The Korea Railroad Corporation is expected to have a legal framework in place to directly implement the integrated railway underground development project. While the qualification for project implementation has been granted to the specialized agency for railway construction and facility management, the government’s comprehensive plan, which determines the project scope and scale, has been delayed by more than seven months from its original schedule. Preparations for organizational structure and funding have also not progressed at a satisfactory pace.
According to the National Assembly on August 2, the revised bill on the 'Special Act on the Integrated Development of Railway Underground and Railway Sites' was amended and passed by the National Assembly's Legislation and Judiciary Committee on July 29.
Current law stipulates that only agencies designated by the government to receive state-owned assets can be appointed as project implementers. Although the Korea Railroad Corporation, a government-funded institution, is responsible for railway construction and facility management, it has not met the requirements to take on projects directly. Initially, there were plans to establish a separate subsidiary under the corporation to handle the underground project, but the direction shifted to allow the corporation to implement it directly.
If the revised bill passes the plenary session, the Korea Railroad Corporation can be designated as the project implementer without the need to establish a separate legal entity. This is expected to allow the corporation to utilize its expertise in designing and constructing railway lines, relocating existing facilities, and managing train operation safety from the outset, ensuring consistent management of the schedule and costs for both the underground construction and the development of the above-ground sites. It will also clarify the implementation entity and responsibility structure, reducing uncertainties in project advancement.
However, there are concerns that even if the revised bill strengthens the legal foundation for the project, actual implementation requires the Ministry of Land, Infrastructure and Transport to first finalize the comprehensive plan for the railway underground development. This plan will include the routes to be undergrounded, the scope of development, phased implementation schedules, and funding strategies. Based on this, basic plans for each project can be established, and the roles of implementers and agencies, as well as the necessary organizational and personnel scale, can be clarified.
The Ministry of Land, Infrastructure and Transport set a goal to establish the comprehensive plan by December 2025 in its implementation plan for the railway underground development project announced at the end of 2024. However, the number of routes proposed by local governments has exceeded expectations, and the time required to review funding, project viability, and the distribution of development benefits among regions has delayed the announcement into the next year.
While the Ministry has not confirmed a specific announcement date, there are discussions within the railway industry that the comprehensive plan may be released in the second half of this year or by year-end. If announced at the end of this year, it would be about a year later than the original target. Leading projects in cities like Busan, Daejeon, and Ansan have begun the basic planning process ahead of the comprehensive plan, but other regions must wait for the plan to be included before they can start subsequent procedures.
The delay in the comprehensive plan has also hindered the Korea Railroad Corporation from beginning specific organizational preparations for direct implementation. The corporation currently executes projects worth 60 to 70 trillion won annually. If many routes are included in the future comprehensive plan, it will need to manage large-scale underground projects separately from its existing railway construction and management tasks, necessitating the establishment of dedicated organizations and the expansion of specialized personnel.
Debate remains over the effectiveness of funding procurement. The revised bill allows local governments to establish a special account for railway underground projects and utilize costs for public facility installations, development levies, property taxes, and general account transfers from the affected areas as project funding.
According to a review report from the National Assembly's Land, Infrastructure and Transport Committee, cities like Seoul, Busan, and Gwangju have suggested that provisions related to the special account should be removed. They argue that public facility installation costs can be irregular in revenue generation and may be paid in kind, while development levies and property taxes are basic local government revenues, making it difficult to incorporate them into the special account of metropolitan governments.
The long and narrow linear structure of railway sites is also cited as a constraint on securing project viability. While there is relatively high demand for development in the metropolitan area, maintaining existing railway operations during construction could increase costs. In rural areas, it may be challenging to cover underground costs solely through above-ground development profits, potentially widening the gap in project viability between regions.
A railway industry official stated, "The legal amendment provides a basis for the Korea Railroad Corporation to participate as a project implementer, but we need to distinguish this from the actual organization that will carry out the project. The comprehensive plan must be released to gauge the overall project scale and the corporation's role, allowing for a detailed review of the necessary organization, personnel, and funding strategies."
* This article has been translated by AI.
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