Invest KOREA

According to Yonhap News,

(BUSAN = Yonhap News) Busan’s Buk-Hang Bridge, the core section of the city’s coastal beltway that will become the new logistics hub in the southern coast of Korea, will be opened on April 11 after seven years of construction.

The city of Busan and Buk-Hang I’Bridge, developer of the Buk-Hang Bridge construction project, announced on March 27 that the bridge will be opened to traffic free of charge for test operations for five months.

Under the construction agreement, the maximum period of the free test operation is up to six months, but the customary duration of the free test operation for privately funded facilities is normally two months.

But as the construction of the Yeongdo access road has been delayed, the city and Buk-Hang I’Bridge decided through recent negotiations to extend the free test operation for three months. The Yeongdo access road connects the Buk-Hang Bridge and Nam-Hang Bridge, and its construction has been carried out by the city’s construction division and is expected to be completed in October.

As a result, the city of Busan will be able to address the low traffic volume of the bridge due to a lack of access roads and lessen the massive burden of the minimum revenue guarantee (MRG).

According to the construction agreement, the daily traffic volume of the Buk-Hang Bridge is forecast to be 49,838 vehicles, and the city of Busan is required to guarantee 80 percent of the toll revenue.

As the traffic volume of the Buk-Hang Bridge is expected to be less than half of the estimated daily traffic volume due to delays in the construction of the Yeongdo access road, the city of Busan will bear KRW 20 million for the MRG per day as soon as the free test operation ends.

“Thanks to the five-month free test operation, we will be able to reduce the burdens of both the MRG and construction of the Yeongdo access road,” said a city official. “We will speed up the construction and finish it up in September when the free test operation comes to an end.”

In exchange for the extension of the free test operation, the city of Busan and Buk-Hang I’Bridge are in negotiations to extend the bridge management and operation period by private investors from 30 years to 30 years and five months.

It is estimated that the three-month extension of the free test operation will result in losses of about KRW 7.5 billion, including additional interest expenses, for private investors.

The Buk-Hang Bridge is a 3,331-meter bridge with a 1.114 km cable-stayed bridge and a 2.217 km connection bridge, connecting Cheonghak-dong in the Yeongdo District to Gamman-dong in the Nam District.

With construction of the Buk-Hang Bridge to be completed, the Cheonmasan tunnel, a 3.3 km-long tunnel that links the Nam-Hang Bridge to Gupyeong-dong in Saha-gu, is the only part of the coastal beltway construction project that is still under construction.

The Cheonmasan tunnel construction project, which started in December of 2011, is scheduled for completion in 2016.