Priority Negotiation Consortium for Seochang~Gimpo and Osan~Yongin Highway Construction: Hyunsan and Hyundai

[Asia Economy Reporter Yuri Kim] The HDC Hyundai Development Consortium and Hyundai Construction Consortium have been designated as the preferred negotiation candidates for the SeoChang~Gimpo Expressway and Osan~Yongin Expressway private investment projects, which are the first and second third-party proposal public offerings of private investment projects this year.

The Ministry of Land, Infrastructure and Transport announced on the 15th that these consortia have been designated as preferred negotiation candidates and that negotiation teams will be formed to begin negotiations for the execution agreement starting next month.

The SeoChang~Gimpo Expressway project, for which the HDC Hyundai Development Consortium was selected as the preferred negotiation candidate, has a project cost of 757.4 billion KRW and a total investment of approximately 900 billion KRW. Through this project, a total length of 18.27 km section connecting the SeoChang Junction, where the 2nd Gyeongin Expressway and Yeongdong Expressway meet, to the Jangsu IC of the Seoul Ring Expressway and the New Gimpo Tollgate will be connected underground. It is expected to facilitate traffic flow in the western section of the Seoul Ring Expressway and connect the previously unlinked sections of the 2nd Gyeongin Expressway, Yeongdong Expressway, and Seoul Ring Expressway. The consortium includes HDC Hyundai Development, GS Construction, Geumgwang Enterprise, Taeyoung Construction, and Doosan Construction.

The Osan~Yongin Expressway project, for which the Hyundai Construction Consortium was selected as the preferred negotiation candidate, connects the northern end Annyeong IC of the disconnected Gyeonggi Pyeongtaek~Hwaseong Expressway and the southern end Seosuji IC of the Yongin~Seoul Expressway, with a total length of 17.2 km. The project cost is 901.3 billion KRW. This project is expected to complement the north-south axis function of the metropolitan area centered on the Gyeongbu Expressway. The Hyundai Construction Consortium includes Daewoo Construction, SK Construction, and Ssangyong Construction.

These projects were promoted as the first and second third-party proposal public offering private investment projects this year. According to the "Private Investment in Social Overhead Capital Act," proposals for construction and operation plans were solicited from operators other than the original proposers to select superior proposals. These consortia were selected as the original proposers of the projects after going through the first and second stage evaluations. All projects are planned to be promoted as profit-sharing type private investment projects (BTO-a, Build Transfer Operate-adjusted), where losses and profits are shared between the Ministry of Land, Infrastructure and Transport and the consortium. The target completion is 60 months after groundbreaking. The private operator's operation period is 40 years after completion.

Meanwhile, the Ministry of Land, Infrastructure and Transport plans to conduct a more thorough verification of the appropriateness of the proposed project costs, operating costs, and traffic demand during the negotiations starting next month, considering that there was no competition during the second stage evaluation for both projects. Since the projects include long-distance deep underground tunnels, the ministry plans to thoroughly confirm that there are no factors threatening public safety during construction and operation.