Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Rival candidates churn out doubtful promises of construction projects
By Nam Hyun-woo
By Nam Hyun-woo
The presidential candidates of rival parties are churning out promises of massive social overhead capital (SOC) projects such as underground railroads, expressways and new airports, in what appears to be a desperate outreach to voters in affected regions with Korea's presidential election now less than two months away.
However, doubts remain over the feasibility of those projects, as the candidates are not coming up with detailed ideas on project financing and execution during their tenure.
Ruling Democratic Party of Korea presidential candidate Lee Jae-myung, center, is briefed by rescue workers during his visit to a collapsed construction site in Gwangju, Jan. 27. Joint Press Corps
On Jan. 24, ruling Democratic Party of Korea (DPK) presidential candidate Lee Jae-myung announced an assortment of pledges for Gyeonggi Province, which focused on improving traffic conditions in the region surrounding Seoul.
As part of the pledges, Lee said he will review a project to take the Yangjae-Dongtan section of Gyeongbu Expressway underground. That section sits on the southern outskirts of Seoul and is one of the most heavily travelled roads when outbound from the capital.
Three days earlier, Lee promised to develop an underground section of the Hannam-Yangjae section of the expressway, which frequently experiences heavy congestion. On Jan. 14, he pledged plans to take Gyeongin Railway and Gyeongin Expressway underground, both of which link Seoul and Incheon.
Lee's election camp said those projects will improve connectivity between Seoul and Gyeonggi Province.
Main opposition People Power Party presidential candidate Yoon Suk-yeol, left, is briefed by an official at a traffic control center in Sejong City, Jan. 22. Yonhap
Main opposition People Power Party (PPP) candidate Yoon Suk-yeol has also made similar promises.
On Jan. 16, Yoon unveiled a plan to take various railways and expressways underground. This includes a 32 kilometer section of Gyeongbu Railway, a 27 kilometer section on Gyeongin Railway and a 13.5 kilometer section of Gyeongwon Railway, which connects Seoul and Wonju in Gangwon Province.
Yoon also promised to take underground sections of Yangjae-Hannam and Gyeongbu Expressways, and secure 600,000 square meters of land.
While making similar promises, the two sides are also making comparable assumptions on the costs of their projects.
According to Lee's camp, it will cost up to 24 trillion won ($20 billion) over the next 15 years for his underground expressway and railway projects. Yoon's camp also assumes that 23.85 trillion won will be needed for the underground railways and an additional 3.3 trillion won to excavate the underground expressway areas.
Yoon's camp said the government can cover approximately 18 trillion won of the costs by commercializing the newly secured land, thereby easing the financial burden for those projects. Lee's side also applied a similar rationale for its financing plans.
This map shows ruling Democratic Party of Korea presidential candidate Lee Jae-myung's proposal to extend high-speed GTX railways linking Seoul and Gyeonggi Province cities. Courtesy of Lee Jae-myung election committee
However, questions remain over the feasibility of those promises, since they are ideas that candidates in past presidential elections have considered at least once, yet failed to pass state feasibility tests.
Rebuilding the Gyeongin railway underground was initially requested by Seoul, Incheon and other municipalities in 2008, and promised by former President Park Geun-hye and incumbent President Moon Jae-in during their respective presidential campaigns.
However, the proposals have failed to pass feasibility tests and have been subject to other political conflicts due to their costs and anticipated difficulties in securing alternative transportation means during the construction period.
In 2015, the governments of Incheon and Gyeonggi Province requested Korea Railroad Research Institute to analyze the construction of a part of the Gyeongin Railway underground. The institute assumed the cost would be approximately 7 trillion won and the cost-benefit ratio stood at 0.74.
Although the Ministry of Land, Infrastructure and Transport requested another study last month to take a part of the Gyeongin Railway underground, it remains uncertain whether the study will produce a different outcome.
Against this backdrop, the candidates are promising to exempt the Gyeongin Railway project from the state feasibility test, demonstrating their intentions push ahead regardless of the costs.
“When the presidential race reaches its final stage, policies promised by different candidates will be indistinguishable,” Lee said, while announcing his idea of taking a part of the Gyeongin Railway underground. “What matters the most is who has the commitment and capability to realize these promises. I, whose commitment and capabilities are proven, will realize these projects.”
Korea requires a project worth more than 50 billion won with more than 30 billion won financed by the government to be subject to a state feasibility study. However, the President can exempt the test for projects such as building government complexes, educational facilities or improving existing infrastructure through presidential decrees.
An aerial view of Heuksan Island, South Jeolla Province / Courtesy of Ministry of Environment
Candidates' pledges on airports also face doubts over their feasibility.
So far, Lee has promised his support for plans to build new airports in the Saemangeum area of North Jeolla Province, Heuksan Island in South Jeolla Province, Ulleung Island in North Gyeongsang Province, and Gadeok Island near Busan.
He also advocated ideas to build airports covering southern Gyeonggi Province and North Gyeongsang Province.
Yoon is also taking a similar stance by giving nods to almost all regional municipalities' demands for airports. When he visited South Chungcheong Province on Jan. 21, he promised a new airport in Seosan.
In question is the feasibility of the new airports. According to Korea Airports Corporation, which manages all airports in the country except for Incheon International Airport, 13 out of 14 airports it manages suffered losses in 2020. Of them, 10 airports, except for Jeju, Gimpo, Gimhae and Daegu, have suffered losses for five consecutive years.
Incheon International Airport, which is run by Incheon International Airport Corporation, saw a 428.8 billion won loss in 2020. The loss expanded to 778.3 billion won last year.
Amid the declining demand for regional airports, it also remains uncertain whether those projects can pass feasibility tests. The Heuksan Island airport project was also a campaign pledge of Moon, but has yet to even select its operating body because the cost-benefit rates have been moving between 0.78 and 4.38 depending on the analysis.
A 2013 study by the Ministry of Economy and Finance showed the project's cost-benefit rate standing at 4.38, but the number declined to 2.6 when the transport ministry tested it in 2017. It further plummeted to 0.78 in a most conservative scenario analyzed in 2020.
“Sadly, the feasibility of such SOC promises is not the priority for candidates,” said Park Sang-byeong, a professor at Inha University Graduate School of Policy Science. “An election is the same as fighting fire with fire. If your rival comes up with an unrealistic but attractive pledge, you can't help but roll out a similar and more attractive one, in order to win the competition. Feasibility and other realistic concerns will come after you win the election.”