new airport, the Gunwi Advanced Industrial Complex, the AI ​​Administration Platform, and the Manufacturing AX project are in the stage where funding, contracts, and locations are being finalized between 2026 and 2028. The 10th Council will also establish new systems for expertise, standing committee operations, and policy support during the same period. If the establishment of a verification system lags behind the project decision, the Council will be forced to verify already signed contracts and sunk costs retrospectively.  Judgment: The Council's Golden Time is not after project outcomes are achieved, but rather the next 12 months during which performance evaluation criteria are finalized prior to the contract.

AI, new airport, and industrial complex projects incur continuous operating costs, maintenance, and follow-up investments after the initial infrastructure is established. If conditions for suspension, reduction, or redesign are not set during the initial budget approval stage, even low-performing projects are extended due to sunk costs. If multi-year outcome criteria are absent over the next two to three years, the irreversibility of the budget expands into the irreversibility of the project. Assessment: The first risk of irreversibility is the absence of objective criteria to terminate failing projects.

In the 10th Daegu City Council as well, a composition was formed in which 34 out of 36 members belonged to the People Power Party and 2 to the Democratic Party of Korea. While an overwhelming majority of a specific party accelerates the speed of decision-making, the density of testing opposing hypotheses may decrease if the policy directions of the executive branch and the council majority align. If independent data verification fails to replace the function of partisan checks and balances for two to three years, optimistic prospects for large-scale projects will persist for a long period.  Verdict: The second irreversible risk is not a lack of political diversity, but rather the lack of mechanisms to institutionally generate opposing evidence.

The Daegu City Council is reviewing the M.AX project, but it does not yet have a system to verify the actual outcomes of the M.AX transition.

The current supervisory structure is aligned with budgets, agencies, and fiscal years, whereas industrial transformation occurs on a company, regional, and multi-year time axis.

If the executive branch’s AI and data capabilities increase faster than the legislature, information asymmetry becomes entrenched as a greater supervisory risk than a lack of legislative capacity.

Final Grade: ORANGE–RED — Formal Oversight Capacity + Outcome Audit Gap

Golden Time Window: 12 months

Evidence Sources

• Formation of 6 Standing Committees for the First Half of the 10th Daegu City Council
• 2026 Daegu Metropolitan City Budget Proposal Review Report
• 2026 Daegu City Supplementary Budget Proposal
• 2025 Daegu Digital Innovation Agency Administrative Audit
• 2025 Economic and Environmental Committee Administrative Audit Results Report
• Administrative audit of Daegu Policy Research Institute and New Airport Industrial Technology Complex
• Appointment of Members for the 2025 Fiscal Year Settlement Audit
• Internal Assessment of Daegu City Council's Policy Support Capabilities
• Daegu City requests AI data center implementation plan
• Daegu City Administrative Organization Reorganization and Council Review Tasks

Structural Insight — Congress's time is the budget year, and the time of industrial transformation is the investment lifecycle.

The Assembly repeats budget proposals, administrative audits, and settlements every year. In contrast, AI infrastructure, corporate attraction, new airports, and industrial complexes go through the stages of planning, agreement, design, execution, operation, and performance across multiple fiscal years and organizational restructuring. Because the two timelines differ, even projects legally approved each year can become underperforming projects over their entire investment lifecycle.

When organizational restructuring occurs, the budget and responsible departments change, and standing committee members and policy officials are also replaced after local elections. Projects continue, but the verification body's memory is severed. Information asymmetry arises where the executive branch maintains project continuity, while the council requests new data for each session.

The condition for the establishment of the Council AX lies not in using AI to draft questionnaires, but in the project's unique ID being maintained across the organization, budget, and term of office.  Structural Judgment: The Daegu City Council's M.AX verification gap arises from the time structure in which the project's investment lifespan is longer than the council's fiscal year, rather than a lack of expertise.