Seoul City Lowers Profit Rate for Line 9 Private Investment Project... 72 Billion KRW Fiscal Savings

Reflecting Low Interest Rates, Reduced from 4.02% to 2.40%... Expected Savings of 72 Billion Won Over 17 Years

On September 26 last year, the platform at Express Bus Terminal Station on Seoul Subway Line 9 was crowded with commuters during the morning rush hour. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Jo In-kyung] The Seoul Metropolitan Government announced on the 1st that it has reached an agreement on refinancing negotiations to lower the base project rate of return with Seoul Metro 9 Line Co., Ltd., the private investor and operator of Subway Line 9.

In the negotiations, the city and Metro 9 Line agreed to reduce the base project rate of return from 4.02% in December last year to 2.40% going forward. The base project rate of return serves as the standard for calculating the financial support subsidy that the city must provide to the operator as cost compensation.

The city expects to achieve approximately KRW 72 billion in fiscal savings by October 2038 as a result of this agreement.

Both parties plan to finalize the amendment agreement after review and consultation with related institutions such as the Ministry of Economy and Finance and the Public Investment Management Center (PIMAC) of the Korea Development Institute (KDI), and complete the refinancing by March next year.

The city explained that this agreement reflects the recent years' sustained low interest rate trend, such as the Bank of Korea's base rate dropping from 2.5% at the time of the 'Subway Line 9 Project Restructuring' in 2013, when the major shareholder of Metro 9 Line was completely replaced, to 0.5% this year.

Hwang Bo-yeon, Director of Urban Transportation at Seoul City, said, "Although there were some difficulties during the refinancing negotiations with the Line 9 operator, the discussions were successfully completed through mutual consensus. We will do our best to promptly proceed without procedural issues until the final amendment agreement is signed, so that this refinancing of Line 9 becomes a leading example of proactive administration by Seoul City to alleviate the city's financial burden."

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