Phase 2 GTX and Metropolitan Transportation Plans, Key Issue: 'Securing Funding'

Among 134 Trillion Won, Private Sector Must Procure 75 Trillion
National Budget Limited to 30 Trillion, Private and Local Governments' Roles Essential

The biggest challenge in the metropolitan transportation investment plan, including the second phase of GTX announced by the government, is securing funding. The government plans to raise 75 trillion won, nearly half of the total 134 trillion won, from the private sector, but significant difficulties are expected during the investment attraction process.

On the 10th, the Construction Industry Research Institute explained in a trend briefing titled "The Meaning and Challenges of the Three Major Innovation Strategies in the Transportation Sector" that "Of the 134 trillion won allocated for metropolitan transportation investment, only 30 trillion won comes from the national budget, and since most plans require the roles of the private sector and local governments, it will be difficult to realize them in the near future."

Last month, the government announced at a public discussion themed "30-Minute Commute Era, Resolving Transportation Disparities" that it plans to invest intensively in metropolitan transportation and allocate 134 trillion won for projects such as railway and road underground construction.

The government plans to open the GTX A line section from Suseo to Dongtan in March and the section from Unjeong to Seoul Station within the year. The B line is targeted for opening in 2030, and the C line in 2028. New GTX D, E, and F lines will be established, with the first phase sections opening in 2035, and extensions of the A, B, and C lines will be pursued through negotiations on cost-sharing with local governments.

The plan also includes expanding railway underground construction projects. A comprehensive plan to newly build railways underground, which previously ran above ground, and to develop the space above railway sites and adjacent areas to cover construction costs, is scheduled to be established by March. Target lines will be selected by the end of 2025, considering project feasibility and balanced development.

The selection of target lines is expected to proceed by designating pilot zones starting with areas of high project feasibility. At a press briefing earlier this month, Minister of Land, Infrastructure and Transport Park Sang-woo explained regarding railway underground construction, "The law specifies development including railway tracks, stations, and nearby areas, so it will proceed as an urban development project led by local governments. The government will contribute national railway land as an in-kind investment, which is equivalent to providing cash funding. This allows the private sector to develop without land acquisition costs."

The plan also includes underground highway projects, with phased construction starting in 2026 on the Seoul Metropolitan Area’s First Ring Road, Gyeongbu, and Gyeongin Expressways. In other regions, projects will be identified focusing on metropolitan areas.

Continuous investment is necessary in infrastructure with high demand from residents such as roads, railways, and subways, but securing funding during the implementation process will be crucial to the success of the projects. Although the profitability of the second phase GTX project is a hurdle, the business environment is poor due to real estate project financing (PF) issues and a downturn in the real estate market.

Researcher Lee Seung-woo of the Construction Industry Research Institute said, "As announced, 75.2 trillion won of private funds are absolutely necessary for expanding metropolitan railways, but the second phase GTX project is evaluated as having low profitability, making investment difficult. The railway underground construction project is basically aimed at covering costs through development profits from the space above, so the financial burden is not large, but ultimately, smooth real estate development above ground is essential."

Expanding metropolitan transportation networks, restructuring railways, and undergrounding railways and roads are important strategies that change urban spatial structures. They can bring new changes beyond increasing infrastructure investment volume, such as development projects and housing market reorganization.

There are calls for institutional improvements to attract private investment to promote transportation innovation strategies. Researcher Lee added, "To effectively implement this transportation innovation strategy, it is necessary to normalize and revitalize private investment projects, which are currently in a serious stagnation, and to improve the construction finance PF system."

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