By Yun Suh-young
South Gyeongsang Province is under criticism from the public as increased toll fees for crossing Machang Bridge linking Masan and Changwon will start Aug. 1.
The province said the toll fee will go up by 25 percent from the current 2,000 won for small cars to 2,500 won and from 2,500 won for midsize cars to 3,100 won. The maximum amount of increase will be 1,000 won for extra large vehicles from the current 4,000 won to 5,000 won.
The increase in the toll fee follows the severe loss the province is facing since the building of the bridge due to an incorrect prediction of the number of expected users. As actual usage failed to reach even 40 percent of the expected amount, the province decided to raise the toll fee to tackle the deficit.
The toll fee for the 1.7 kilometer bridge had initially been 2,400 won per vehicle when the bridge was first opened in July 2008.
Users complained that was too expensive and in September 2009 the fee was reduced to 2,000 won. In two months, the new toll fee will be higher than the initial one set to cross the bridge.
The South Gyeongsang Province had been facing difficulty covering the loss as it must pay back financial investor, Macquarie Korea Infrastructure Fund (MKIF). The company which is investing in the bridge is contracted to receive the Minimum Revenue Guarantee (MRG) from the province even when the bridge is making a profit below the minimum revenue level.
Users, however, criticize the province’s move to increase the toll fee out of the public’s pocket just to compensate the private investor based on the MRG agreement. The MKIF is blamed for expanding its investments in various Korean infrastructure projects through the MRG system and not at any risk even when projects go into debt.
MKIF has invested in 14 projects here to build roads, a subway and a port. One of the major infrastructure projects causing controversy is the construction of Subway Line 9. The subway operator decided to increase the subway fee by 50 percent in June to deal with the deficit to pay back its investors. The operator, however, received a backlash from the public as Seoul City spent a huge amount of money to plug the losses of Line 9 operators to protect its investors from excessive losses based on the MRG agreement.
MKIF also invested in other projects such as the construction of the expressway to Incheon International Airport, the Incheon Bridge, and Mt. Umyeon Tunnel.
In the Machang Bridge project, MKIF holds 70 percent of the shares.