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ENFORCEMENT DECREE OF THE RAILROAD CONSTRUCTION ACT

Ministry of Land, Transport and Maritime Affairs (Arterial Railroad Section) Tel. No: 02-2110-8876

Article 1 (Purpose)

The purpose of this Decree is to define the matters delegated by the Railroad Construction Act and matters necessary to implement such matters. [Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 2 (Railroad Facility)

The term "facility determined by Presidential Decree" in Article 2, Subsection 6, Item G of the Railroad Construction Act (hereafter referred to as the "the Act") refers to a facility which falls under any of the following subparagraphs.

1. A facility (limited to a facility installed during a construction period) for processing, assembling, transporting, or storing construction materials for construction purpose necessary for Railroad Construction Project in the field.

2. A facility necessary for installation and operation of access roads, parking lots, storage yards, soil and stone gathering areas, and sand storage area for construction necessary for the Railroad Construction Project.

3. A facility for storing and transporting railroad train parts.

4. A facility for maintaining, checking and repairing construction equipment and inspection measuring tools.

5. Other facilities for conducting the Railroad Construction Project, such as construction safety-related facility and information facility, etc. [Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 3 (Establishment of a Plan of Building National Railroad Network) A "case of changing minor matters determined by Presidential Decree" in the proviso of Article 4, Section of the Act refers to a case which falls under any of the following subsections.

1. In the event of changing the total project size of a plan for building a National Railroad Network (hereafter referred to as the "Railroad Network Plan") under Article 4, Section 1 of the Act within the scope of 10/100.

2. In the event of changing the total investment amount required by the project determined by the Railroad Network Plan within the scope of 10/100.

3. In the event of changing the project period determined by the Railroad Network Plan within a three year period.

[Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 4 (Deliberation on Matters Regarding Railroad Construction) "Other matters regarding railroad construction" in Article 6, Subsection 3 of the Act refers to matters that apply to any of the following subsections.

1. Matters regarding a special technology or a special device under Article 18, Section , Subsection 1 of the Act.

2. Matters regarding the structure and type of High-Speed Railroad Facility under Article 18, Section , Subsection 2 of the Act.

3. Matters that the Minister judges to be important among matters that fall under any of the following subparagraphs:

(a) matters that are related with the establishment of a Railroad Construction Basic Plan by Project (hereafter referred to as the "Railroad Construction Basic Plan") under Article 7 of the Act and the criteria for constructing railroads under Article 19 of the Act.

(b) matters regarding different interests in connection with railroad construction. [Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 5 Deleted Article 6 Deleted Article 7 Deleted Article 8 Deleted Article 9 Deleted Article 10 Deleted Article 11 (Exceptions of the Railroad Construction Basic Plan) A "railroad Construction Project determined by Presidential Decree, such as a small-scale Railroad Construction Project" in the proviso of Article 7, Section of the Act refers to a project whose gross project expense is less than 50 billion won and which the Minister deems it unnecessary to establish a Railroad Construction Basic Plan due to the nature of the project.

[Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 12 (Matters to Be Included in the Railroad Construction Basic Plan) "Other matters determined by Presidential Decree" in Article 7, Section , Subsection 9 of the Act refers to matters that fall under any of the following subsections.

1. A topographical map indicating a scheduled railroad route to be constructed.

2. A matter on a transportation linked with other transportation means.

3. Type and the required number of compartments and a plan for securing the railroad train to be entered into the scheduled construction route.

4. A plan for outlining the train operation considering the expected demand for railroad transportation.

In the event of establishing a Railroad Construction Basic Plan under Article 7, Section of the Act, the Minister shall publicly announce any of the following subsections in the public gazette.

1. Name of the Project.

2. Purpose of the Project.

3. Name and address of the operator

4. Content of the construction

5. Construction budget

6. Construction period

7. Starting and finishing points of the construction route

8. Main stopovers and stations (referring to indications of administrative district, such as Seoul Metropolitan City, Other Metropolitan City, City and Gun) and the location of Railroad Train Base.

A "case of changing the minor matters determined by Presidential Decree" in the proviso of Article 7, Section refers to a case which falls under any of the following subsections and which is not accompanied with a change in the location of the starting and finishing points, main stopovers, stations or Railroad Train Base.

1. In the event of changing a construction route, project area or construction budget within the scope of 10/100.

2. In the event of changing the location and structure of the Railroad Facility due to topography or geological conditions.

[Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 13 (Designation of Operator of Railroad Construction Projects) In the event that a public institution, (hereafter referred to as the "Public Institution") under Article 4 of the Act on Operation of Public Institutions according to Article 8, Section of the Act, conducts a Railroad Construction Project, in whole or in part, the Public Institution shall submit to the Minister an application for the designation of an operator of the Railroad Construction Project as provided by the Ordinance of the Ministry of Land, Transport and Maritime Affairs along with documentation falling under any of the following subsections and drawings.

1. A business (or project) plan

2. A funding plan

3. A topographic map indicating a scheduled railroad construction route In addition to the matters determined in Section , matters necessary for designating an operator shall be determined by Ordinance of the Ministry of Land, Transport and Maritime Affairs.

[Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 14 (Approval of Implementation Plan for Railroad Construction Projects) "Other matters determined by Presidential Decree" under the first part of Article 9, Section of the Act refers to any of the following subsections.

1. A location map indicating the Project site.

2. Location, lot number, land category and area of the land, object or right to be expropriated or used (hereafter referred to as the "Land, Etc"), specification of ownership and any right other than ownership and the name and address of the owner and rightful person.

3. Design drawings, such as floor plan, sectional plan and construction instruction.

4. Construction period

5. A financial plan showing an annual investment plan, funding procurement plan and an annual earnings on investment plan, and documentation for evidence of such thereto (in the case that a Public Institution is an operator, limited to Implementation Plan for High-Speed Railroad Construction Project).

6. A purchase and compensation plan of the Land, Etc in the Project site and a countermeasure for relocating residents.

7. Analysis on and measures for improving effects on traffic and results of consulting with the head of the concerned administrative agency on environment influence evaluation.

8. Result of investigating cultural assets

9. Countermeasures for reducing earthquake damages

10. When preparing an Implementation Plan for the Railroad Construction Project (hereafter referred to as the "Implementation Plan") under the latter part of Article 9, Section of the Act by section or by facility, its content.

11. In the event of containing matters which must pass deliberation of a Railroad Industry Committee (hereafter referred to as the "Committee") under Article 6 of the Railroad Industry Development Fundamental Act according to Article 9, Section and Article 18, Section , Subsections 1and 2 of the Act, its deliberation content.

12. In the event of being legally fictitious authorization and permit, etc pursuant to any of the subsections under Article 11, Section , the Act, its content.

13. Documents necessary for consulting with the head of a concerned administrative agency under Article 11, Section of the Act.

14. In the event of installing Alternative Public Facility, Etc substituting for an existing Public Facility, Etc under Article 15, Section of the Act, a plan for transferring and demolishing the existing Public Facility, Etc and a plan for installing the Alternative Public Facility, Etc.

15. In the event of being the land and facility not reverted to the state according to proviso of Article 17, Section of the Act, a plan for disposing the land and facility.

16. In the event of a business entitled to deliberation of the Design Advisory Committee under Article 21, Section , the Enforcement Decree of the Construction Technology Management Act, documents necessary for deliberating the design.

The Minister who has received an Implementation Plan according to the first part of Article 9, Section of the Act shall confirm the cadastral map in the Project site via joint use of the administrative information under Article 21, Section of the e-Government Act.

In the event of approving an Implementation Plan in accordance with Article 9, Section of the Act, the Minister shall publicly announce the following subsections in the official gazette.

1. Name of the Project;

2. Summary of the Project;

3. Implementation period of the Project (including estimated dates of commencement and completion of the Project);

4. Name and address of the operator (in the event of a legal person, name and address of the legal person and its representative);

5. Location, lot number, land category, and area of the land, object or right to be expropriated or used, specification of ownership and any right other than ownership and the name and address of the owner and the rightful person; and

6. Each matter of Subsections of Article 25, Section of the Enforcement Decree of the Act on Planning and Use of National Territory. Head of the local government concerned who has received copies of the documents related to the Implementation Plan under Article 9, Sections and of the Act shall make arrangements so that any interest parties can read the copies for not less than 14 days.

"Matters as determined by Presidential Decree" in the first part of Article 9, Section of the Act refer to matters which do not pertain to any of the following Subsections.

1. Change of route length or area of the Project within the scope of 10/100 (limited to a case in which the changes of starting point and finishing point and main stopovers are not accompanied).

2. Change of Project budget within the scope of 10/100

3. Change of the Project implementation period within the range of one year (limited to the case in which it does not exceed the construction period under the Railroad Construction Basic Plan)

4. Change of station facilities within the scope of 10/100 (limited to the case in which the changed area is less than 1,000 square meters)

5. Change of location and structures of equipments and facilities (limited to the case in which the change of Project budget due to the change of location and structures of equipments and facilities does not exceed 10/100 of gross project expense). In the event that approval of the Implementation Plan loses its validity under Article 9, Section of the Act, the Minister shall notify the operator and head of the relevant administrative organizations of the facts and publicly announce the facts (including publication on the internet).

[Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 15 (Entrust of Land Purchase Business)

When intending to entrust land purchase affairs, indemnity affairs and relocation affairs, etc. under Article 14 of the Act, the operator, provided that it is not the local government, shall have consultation in advance with the head of local government or head of public organizations regarding the contents and conditions of such entrustment.

In the event of entrusting land purchase affairs, indemnity affairs and relocation affairs, etc. under Article 14, Section of the Act, the rate of entrustment fees to be paid by the operator, provided that it is not the local government, shall be subject to the standard for the rate of entrustment fees under Article 43, Section of the Enforcement Decree of the Act on the acquisition of Land for the public undertakings and compensation.

[Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 16 (Installation of Alternative Public Facilities, Etc.) "Public facilities, military facilities or public structures determined by Presidential Decree" in Article 15, Section of the Act refer to any facilities of the following Subsections.

1. Public facilities under Article 2, Subsection 13 of the Act on Planning and Use of National Territory

2. Defense and military facilities under Article 2, Section 1 of the Act on National Defense and Military Installations Projects

3. Buildings and accessory facilities of the State or local government

4. Other facilities similar to those of Subsection1 through3 and as determined by Ordinance of the Ministry of Land, Transport and Maritime Affairs [Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 17 (Report of Construction Completion)

When intending to obtain confirmation of construction completion under Article 16, Section of the Act, the operator shall submit a construction completion report as determined by Ordinance of the Ministry of Land, Transport and Maritime Affairs attached to documents falling under any of the following Subsections to the Minister.

1. Completion statements;

2. Documents regarding the confirmation of construction completion by the relevant administrative organization;

3. Statements and relevant drawings in respect to the Public Facility to be reverted, transferred or conceded in accordance with Article 15, Section and Article 17, Section of the Act; and

4. Other documents as prescribed by Ordinance of the Ministry of Land, Transport and Maritime Affairs.

In the event of being deemed that the construction has been completed in accordance with the approved contents under Article 16, Section of the Act, the Minister shall publicly announce the following subsections in the official gazette.

1. Name of the Project

2. Name and address of the Undertaker

3. Purpose of the Project

4. Location and area of the Project site

5. Content of the Project

6. Completion date of the Project

7. Matters in respect to the decision of a City Management Plan under Article 11, Section , Subsection 6.

8. Documents and the relevant drawings in respect to the Public Facility to be reverted, transferred or conceded in accordance with Article 15, Section and Article 17, Section of the Act.

[Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 18 (Reverting Land Facilities)

"The land and facility determined by Presidential Decree" in the proviso of Article 17, Section of the Act refers to the land and facility falling under any of the following subsections which have been reflected in the Implementation Plan.

1. The land and facility which are not directly used in operating railroads. 2.The land and facility which are formulated or installed by the Korea Railroad Corporation established pursuant to the Korea Railroad Corporation Act. In order to use or benefit from the Railroad Facility reverted to the state according to Article 17, Section of the Act for nothing in return, an operator shall draft a business plan including the purpose of the Project, the Facility to be used and benefitted from, as well as the period of using and benefitting from the Facility, and submit the business plan to the Minister.

[Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 19 (Calculation of Gross Project Expense) The gross project expense under Article 17, Section shall be the sum of the expenses calculated according to the criteria for any of the following subsections based on the date of confirmation on completion of the Railroad Construction Project.

1. Investigation expense: An expense which is not included in the net construction expense, such as land survey expense or other investigation expense for conducting the Railroad Construction Project, which shall be in conformity with the criteria for payment of engineering businesses under Article 10 of the Engineering Technology Promotion Act. Provided, that the land survey expense shall be in conformity with the criteria for payment of land survey services under Article 53 of the Land Survey Act.

2. Design expense: refers to expenses required for designing in order to conduct the Railroad Construction Project, which shall be in conformity with the criteria for payment of engineering businesses under Article 10 of the Engineering Technology Promotion Act, or the scope of certified architects' affairs and criteria for payment thereof under Article 19-3 of the Certified Architect Act.

3. Construction expense: refers to the sum of material costs, labor costs, expenses and administrative expenses under Article 9 of the Enforcement Decree of the Act on Contract to Which the State is a Party.

4. Compensation expense: refers to a land purchase expense paid for conducting Railroad Construction Project (including buildings and standing tree purchase expenses), a migration measure expense and a compensation expense for rights, such as the right of trade, or goodwill, fishing rights, mining rights, etc.

5. Incidental expense: includes, but not limited to, an environment impact evaluation expense, traffic impact analysis expense, improvement measure expenses and engineering supervision expenses.

6. Construction interest: refers to the interest for the business expenses mentioned in Subsections 1 through 5.

7. Taxes and public imposts: refers to all kinds of taxes in respect to implementation, completion of the construction and ownership transfer, such as acquisition tax, registration tax, value added tax, public charges and other dues pursuant to the law.

8. Profit: refers to the amount equivalent to 15% of the expenses mentioned in Subsections 1 through 5.

The period of using or benefiting from the Facility free of charge under Article 17, Section of the Act shall be until the period in which the expense for using the same Facility or the revenue thereof reaches the gross project expense calculated according to Section .

[Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 20 (Exception for Separating and Ordering the Construction) The "case determined by Presidential Decree" in Article 18, Section of the Act refers to a case falling under any of the following subsections.

1. In the event that the construction uses special technologies, such as patented process, and thus separate order thereof makes the division of responsibility vague or makes it impossible to complete the objective.

2. In the event that the construction is a recovery construction due to force majeure or a natural disaster requiring urgent order, making separate orders difficult.

3. In the event that the construction is related with national defense or national security and thus separate order thereof is not feasible for the sake of confidentiality.

4. In the event that the construction is conducted in a turnkey basis under Article 79, Section , Subsection 5 of the Enforcement Decree of the Act on the Contract to which the State is a Party and thus separate order thereof is difficult. [Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 21 (Principle of Expense Burden)

Sharing of the expenses for constructing the High-Speed Railroad under Article 20, Section between the state and an operator shall be in accordance with a ratio determined by the Committee

[Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 22 (Ratio of Causer's Burden of Expense)

Where any person (hereafter referred to as the "Causer") other than the state who requests to conduct Railroad Construction Project under Article 21, Section of the Act bears the whole or part of the expenses of the Railroad Construction Project, the ratio for being responsible for the expenses shall be subject to any of the following subsections.

1. In the event of moving and installing the railroad route being operated at the request of a Causer: the entire expense for moving and installing the railroad route shall be borne by the Causer.

2. In the event of constructing a Railroad Facility in the ground of the railroad route (referring to a railroad route including the railroad route after the Railroad Construction Fundamental Plan has been publicly announced under Article 7, Subsection of the Act, and hereinafter the same shall apply to Subsection 3) being newly installed at the request of a Causer: the entire expense additionally required after comparing with the expense for constructing the Railroad Facility in the economically optimal site shall be borne by the Causer.

3. In the event of constructing a station facility in the railroad route being newly installed at the request of a Causer: 50/100 of the construction expense not exceeding the income after comparing the construction expense for the station facility with income thereof, calculated pursuant to the guidelines for Investment Evaluation, Article 10 of the Traffic System Efficiency Act shall be borne by the state. Provided that the whole expense for an access road to the station buildings shall be borne by the Causer.

4. In the event of constructing, expanding or rebuilding a station facility in the existing railroad route at the request of a Causer: the entire expense for constructing, expanding or rebuilding the station facility (including expenses for installing an access road to the station building) shall be borne by the Causer. The Railroad Construction Project under Section , Subsections 3 and 4 may be conducted only when its economic efficiency is recognized after assessing its feasibility in accordance with the guidelines for Investment Evaluation of Article 10 of the Traffic System Efficiency Act.

[Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 23 (Scope of Station Economic Area Development Zone) The Station Economic Area Development Zone, which the Minister, the mayor of Seoul Metropolitan City, a mayor of a Metropolitan city or a Do Governor are able to designate, shall be the railroad route and station's neighboring area (in the event of installing a railroad newly, referring to the railroad route and station's neighboring area fixed in accordance with an Implementation Plan) and which an operator for the Station Economic Area Development Project under Article 23, Section of the Act has obtained authorization and permit, etc in respect to the Station Economic Area Development Project from the head of the concerned central administrative agency or a head of the local government in accordance with the Urban Development Act or Housing Site Development Promotion Act.

[Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 24 (Period of Occupation Permit, Etc)

In connection with the occupation permit under Article 23.2, Section , the provisions of Articles 13 through 16 of the Enforcement Decree of Railroad Project Act shall apply mutatis mutandis.

[Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Article 25 (Supervision)

In the event of having made a disposition or order in accordance with Article 25, Section of the Act, the Minister shall publicly announce the following subsections in the gazette.

1. Name of the Project

2. Name and address of the operator (in the event of a corporation, the name and address of the corporation and the name and address of the representative of the corporation)

3. Location and area of the Project site

4. The content and reason of the disposition or order [Wholly Amended by Enforcement Decree No. 21549, Jun. 19, 2009] Agenda Article 1(Enforcement Date)

This Decree shall enter into force from Jun. 26, 2009. Articles 2 (Case of Application Regarding the Burden of Expense by the Railroad Construction Project's Causer)

The amended provision of Article 22, Section shall be applied from the first Causer who requests an implementation of the Railroad Construction Project after enforcement of this Decree.

Article 3(Transitional Measure Regarding the Reversion of the Land and Facility Being Formulated or Installed)

In connection with the reversion of the land and facility which have been reflected in an Implementation Plan for Railroad Construction Project at the time of the enforcement of this Decree and are being formulated or installed by Korea Railroad Corporation established in accordance with the Korea Railroad Corporation Act, the amended provision of Article 18, Section shall apply.