A file photo of the Yongin EverLine service provided by a reader. (Yonhap)
SEOUL, Feb. 14 (Korea Bizwire) – An appellate court on Wednesday upheld parts of a damage lawsuit brought by residents of Yongin over a controversial light rail system that they argue has cost the city hundreds of millions of dollars in losses.
The Seoul High Court ruled the current mayor of Yongin, south of Seoul, could charge 21.46 billion won (US$16 million) in compensations from a former mayor and a state research institute over the transit system that has put the municipality into financial trouble due to a low usage rate.
The incumbent mayor is required to make a request for the payment within 60 days and file a damage lawsuit in case the payment is not made in time.
The court said former mayor Lee Jeong-moon is guilty of committing a “grave negligence” in concluding an agreement that is highly favorable to its developer, without conducting a feasibility study of demand forecast in 2004.
The court also found the Korea Transport Institute in charge of predicting demand for the transit and its researchers responsible for making an excessive demand forecast without using reasonable methods, thereby causing around 430 billion won in damages to the city.
Residents filed an administrative suit against them in 2013, saying the city should claim some 1.02 trillion won for the loss that the light rail business cost the city.
The Yongin EverLine, which connects Everland, the country’s largest theme park, to the Giheung station under the Suin-Bundang Line, opened to the public in 2013, nearly three years after its completion, due to a dispute with its Canadian developer over the issue of minimum revenue guarantee.
The city eventually lost in international arbitration, paying the developer some 850 billion won along with additional expenses.
The transit service suffered huge losses as the number of its users was far lower than predicted by the research agency.
Lower courts did not recognize the legality of the suit filed by residents, saying a request for an audit should predate the lawsuit, but the Supreme Court dismissed the case and sent it back to a lower court for reevaluation in 2020.
A lawyer representing the residents said it could take a long time for the city to receive compensation as the accused are expected to appeal the ruling.
It marks the first time that residents have won a compensation lawsuit against a private investment business led by a local government, since the introduction of such suits in 2005.
According to government data, 50 residents’ lawsuits had been filed as of the end of 2022, with seven cases currently under way.
(Yonhap)
