Ulsan tram project lurches forward and backward at once

Ulsan's most pressing civic issue — the construction of a tram line through the city — is running on a contradictory track, with the project simultaneously moving forward and being targeted for suspension.

The Ulsan Urban Railway Line 1 tram project, a government-supported public transit initiative in development since the sixth elected city administration, was reclassified as a project under review when the ninth administration took office, before recently being steered back toward resumption. Yet the city has also pledged to seek a way to suspend the project before main construction begins next February, in order to hold a public deliberation asking residents whether to proceed — meaning the debate over the tram is far from settled.

Mayor Kim Sang-uk convened an emergency response meeting with department heads on Friday at the City Hall situation room on the seventh floor, announcing the project would continue on the grounds that legal counsel had determined contract termination would be unlawful. "We have no legal authority to halt the project," Kim said that day. "Of the 60-day window under contract law during which construction can be suspended, 33 days have already elapsed. With 27 days remaining — and the possibility that grounds for suspension could arise later — I am lifting the construction stop order."

Kim also instructed department heads to find a lawful way to pause the project, saying, "The tram is a financial burden on Ulsan, and we must create an opportunity for citizens to weigh in through their collective wisdom."

The Ulsan Urban Railway Line 1 project involves building 15 stations along a 10.85-kilometer corridor between Taehwagang Station and the Sinbok intersection, at a total cost of 381.4 billion won ($260 million) — comprising 228.8 billion won in national funding and 152.6 billion won in city funds — to operate hydrogen-powered trams. The city, targeting a 2029 opening, signed a hydrogen tram manufacturing contract with Hyundai Rotem in March and in April selected a consortium led by Hanshin Construction as the contractor, with preliminary work on ground reinforcement and temporary facility installation already underway.

Controversy erupted when Kim, during the June 3 local elections, pledged to delay the project until after a bypass road along Munsu-ro was built, citing traffic congestion during construction. He subsequently moved to halt the project altogether, citing projected operating deficits after completion, turning the tram into one of the region's most contentious issues.

In an effort to create space for public deliberation, city officials had been searching department by department for legal grounds to suspend the project. Four major obstacles emerged: delay-penalty liability to the Hanshin Construction consortium and Hyundai Rotem; potential claims for expectation damages running into the hundreds of billions of won if contractors sued for lost profits; reputational damage to Ulsan from abandoning a nationally funded project that had cleared a preliminary feasibility review; and personal legal exposure for the civil servants involved.

Kim himself met with Hyundai Rotem on July 24 to explore the possibility of contract termination and project suspension, but the company flatly refused, noting that voiding a properly executed contract would constitute a breach of fiduciary duty. A city council ordinance on public deliberation that the city had submitted to the Ulsan Metropolitan Council was also voted down on July 16.

Against this backdrop, public opinion remains divided. Rep. Kim Tae-gyu (Nam-gu Gap, People Power Party), Nam-gu District Mayor Im Hyeon-cheol, and People Power Party members of the Nam-gu District Council have called for the project to proceed as planned, pointing to the national feasibility review it has already passed. The Ulsan Tram Project Review Coalition, on the other hand, is demanding the project be scrapped entirely, citing anticipated operating deficits after completion.

Jang Gil-sang, a professor in the Department of Business and Economics at the University of Ulsan, said pushing ahead with a project while already planning to cancel it was an administrative contradiction that would only perpetuate social conflict. "This has been a long-term transportation policy pursued by successive Ulsan mayors," he said. "The right approach is to address its shortcomings and move forward."