The City of Busan announced a signing ceremony for the ‘Seunghak Tunnel Private Investment Project implementation agreement’ in the City Hall.
This ceremony signifies the endorsement of the Seunghak Tunnel project, marking a crucial step in its commencement. Both Mayor Park Heong-joon and President Yoon Young-joon of Hyundai Construction Co., Ltd. attended the event. With this agreement, the execution of the project, including the start of implementation design, will gain momentum.
The ‘Seunghak Tunnel Private Investment Project,’ connecting Sasang District’s Eomgung-dong and Jung District’s Jungang-dong (Chungjang-ro), was initially proposed by the Hyundai Construction Consortium in May 2016. After passing various administrative procedures, it got approved by the Ministry of Strategy and Finance’s Private Investment Project Review Committee in March.
The project, set to be executed using the BTO* (Build-Transfer-Operate) method – a system where a private enterprise constructs a facility, transfers ownership to the government, and operates the facility for a certain period to earn revenue – will take five years to construct and will operate for thirty years. The tunnel will be 7.69 km in length, with a two-way, four-lane road.
With the opening of the Seunghak Tunnel, an access road network for the 2030 Busan World Expo, the travel time (during peak hours) from North Port to Gadeok New Airport will reduce from the current one hour to approximately 40 minutes, thereby greatly improving accessibility. Toll fees have been set at 1,500 KRW, a 95 KRW reduction from the initial third-party proposal (1,595 KRW), aiming to lessen the financial burden on the citizens.
The city plans to complete the implementation design of the Seunghak Tunnel by the first half of 2024, commence construction in the second half of 2024, and ensure that it opens before the inauguration of Gadeok New Airport in 2029.
Busan City Mayor Park stated, “The construction of the Seunghak Tunnel will not only contribute to the balanced development between the downtown and western Busan regions but also play a significant role in mitigating the traffic caused by the construction of the Gadeok New Airport, the redevelopment of North Port, and the hosting of the 2030 Busan World Expo. We will do our utmost to ensure the successful hosting of the 2030 Busan World Expo and the opening of the Gadeok New Airport, along with the inauguration of the Seunghak Tunnel as an access road network.”
The Seunghak Tunnel Project will be realized through the BTO method. This approach is used where a private enterprise, in this case, Hyundai Construction Co., Ltd., will construct the facility. Once completed, ownership will be transferred to the government, after which the private enterprise will operate the facility for a specified duration to earn revenue.
The tunnel project’s blueprint spans from Sasang District’s Eomgung-dong to the North Port in Jung District, Chungjang-ro. The length of the project is designed to be 7.69 kilometers, with a breadth enough to accommodate a four-lane road.
In terms of finances, the total project cost is projected at 500 billion KRW. The government will provide 170 billion KRW in support, with private investment covering the remaining 330 billion KRW. These cost estimations are based on constant prices as of March 1, 2016.
The construction phase of the tunnel is estimated to last for 5 years. Once completed, the tunnel is planned to be operational for 30 years.
Adhering to the BTO model, there won’t be any Minimum Revenue Guarantee (MRG) provision in this project’s implementation strategy.
