This study proposes a framework for financing, sizing, and operating the Gyeonggi-do Railway Undergrounding Project Fund established under provincial ordinance. Under the ｢Special Act on Railway Undergrounding and Integrated Development of Railroad Sites｣, undergrounding costs are to be financed by railway-site development profits. However, if feasibility weakens or revenues are delayed, project risks may be transferred to Gyeonggi-do as the upper-level planning authority. Because the Act allows local governments to provide subsidies or loans, provincial fiscal exposure is a real concern.
The study examines funding sources beyond general-account transfers, including public contributions, development charges, and metropolitan transport facility charges, by assessing legal validity, administrative feasibility, and temporal alignment with funding demand. It also analyzes project-operator costs based on the Ansan Line pilot project, focusing on public external costs such as resident relocation, mitigation of noise･vibration･dust impacts, and temporary traffic measures, and reviews domestic and international cases of local funds and infrastructure financing.
The findings indicate that the Fund should not compensate for overall project deficits or operator financing costs, but should function as a fiscal safety net for public external costs — construction delays, civil complaints, relocation, environmental impacts, and traffic disruption — in projects included in the national comprehensive plan. Based on the Ansan Line case, the funding need is approximately KRW 30–50 billion, about 20–30 percent of an individual project's contingency allowance. Liquidity support, by contrast, would require around KRW 200 billion and would shift a substantial share of the operator's financing costs to the province; this approach therefore warrants caution.
General-account transfers should serve as the primary source, supplemented selectively by metropolitan transport facility charges. Public contributions and development charges, for which Gyeonggi-do is not the collecting authority, are better handled through an advance-investment, post-settlement structure with municipalities. Accumulating approximately KRW 10 billion annually after a project enters the comprehensive plan would build a fund of comparable scale before construction begins. The ordinance should clarify that the Fund covers external costs across the integrated undergrounding and site-development process, with linked revenue provisions, inter-agency consultation mechanisms, and detailed operational standards. Given the metropolitan and national character of railway undergrounding and local fiscal constraints, institutionalizing national financial support also warrants consideration.