The Ulsan Urban Railway Line 1 tram project, which was under comprehensive review following the launch of the 9th elected government, is set to resume.
Ulsan City has decided to restart the halted vehicle manufacturing and design and construction processes after failing to find a legal way to suspend or terminate existing contracts without incurring financial liabilities.
However, this decision does not confirm the final push for the tram project. Ulsan City plans to preserve the remaining pause periods in the contracts without exhausting them, continuing to assess the project's pros and cons and the possibility of halting it before the main construction begins.
As a result, this resumption is interpreted as a conditional restart aimed at securing additional review time while avoiding legal and financial burdens, rather than a complete normalization of the tram project.
On July 31, Ulsan City held a meeting at City Hall, chaired by Mayor Kim Sang-wook, to discuss the future direction of the tram project.
The city had previously explored options to suspend or terminate the project through multiple legal consultations, inquiries to central government agencies, and discussions with contract partners. However, it concluded that unilaterally terminating a legally binding contract would likely lead to financial liabilities, including compensation for damages.
Both Hyundai Rotem and Hanshin Construction reportedly communicated to Ulsan City that they could not accept a contract suspension or modification without compensation. Previous legal advice also indicated that it would be difficult to terminate the contract legally without incurring liability for damages.
The tram project has already contracted with the Hanshin Construction consortium for design and construction through a bundled bidding process, and a purchase contract for nine hydrogen-powered tram vehicles has been signed with Hyundai Rotem. Terminating the existing contracts could lead to disputes over incurred costs, losses, and future profits for the contracting parties.
However, it is not certain that criminal liability for breach of duty or abuse of authority would immediately arise. The determination of criminal responsibility would depend on specific facts, including the circumstances of the contract termination, authority, financial damages, and intent. The primary issue for Ulsan City is whether an administrative agency can unilaterally suspend a contract without clear legal grounds.
Ulsan City has decided to resume the project without using the entire remaining period for contract suspension.
The remaining pause periods are reportedly 27 days for Hyundai Rotem and 40 days for Hanshin Construction. Considering the need to suspend both contracts simultaneously, the practical period available for Ulsan City is approximately 27 days based on the Hyundai Rotem contract.
Mayor Kim Sang-wook is said to have concluded that it is more reasonable to preserve the remaining period for potential future significant changes or legal grounds for suspension rather than exhausting it without a clear plan.
While the project procedures are moving forward again, Ulsan City's review is not complete. The city plans to reassess the potential for increased project costs, conditions for national funding support, traffic congestion during construction, operational deficits after opening, and the efficiency of the route before the main construction begins.
The tram project was initially planned with a total budget of 381.4 billion won to connect 10.85 kilometers from Taehwagang Station to Gongup Tower, with an expected opening by the end of 2029. Ulsan City had previously announced plans to enter the main construction phase after completing detailed design, various impact assessments, and obtaining approval from the Ministry of Land, Infrastructure and Transport.
If project costs significantly exceed initial estimates, a feasibility reassessment and review of the project plan may be necessary, which could affect the availability of national funding. Mayor Kim has also expressed concerns about the possibility of project suspension if issues arise with national funding after construction begins.
The debate surrounding the tram project has evolved into a question of its economic viability and the extent of administrative responsibility that should be accepted.
Former Ulsan Mayor Park Maeng-woo has argued that the tram is unsuitable for Ulsan's population size and road conditions, and it could lead to traffic congestion and long-term operational deficits during construction. He has called for the project to be scrapped.
In a press conference on July 30, Park stated, "Once installed, even a flawed project becomes an irreversible burden," urging for the tram project to be halted. He highlighted issues such as traffic congestion during construction, fewer expected users, and ongoing operational deficits as major concerns.
In contrast, Mayor Kim maintains that while the project's issues should be continuously verified, it is not possible to halt the project in a manner that exceeds legal authority and contractual obligations. He stated that if a legal way to suspend the project is identified, it will be considered, but in reality, if the project continues, administrative efforts should focus on minimizing cost increases and citizen traffic inconveniences.
Both figures share a negative view of the tram's necessity, yet they differ in their assessment of the legal and financial risks that can be accepted during the suspension process.
While the Ulsan tram project has resumed, the controversy is far from over. The inability to find a legal way to suspend the contract does not validate the tram's economic viability or traffic benefits.
Conversely, halting a legally binding contract without legal grounds simply due to doubts about the project's economic viability cannot be considered responsible administration.
Ultimately, what Ulsan City must do before the main construction is not to repeat political slogans of "halt or proceed," but to present concrete figures to citizens regarding total project costs, the likelihood of securing national funding, traffic measures during construction, demand forecasts, annual operating costs, and the scale of deficit coverage.
Whether this resumption decision will merely serve as a time-saving measure to avoid contractual losses or lead to a verification process that reduces project risks and engages public judgment will depend on future administrative actions.
The tram has begun to move again, but the final decision that Ulsan City must make is still pending.
* This article has been translated by AI.
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