Goyang City, "National Pension Service Full of High-Interest Revenue Project Suspicions" Ilsan Bridge Toll Cancellation Lawsuit

Goyang City, "Unreasonable Profit Structure of National Pension Service, Unfair Toll Exploitation"
Ilsan Bridge Co., "Total Traffic Volume Exceeded Expectations, but Financially at a Loss"

Ilsan Bridge Tollgate [Provided by Goyang City]

[Asia Economy Reporter Ra Young-cheol] Goyang City in Gyeonggi Province announced on the 14th that it "plans to file a lawsuit to cancel the toll imposition against Ilsan Bridge Co., Ltd."

According to the city, the traffic volume on Ilsan Bridge has increased more than threefold compared to when it first opened, securing sufficient profitability. In addition, Gyeonggi Province has paid 47.4 billion KRW over 12 years under the Minimum Revenue Guarantee (MRG) contract.

The city claimed, "The National Pension Service, the largest shareholder of Ilsan Bridge, is still continuing high-interest profit businesses without efforts to improve the unreasonable profit structure."

Furthermore, it was analyzed that the National Pension Service has already earned profits exceeding the loan principal solely from the interest income on the 183.2 billion KRW loan it provided to Ilsan Bridge Co., Ltd. on December 31 of last year.

In particular, the city estimated that the subordinated loan of 36.1 billion KRW lent by the National Pension Service to Ilsan Bridge Co., Ltd. was formally a loan, but after executing the loan, it was recovered the next day through a paid-in capital reduction, and the loan was used as a means for the pension fund to earn massive interest income.

The city stated, "The National Pension Service applied a high interest rate of as much as 20% on the subordinated loan and collected 68 billion KRW in interest expenses," adding, "We will uncover suspicions such as the structure that makes it impossible for Ilsan Bridge Co., Ltd. to make a profit due to excessive borrowing interest expenses, thereby exempting corporate tax."

So far, Ilsan Bridge Co., Ltd. has been criticized for charging a toll of 660 KRW per kilometer, which is six times higher than major private roads, infringing on the transportation rights of residents in the northwest region of Gyeonggi Province.

The city has designated the toll imposition cancellation lawsuit as an important case and plans to actively respond to negotiations on the acquisition amount following the public interest disposition.

Mayor Lee Jae-jun of Goyang emphasized, "Transportation rights are the third basic right essential for accessing all fundamental rights of life, including housing, jobs, living, and culture."

Meanwhile, while residents welcome Goyang City's firm policy of free tolls, the private operator is strongly opposing it.

Ilsan Bridge Co., Ltd. stated, "Although the total traffic volume exceeded expectations, trucks classified as types 3 and 4 hardly operate compared to initial estimates, and the introduction of small car discounts, which were not included in the contract, has resulted in financial losses."

The National Pension Service, the major shareholder of Ilsan Bridge Co., Ltd., has only shown a general stance, saying, "We will actively cooperate if local governments propose reasonable measures."

Currently, it is reported that the National Pension Service estimates expected profits until 2038 at 700 billion KRW, which is expected to lead to disputes over the acquisition amount.

Ilsan Bridge, connecting Gimpo and Ilsan in Gyeonggi Province, was opened in 2008 through private investment with a 30-year minimum operating revenue guarantee.

Among the 28 bridges over the Han River, Ilsan Bridge is the only one operated as a toll bridge. The toll is 1,200 KRW for a round trip daily, totaling 2,400 KRW.

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