Thursday, June 14, 2007

South Korea: Public dissent over private toll roads is growing.

Drivers angry over high toll fees levied by private firms

Citizens say money collected surpasses original construction costs


The Hankyoreh (South Korea)
Copyright 2007

As private road construction companies collect tolls to repay the cost of their work, public dissent in the Seoul area is growing over the amounts collected, which are said to surpass the original investment in the road.

In rural areas, the situation is often the opposite, with local governments having to pay out of pocket for privately-built roads after traffic figure predictions are overestimated.

Toll roads in the Seoul metropolitan area are choked with collection booths, and drivers have continually demanded the fees be lowered. The tolls collected by the companies are justified as paying for the roads' cost. However, public dissent is growing as drivers say the money made from these tolls is fast surpassing the original cost of building the road.

Tolls collected from the privately-built road between Uiwang and Gwacheon, Gyeonggi Province, totaled 23 billion won (US$24.7 million) last year, or 627 won per car passing via the road. Cumulative income since opening the road is estimated at 204.6 billion won for more than 320 million cars, which is well past the original investment of 123 billion won. Users of the road argue that the tolls should now be abolished.

An official at the construction authority of Gyeonggi Province said, "As the payment system was supposed to last until 2011 under the original contract between government and the construction company, and it cost 89 billion won to widen a road between Hoegui and Gwacheon, it is inevitable for the company to continuously collect the toll fees.''

The existing law for toll roads states that the total amount of tolls should not exceed construction and maintenance expenses of the related road. However, If the company invests further into widening the road, additional charges would usually be accepted by the authorities as a reason to keep the tolls open.

The second outer ring road of Seoul between Ilsan and Toigyewon opened this year and has recorded a toll income of 19 billion won in six months. Seoul Beltway Co., the private company that built the road, is discussing a way to return its surplus to the government. A group of citizens in Goyang, through which the road passes, has urged the company to lower the tolls, claiming that it could record a surplus due to expensive toll fees. The company, however, hasn't revealed the primary cost of the road, so there is no way for the citizens to figure out the exact situation.

Residents of Yeongjong and Yongyu islands and workers at Incheon International Airport have opposed the April abolishment of a toll fee reduction on the Incheon International Airport Expressway which was also built by a private company. They had been granted about a 50-percent toll cut since August 2003, but the system was abolished after the opening of the airport railway this year.

According to an Incheon government official, "The toll cut had been granted to them because there was no other way to other cities including Seoul and Incheon from the locations in question. But now, the airport railway is a good alternative." But Kim Seon-jang, a 60-year-old citizen of Yeongjong island, said, "The tolls on the airport expressway are about 4.8 times higher than ordinary expressways and the fee to use the airport railway is also four to ten times more expensive than subway fares.''

In other situations, especially in places other than the Seoul metropolitan area, toll roads are not collecting as much as had been expected in order to repay the cost of the road's construction. This is causing local governments to struggle to fill the construction companies' loss under the contracts between the two. For example, the Gwangju city government earmarks 15 billion won every year from its budget to repay the company that built its second outer ring road, as traffic figures have fallen short of predictions. Busan allowed private investors to spend 77.2 billion won to build a tunnel there in 2002, but the city has been paying the funder 5 billion won every year out of its budget as traffic through the tunnel has remained at about 61 percent of the estimated figure.

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