This study proposes improvements to Seoul’s investment review system in three areas: total project cost regulations, benefit estimation for urban railway projects, and review operations.
The first issue concerns the inclusion of public property value in total project cost since the 2016 manual revision. A review of 34 feasibility study projects and 674 investment review projects conducted since 2020 found that public property value was included in 17 (50%) and 175 (26%) cases, respectively. In most of these cases, 65% and 79%, the entire compensation cost consisted of public property value rather than actual expenditure. This artificially inflates total project cost, lowering the threshold at which the central government assumes review authority and expanding central involvement at the expense of local fiscal autonomy. Under the national system, state-owned property is excluded from total project cost, yet the local system includes it. The study proposes excluding public property value and raising review thresholds to reflect rising land prices and construction costs.
The second issue is passenger comfort benefits for urban railway projects. Current guidelines limit comfort benefits to improvements of existing lines, yet in Seoul’s dense railway network, new lines reduce congestion on surrounding existing lines through passenger redistribution. A survey of 4,000 metropolitan railway users (October–November 2024) yielded unit benefits of 667 won per person-hour for improvement from “crowded” to “caution” and 693 won for improvement to “normal or comfortable.” The study recommends applying these values to peak-hour demand (concentration ratio 34.8%) in sections where congestion improves after project implementation.
The third issue is review operations. The study proposes sharing the Center’s review reports with committee members before meetings, reducing annual review rounds from eight to three or four, reintroducing the two-stage review system, and clarifying exemption criteria. At the Center level, reviews should be divided into general reviews without economic analysis and in-depth reviews with economic analysis, supported by an internal screening process.
These reforms are expected to protect local fiscal autonomy, capture actual project benefits more accurately, and improve the efficiency and expertise of Seoul’s investment review system. Future research should validate the comfort benefit unit values through case studies and evaluate the operational improvements through pilot implementation.