Full Text Uijeongbu Mayor Ahn Byung-yong Addresses Citizens on Light Rail Bankruptcy

The Seoul Rehabilitation Court decided on the 26th to declare bankruptcy for Uijeongbu Light Rail Corporation, the business operator of the Uijeongbu Light Rail.

Following this, Uijeongbu Mayor Ahn Byung-yong held a press briefing at 2 p.m. that day to announce his "Message to Citizens" and said, "We will do our utmost to ensure normal operation of the Uijeongbu Light Rail."

Below is the city's response and Mayor Ahn's full "Message to Citizens."

[City of Uijeongbu's Response]

First, when Uijeongbu Light Rail Corporation filed for bankruptcy on January 11, 2017, the City of Uijeongbu organized and operated a task force team. The task force took emergency preparedness measures to prevent any service suspension of the light rail, made its best efforts to respond legally to the business operator's bankruptcy filing, and established plans for facility inspection, acquisition methods, and financial resource procurement in preparation for safety assurance if bankruptcy were declared.

Second, we appealed to the court regarding the unfairness of the bankruptcy. The City of Uijeongbu appointed a law firm with expertise and experience in light rail consultation to serve as legal representative, aiming for the dismissal of the bankruptcy itself, and pursued effective legal response. We submitted opinion statements multiple times to the court regarding the unfairness of the bankruptcy, its ripple effects on other private investment projects, and public harm caused by light rail operational disruption. Related officials, including the mayor, personally attended court proceedings three times, actively expressing the opinion that the business operator's bankruptcy filing to avoid social responsibility goes against the public interest. Typically bankruptcy cases are decided within one to two months, but the delay of over four months is believed to be because the rehabilitation court did not judge solely from a financial perspective, but rather listened to the views of the City of Uijeongbu and gave serious consideration from a public interest standpoint.

Third, the court recommended additional negotiations. The rehabilitation court, considering the public interest nature of the Uijeongbu Light Rail, provided additional opportunities for the city and business operator to resolve the matter amicably before declaring bankruptcy. The City of Uijeongbu proposed annual support of 5 billion won and reasonable additional costs. In additional negotiations, we proposed annual support of 10.5 billion won over 10 years, including 5 billion won for operational shortfall and 5.5 billion won for light rail vehicle major maintenance. However, the business operator showed no intention to continue operations and rejected the city's proposal.

[Future Response Measures]

First, we will conduct close consultations with the bankruptcy trustee regarding operations. The City of Uijeongbu will discuss measures to ensure the light rail does not stop until it assumes operation after finalizing follow-up measures, and will convey the voices of approximately 40,000 citizens who use the light rail daily by emphasizing the public nature of the light rail to the bankruptcy trustee. If there are concerns about service suspension during negotiations, the city will directly enter into emergency operational contracts with the railroad operator to prevent service interruption.

Second, we will promptly pursue follow-up operational plans. We will inspect any facility defects and safety issues that may have occurred during the five years of light rail operation to ensure no negligence in user safety. For follow-up operational plans, based on analysis results and expert opinions reviewed thus far, we will promptly pursue either the city operating the light rail directly or selecting an alternative operator in a stable and efficient manner. Final reviews and professional institution studies are currently underway, and once results are available soon, we will immediately consult with the city council and proceed through public hearings and opinion gathering processes to determine the optimal plan.

Third, we will vigorously dispute the termination payment. The City of Uijeongbu will legally contest termination payment under the principle that termination payments cannot be established for termination under bankruptcy law rather than normal contractual termination. If business operators can terminate implementation agreements through bankruptcy and receive termination payments, numerous private investment projects will likely see indiscriminate bankruptcy filings in succession due to minor and temporary management difficulties. Furthermore, leaving a bad precedent where companies recover construction profits during the construction phase and investment principal through termination payments would create moral hazard in corporations. Therefore, the City of Uijeongbu will respond strongly by seeking financial damages from the bankruptcy trustee for damages caused by the business operator's bankruptcy.

[Message to Citizens]

I will spare no effort to ensure that light rail service interruption, which citizens worry about, never occurs, and to minimize the city's financial burden from bankruptcy.

Furthermore, in determining future light rail operational plans, we will pursue stable measures to prevent such confusion from recurring.

We will continue making efforts for government support.

The central government developed the private investment system and was deeply involved in the process of promoting the Uijeongbu Light Rail project, and therefore cannot be free from responsibility for the light rail's dysfunction.

Regional members of the National Assembly and city and provincial council members have worked hard on preparing government support measures and amending relevant laws.

And as a result of these efforts, a legal amendment opening the door to government support has been made.

However, only administrative support is stipulated, and the legal basis for financial support remains inadequate.

The newly launched government recently made a pledge to normalize the Uijeongbu Light Rail, which allows us to have hope and expectations.

The City of Uijeongbu will continue to work with local leaders to ensure that legal grounds for government financial support are established.

Furthermore, we will cooperate with local governments such as Yongin and Gimhae cities that are experiencing financial difficulties due to light rail issues, and respond jointly.

Now the light rail is no longer a white elephant but will transform into a source of pride for the City of Uijeongbu and a new engine for growth.

The light rail will run on the blueprint of development and growth that will unfold in Uijeongbu going forward.

Beloved 440,000 citizens of Uijeongbu! The City of Uijeongbu will prepare follow-up measures with the sole determination to provide the highest quality transportation service to citizens. We will always prioritize citizens and respond with genuine sincerity.

All information throughout this process will be transparently disclosed through media and various channels.

We will consult closely with the city council and local leaders, pool our wisdom, and resolve this together.

Please watch over the new beginning of the Uijeongbu Light Rail. And please join us.

Approximately 1,000 civil servants of the City of Uijeongbu will do their utmost with one heart and one mind for the stabilization of the light rail.