Yongin Light Rail Transit Dispute Heads to Courts in Public-Private Sector Litigation

The operational status of the Yongin Light Rail Transit appears destined to escalate into a 'private-public' lawsuit.

Over the matter of whether the Yongin Light Rail Transit, scheduled to open in July this year, will operate, the private operator Yongin Light Rail Transit Co., Ltd. announced its position to proceed with administrative litigation against Yongin City, the competent authority.

On the 16th, Yongin Light Rail Transit Co., Ltd. held a press conference at Hotel Castle in Uman-dong, Suwon, stating "further delays in opening would cause significant damage not only to the Yongin Light Rail Transit project but also to Yongin citizens," and announced that it "will proceed with administrative litigation against Yongin City's refusal to grant completion certification for the light rail transit."

According to Yongin Light Rail Transit, the company has legally completed construction in accordance with the approved implementation plan from Yongin City, and currently only the opening remains.

The company has received safety certification related to user safety from relevant agencies including the Ministry of Land, Transport and Maritime Affairs, and the construction supervisor has confirmed this as well.

However, Yongin City has claimed facility shortcomings such as noise problems and has continuously delayed the opening. Ultimately, on the 10th, it rejected the completion certification for the completion report submitted by Yongin Light Rail Transit Co., Ltd.

Yongin Light Rail Transit states that it can no longer bear the losses from operations in a situation where completion certification has been denied.

Construction costs to date have reached approximately 620 billion won, and due to the delay in opening, daily interest of 120 million won and monthly operating expenses of 2.8 to 3 billion won are being wasted.

Accordingly, Yongin Light Rail Transit plans to undertake inevitable restructuring to reduce losses from deficit operations. If Yongin City continues to refuse completion certification and opening, there is a possibility of terminating the Yongin Light Rail Transit project.

In such a case, Yongin City would assume ownership of all facilities related to Yongin Light Rail Transit and must compensate the operator for the full investment amount. According to SOC private investment operators, the worst-case scenario could involve creditors taking legal action against Yongin City to recover project loans.

Additionally, residents of the Gugal and Dongbaek areas who relocated to Yongin City in anticipation of the light rail transit opening, as well as students from the greater Seoul area enrolled at Kangnam University, Myongji University, and Songdam University, are expected to heighten their complaints about the opening delay.

Furthermore, Yongin Light Rail Transit Co., Ltd. provided explanations regarding the 'Minimum Revenue Guarantee (MRG)' and 'noise complaints,' issues through which Yongin City had previously shifted responsibility to the private operator.

In the case of MRG, the company pointed out that ▲failure to manage predicted traffic demand ▲delay in the opening of the Bundang Line extension (Ori to Suwon) ▲changes in the metropolitan transportation system were all responsibilities that should have been managed by Yongin City, the competent authority.

The company also stated that the noise problem is an environmental matter that Yongin City should resolve, and that as the operator, it has already reached an agreement with residents of the Dongbaek area who filed complaints for 'opening first, completion certification later.'

Kim Hak-pil, CEO of Yongin Light Rail Transit Co., Ltd., said "Ultimately, as Yongin City anticipated declining demand for light rail transit due to changes in metropolitan transportation policy, it can only be seen as intentionally delaying completion certification and opening to reduce the city's burden of MRG subsidies."

Yongin Light Rail Transit is the 'first light rail transit to open in Korea' and serves as a model project that could set a precedent for domestic light rail transit projects. For Yongin Light Rail Transit to fulfill its role under current circumstances, a change in Yongin City's attitude appears most necessary.

CEO Kim stated "We have run to achieve the light rail transit opening while accepting all of Yongin City's unreasonable demands so far," and conveyed "whether the social and economic benefits of Yongin Light Rail Transit will be returned to Yongin citizens depends on Yongin City."