Second Since Samsung C&T... 16 Years Adrift
Disagreement Over Construction Cost Increase... Seoul City "Two-Track Private and Public Financing"
The Wirye Sinsa Line light rail project, connecting the Gangnam area of Seoul and Wirye New Town, has once again stalled. This follows the GS Construction consortium, the preferred bidder, announcing its intention to withdraw from the project. The Seoul Metropolitan Government plans to select a new private operator and is also considering public funding if no private operator is found.
On the 11th, Seoul Mayor Oh Se-hoon attended the regular session of the Seoul Metropolitan Council and stated, "The conditions for private investment projects have deteriorated, and the companies participating in the consortium have already expressed their intention to withdraw," adding, "We have been informed that GS is unlikely to re-enter the project."
The Wirye Sinsa Line is a light rail route connecting Wirye New Town and Sinsa Station (Line 3) in Gangnam-gu, Seoul. It will span a total length of 14.7 km, with 12 stations planned, including Daechi-dong and Samseong-dong in Gangnam-gu and Garak Market in Songpa-gu.
The Wirye Sinsa Line was planned as part of a metropolitan transportation improvement plan since the construction phase of the new town in 2008. Although it is a long-awaited project for the residents of Wirye, who suffer from insufficient public transportation, it has yet to break ground even after 16 years. Initially, Samsung C&T was selected as the lead contractor, but the project was delayed when they withdrew in 2016. Later, at the end of January 2020, the GS Construction consortium was selected as the lead contractor and took over the project, but the rapid increase in material costs and interest rates worsened the conditions, preventing progress once again.
In fact, the Seoul Metropolitan Government and the GS Construction consortium have been negotiating over increased construction costs, but failing to reach an agreement ultimately led to the private operator withdrawing from the project. A GS Construction official said, "Since winning the project in 2020, unforeseen issues such as COVID-19 and the war have caused construction costs to rise sharply, making it difficult to bear," and added, "We hope the Wirye Sinsa Line project will be promptly restarted."
The Seoul Metropolitan Government plans to reissue the third-party proposal announcement in the second half of the year and designate a preferred bidder. If no participants come forward, the project will be converted into a publicly funded investment. This is to maintain momentum for the project, but if pursued as a public investment, construction could be delayed by about three years compared to a private investment project. Therefore, the initial plan is to restart the project as a private investment.
Yoon Jong-jang, Director of Urban Transportation at the Seoul Metropolitan Government, said, "We are well aware of the hopes of local residents who have endured transportation inconveniences for a long time," adding, "While prioritizing the prompt advancement of the Wirye Sinsa Line project, we are also reviewing stable implementation plans to ensure thorough progress."
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