The Macquarie Korea Infrastructure Fund (MKIF) has announced that Busan City appealed to the Busan Appellate Court against the ruling by the Busan District Court on the administrative order to its two tunnel concessionaires dated 10 October 2014.
MKIF said that the concessionaires will respond to the appeal.
On October 10th, the Busan District Court ruled in favour of Soojungsan Investment Co., Ltd. and Baekyang Tunnel Ltd., the concessionaires of Soojungsan Tunnel (SICL) and Baekyang Tunnel (BYTL) respectively, regarding Busan City's administrative order to the concessionaires for the reinstatement of the original capital structure at the time of the signing of the respective concession agreements.
As previously disclosed by MKIF on 27 August 2013, the concessionaires filled a lawsuit with the Busan District Court in order to nullify the order.
The Soojungsan Tunnel is a 2.3 km, dual two-lane tolled tunnel located in Busan, serving as an important connection through Busan central business district, Busan's port area and the northern and western residential areas including Gimhae International Airport. Construction of Soojungsan Tunnel commenced in May 1997 and was completed in December 2001.
The Baekyang Tunnel is a 2.3 km, dual two-lane toll tunnel that runs underneath Baekyang Mountain in Busan Metropolitan City, providing a link between the Busan central business district and Busan port and the northern and western residential areas as well as Kimhae International Airport. The tunnel forms part of the route from Busan port to the main expressways leading north and west of Busan such as the Namhae Expressway and the New Daegu-Busan Expressway. Construction of the Baekyang Tunnel began in July 1993 and was completed in January 1998. The tunnel has been in operation since January 2000.
Both contracts are 25-year concessions. MKIF said they represent a 6% of its portfolioon committed amount basis.