Meeting the Surging COVID-19 Logistics Demand... Supplying Logistics Facilities on Idle Highway Land

Aerial view of the candidate site for the pilot project to install logistics facilities on idle land near Giheung IC on the Gyeongbu Expressway (Provided by the Ministry of Land, Infrastructure and Transport)

[Asia Economy Reporter Lee Chun-hee] As the demand for logistics surges due to the spread of the novel coronavirus infection (COVID-19), the government is set to supply logistics facilities by utilizing idle land along highways.

The Ministry of Land, Infrastructure and Transport and Korea Expressway Corporation announced on the 10th that they will recruit private operators to install and operate logistics facilities on idle land near the Giheung Interchange (IC) on the Gyeongbu Expressway.

In response to the rapidly increasing logistics demand driven by the spread of non-face-to-face culture amid the COVID-19 pandemic, the Ministry and Expressway Corporation identified 34 candidate sites for logistics facility installation on idle highway land such as green belts at ICs and junctions (JCTs), abandoned roads, and former service and rest areas at the end of July. Since September, they have been conducting a service to discover business models tailored to logistics companies’ needs and analyze project feasibility.

Among the candidate sites, the Ministry and Expressway Corporation selected approximately 16,000㎡ of idle land owned by the Expressway Corporation near Giheung IC as the pilot project site. This decision was based on its location about 30 km from Yangjae IC, making it easily accessible to Seoul and surrounding cities such as Yongin and Dongtan.

This project will be promoted using the BOT (Build-Operate-Transfer) method, where private operators lease the land, construct and operate logistics facilities, and after a certain period, acquire ownership. The Expressway Corporation plans to provide maximum support, including relocating obstacles, basic water and electricity construction, and installing an exit road directly connecting the project site to the Gyeongbu Expressway, including a Hi-Pass IC.

The lease period is set at 30 years to guarantee long-term operation, and the rent floor is set at 5% of the publicly announced land price. The adjusted land price will be reflected every 10 years.

Interested operators must visit the Expressway Corporation by the 23rd of next month to submit proposals and bid on rent through the Expressway Corporation’s electronic procurement system from the 21st to the 23rd of next month. The highest scorer will be selected as the preferred negotiation candidate by combining scores from the proposal section (80%) and price section (20%) within this year. Proposal evaluation criteria include development plans, business execution capability, financial plans, and management and operation plans. Since the project is led by the government and public institutions, public interest aspects such as support for small and venture companies will also be evaluated.

Detailed information can be found in the operator recruitment announcement to be posted on the websites of Korea Expressway Corporation and Korea Integrated Logistics Association on the 12th. A project briefing session will be held at 2 p.m. on the 18th to provide guidance on proposal preparation and a Q&A session. For further inquiries, contact Korea Expressway Corporation.

Joo Hyun-jong, Director of the Road Bureau at the Ministry of Land, Infrastructure and Transport, said, "Since it is difficult to expand logistics facilities within urban areas, we hope many companies will participate as the pilot project site is an attractive location." He added, "In addition to promoting the pilot project, we will establish a comprehensive plan for building logistics facilities on idle highway land as soon as possible."

This content was produced with the assistance of AI translation services.