"'Cheaper Direct-Run Rest Stops,' We Thought... 'Pay 700 Million Won and We'll Hand It Over and Leave,' Operators Fume; Not This Year"

"'Low-Cost, Directly Operated Rest Areas' Unlikely to Open This Year"
Ministry of Land to Lower Fees Through Direct Contracts with Rest Area Operators
Korea Expressway Corp. Initially Promised "Tender in July, Pilot Operation by Year-End"
No Legal Basis or Criteria for Acquiring Assets at Existing Rest Areas
Clear Differences Between the Corporation and Operators Over Acquisition Prices

The government decided to introduce a direct-operation system to lower the fees charged to businesses at highway rest areas, but it has failed to establish even the criteria for acquiring assets at existing rest areas. The government had initially pledged to select several rest areas for a pilot program by the end of the year, but now expects the program to begin no earlier than February 2027 because consultations have not gone smoothly.

According to materials submitted by Korea Expressway Corporation to Kang Dae-sik, a People Power Party lawmaker on the National Assembly’s Land, Infrastructure and Transport Committee, the corporation is conducting asset assessments to acquire facilities, equipment and other items used by former operators whose contracts have expired or been terminated, in order to establish rest areas operated under direct contracts. The corporation plans to objectively assess the value of the assets and compensate the operators.

In July, the government decided to introduce the direct-operation model on a pilot basis by the end of the year at a total of eight rest areas: five existing sites—Yeoju (Incheon-bound), Daecheon (both directions), Gunwi (Busan-bound) and Jangyu (Busan-bound)—and three new sites, including Hapcheonho (both directions) and Wolchulsan. The problem is that no criteria have been established for acquiring assets such as facilities and equipment used by existing operators, nor has a compensation plan been drawn up. The operators are unlikely to vacate the premises, and may take legal action, as the two sides have failed to narrow their differences over the acquisition price.

On the 15th, as COVID-19 continued to spread rapidly, particularly in the Seoul metropolitan area, people ate while keeping their distance at Yongin Service Area on the Incheon-bound Yeongdong Expressway in Yongin, Gyeonggi Province. Photo by Moon Honam.

Under current lease agreements for rest area facilities, when a contract expires or is terminated early, the existing operator must remove its property. Facilities altered without the corporation’s approval must, in principle, be restored to their original condition. In practice, however, it is common for the outgoing and incoming operators to negotiate a transfer of assets. In September, Korea Expressway Corporation therefore requested a preliminary consultation with the Board of Audit and Inspection on whether it could acquire the existing facilities. The result is expected in October.

The corporation is also considering the possibility that existing operators may refuse to vacate the premises, as significant differences over the acquisition price are likely. Korea Expressway Corporation told Kang’s office, “Some operators may refuse to leave while demanding payments, such as goodwill fees, for which there is no confirmed contractual basis, in addition to the objectively assessed value of their assets. We will make every effort to resolve the matter amicably through active consultations.”

Industry sources estimate that, when the amounts for transferring facilities and equipment are high, the cost could reach around 700 million won at large rest areas and about 300 million won at smaller ones. Some large rest areas are reportedly demanding around 1 billion won. The government and Korea Expressway Corporation have been slow to establish follow-up procedures, and operators whose contracts have already expired or been terminated are reportedly continuing to run their businesses. Korea Expressway Corporation’s internal rules reportedly do not even set a clear deadline for holding a new tender within a certain period after a contract ends.

As the government plans to expand the direct-contract model, similar problems are likely to arise again. “The government pledged to launch a pilot program by the end of the year, but it has failed to properly resolve issues with existing operators, including asset acquisition and the surrender of premises, and has not even issued a tender notice,” Kang said. “Rather than focusing solely on moving quickly because of a presidential directive, it is important to first establish proper systems and procedures that can actually work on the ground.”

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