Sub-Theme 1 | Early expressways in the 1960s and the 1970s to support the economic development plan
The Korean Civil War lasted for three years in the early 1950s and it caused devastating damage on all sections of Korea. In 1953, ninety-seven percent of roads were not paved and the GDP per capita was less than USD 100. Even though ten years passed after the truce of the War in the early 1960s, the economic situation as well road condition were not quite different. The first priority of the Korean government at that time was to revitalize the nation through establishing the export-oriented economy system. To pursue this national policy efficiently in medium- and long-terms, the government set up the first Five-Year Economic Development Plan (FYEDP) in 1962. The first FYEDP had achieved unexpectedly high economic growth rates. The growth rate was merely 3.5 percent in 1962, however, it increased to 9.1 percent in 1963 and it reached to 13.4 percent in 1966.
As a result, the demand on roads increased so rapidly. In particular, the road congestion between Seoul and Incheon port became serious. To reduce the congestion, it was necessary to build the first Seoul-Incheon expressway of 23.5km with four lanes in both directions. The construction cost was not high as it was the short distance. The high engineering technique was not required as there were no mountains or rivers in the corridor. Part of the construction cost could have been easily borrowed from the Asian Development Bank. The construction work began in March 1967 and completed in December 1968. It took only one year and nine months. at first, the first expressway was planned to be financed, constructed and operated by private domestic contractors. However, as the Korea Expressway Corporation (KEC) was newly established in February 1969, its operating right was sold and transferred to the KEC in March 1970.
Encouraged by the high economic growths during the period of the first FYEDP, i.e. from 1962 to 1966, the government set up the more optimistic second FYEDP in 1967. Its first priority was to pursue the export-oriented economy more actively. Several large-scale heavy and chemical industrial complexes would be developed in the south-east area near Busan and the Busan port would be largely expanded. Therefore, the second expressway to connect Seoul and Busan was necessary to facilitate the export-oriented economy. However, contrary to the Seoul-Incheon expressway, the Seoul-Busan expressway brought about a strong opposition on its feasibility not only from local experts but also from overseas institutions. Particularly, the International Bank of Reconstruction and Development concluded it was too early to build the second expressway, considering the current and future economic situation in Korea. It meant that most financing sources should have been procured from domestic funds.
The second Seoul-Busan expressway is 428km long with four lanes in both directions. The corridor has many mountains and rivers to be crossed so that the somewhat high engineering technique would be required, which had not been equipped by domestic contractors at that time. Above all, the estimated construction cost was KRW 33 billion, which was almost 10 times that of the Seoul-Incheon expressway. The cost actually increased to KRW 43 billion in the end. In spite of these oppositions and obstacles, the government decided to build it, as soon as possible.
[Overview and financing sources of the first two expressways]
|Car related tax & issued bonds
|Car related tax
Japan reparation claims fund
|Estimated cost (KRW billion)
||Estimated cost (KRW billion)
Considering the national budget in 1967 was around KRW 180 billion, the estimated cost of KRW 33 billion was a huge amount, almost one-fourth of the budget. The government decided to increase taxes related to cars. In particular, the gasoline tax was doubled from 100% of its manufactured price to 200%. From the car related tax revenue, 60 percent of the construction cost, i.e. KRW 20 billion, could be financed.
The government had exerted every effort to reduce the construction cost. The design criteria were set low in terms of the route alignment, median strip structure, minimum curve radius, etc. These have caused a lot of traffic accidents during its operation. So the design criteria have been largely changed when its number of lanes had been widened from four to six or eight lanes in the 1990s and 2000s. The construction work continued day and night. It was done completely by domestic contractors, but some military men were forced to work free. Even in the winter when the ground was frozen, fire was set after spreading straws and gasoline, or trucks were driven repetitively with a firing burner at the bottom. While one of the most difficult tunnels was constructed, it collapsed 13 times. 77 people were dead during the construction because the work should be done day and night and safety concern was ignored.
In the end, the long distance Seoul-Busan expressway of 428km was completed within two years and five months, which must have been a miracle in the transport infrastructure construction history. It was a high risk mega project. When it was first opened, the traffic demand was not high. However, it largely reduced the travel time between Seoul and Busan from 15 hours to 5 hours, which must have saved a lot of passenger and freight travel time and contributed to largely increasing the productivity of Korea’s export-driven industries. The continued high economic growth rate in the late 1960s and afterwards has induced a lot of traffic demand in the expressway. It could be argued that the high economic growth rate and Seoul-Busan expressway must have worked interactively as multipliers.
As the Seoul-Busan expressway has proved a great success with its completion, the government recognized it was necessary to build more expressways to boost the export-driven economy. Unlike the Seoul-Busan expressway, it has been rather easy for the government to construct more expressways in the 1970s. Particularly, it could have been possible to get more loans from various foreign institutions. As shown in Table 2, five more expressways of 815km were newly built in the early 1970s. About 20 to 72 percent of the construction cost was borrowed from the foreign capital.