Nature of the asset
The Soojungsan Tunnel is a 2.3 km, dual two-lane toll tunnel, connecting the Busan central business district and Busan port to the Baekyang Tunnel and onward to the northern and western suburbs of Busan as well as the Kimhae International Airport. The tunnel serves as an important connection to Busan’s port area, which is the fifth largest container port in the world in terms of containers shipped. Construction of the tunnel began in May 1997 and was completed in December 2001.
Nature of the investment
MKIF has invested in Soojungsan Investment Co., Ltd. (SICL), the concessionaire of Soojungsan Tunnel, in the form of equity, senior loans and subordinated loans. MKIF is a 100.0% shareholder of SICL, and committed to provide senior loans of KRW70.2 billion and subordinated loan of KRW19.3 billion. MKIF’s total investment in SICL is KRW136.6 billion.
Concession agreement
| Government authority: | Busan City Government |
|---|---|
| Concession term: | 25 years (18 years remaining) |
| Guarantee duration: | 25 years |
| Concession term commencement: | April 2002 |
| Minimum Guarantee*: | 90% of annual CA projected revenue |
| Revenue Cap: | 110% of annual CA projected revenue |
* In toll revenue below 90%, Busan City Government is obliged to compensate 91.5% of the shortfall amount
Facilities
| Length: | 2.3 km |
|---|---|
| Capacity: | 4 lanes in both directions |
| Toll rate: | KRW 800 - Small vehicles |
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