[2020 National Audit] Increasing Legal Fare Evasion Losses in Urban Railways... 2.35 Trillion Won Over 4 Years

Status of Fare Evasion Losses by Urban Railway Operators Over the Past 4 Years (Provided by Jang Kyung-tae's Office)

[Asia Economy Reporter Lee Chun-hee] According to the law, public transportation operators provide statutory free rides to the elderly, disabled, and veterans as a form of social convenience. However, it has been revealed that the scale of losses incurred by urban railway operators due to this system is increasing every year. Especially amid the worsening management conditions caused by the COVID-19 pandemic, the government is being criticized for turning a blind eye to the issue.

According to the "Status of Statutory Free Ride Losses of Urban Railway Operators" submitted by Jang Kyung-tae, a member of the National Assembly Land, Infrastructure and Transport Committee from the Democratic Party of Korea, from six urban railway operators including Seoul Metro, Busan Transportation Corporation, Incheon Transit Corporation, Daegu Metropolitan Transit Corporation, Gwangju Metropolitan Rapid Transit Corporation, and Daejeon Metropolitan Express Transit Corporation, the total losses from free rides over four years from 2016 to last year amounted to 2.3254 trillion KRW.

In particular, the loss scale, which was 536.6 billion KRW in 2016, gradually increased every year, rising by 16.2% to 623.4 billion KRW in 2019.

By institution, over the four years, the losses were ▲Seoul Metro 1.4197 trillion KRW ▲Busan Transportation Corporation 506.1 billion KRW ▲Daegu Metropolitan Transit Corporation 217.8 billion KRW ▲Incheon Transit Corporation 99 billion KRW ▲Daejeon Metropolitan Express Transit Corporation 48.4 billion KRW ▲Gwangju Metropolitan Rapid Transit Corporation 34.4 billion KRW, in that order.

Currently, laws such as the "Senior Welfare Act," "Disabled Welfare Act," "Act on the Honorable Treatment of Persons of Distinguished Service to the State," "Act on the Honorable Treatment of May 18 Democratic Movement Veterans," and "Act on the Honorable Treatment and Organization Establishment of Special Mission Veterans" require public transportation operators to provide statutory free rides to the individuals specified in these laws. However, the Ministry of Land, Infrastructure and Transport, the competent authority, only compensates Korea Railroad Corporation (KORAIL) among the operators for free ride losses.

Meanwhile, these urban railway operators are facing severe management difficulties, with debt ratios as of last year at ▲Seoul Metro 54.3% ▲Busan Transportation Corporation 29.6% ▲Daegu Metropolitan Transit Corporation 11.6%. Furthermore, according to estimates by each institution, due to the impact of COVID-19, ▲Seoul Metro is expected to incur losses of 365.7 billion KRW ▲Busan Transportation Corporation 79 billion KRW ▲Daegu Metropolitan Transit Corporation 43.7 billion KRW, making the financial difficulties of these operators likely to worsen significantly.

Jang Kyung-tae, Democratic Party of Korea lawmaker Photo by Yonhap News

Assemblyman Jang Kyung-tae said, "The severe operational difficulties of urban railway operators will soon lead to the suspension of transportation services for the public," adding, "Since the statutory free ride system is a national welfare system based on law, the Ministry of Land, Infrastructure and Transport should compensate for the losses caused by free rides, as it does for KORAIL."

Emphasizing that "related bills for the legislation of national subsidy compensation for public service costs have been proposed," Assemblyman Jang said, "I will strive to establish the legal basis for national subsidy compensation through the passage of the bill," and "By securing safety investment costs for urban railway operators, we will provide high-quality transportation services to the public in a stable manner."

This content was produced with the assistance of AI translation services.