Last Year's Operating Loss of 1.8 Trillion Won... Labor and Management Representatives of Urban Railways Nationwide Gather in Daegu to Discuss Solutions

Freight rates below transportation costs, losses increase due to COVID-19 impact... Government and local governments urge active support
Plan to form a parliamentary forum for 'Regional Balanced Development Green Urban Rail'

[Asia Economy Reporter Lim Cheol-young] Labor and management representatives from six urban railway operators nationwide gathered in Daegu on the 18th to discuss solutions to resolve financial difficulties caused by a net loss of 1.8 trillion KRW last year. The situation worsened as the net loss snowballed due to COVID-19 on top of existing losses.

According to Seoul Metro on the day, labor and management from six urban railway operators nationwide?Seoul, Busan, Daegu, Incheon, Gwangju, and Daejeon?held a joint council meeting in Daegu and decided to engage in activities to persuade the National Assembly and government ministries.

Kim Sang-beop, CEO of Seoul Metro, said, "Starting with today's joint council meeting, we plan to devote all efforts to persuading the National Assembly and key government ministries. Since finances are essential for safe and convenient urban railways, we hope the government, including the Ministry of Strategy and Finance, will show a progressive attitude along with the interest of citizens."

Urban railway operators nationwide have seen a significant increase in net losses compared to the previous year due to chronic deficit structures such as fares below transportation costs and losses from free rides, compounded by operational losses caused by COVID-19. Seoul recorded a net loss of 1.0954 trillion KRW, an increase of over 500 billion KRW compared to 2019. Busan’s loss increased by 110 billion KRW to 263.4 billion KRW, Daegu’s by 66.6 billion KRW to 206.2 billion KRW, Incheon’s by 34.4 billion KRW to 159.1 billion KRW, Gwangju’s by 1.7 billion KRW to 37.4 billion KRW, and Daejeon’s by 2.4 billion KRW to 39 billion KRW.

Labor and management representatives expressed concerns about the current situation, stating that improvements to facilities and vehicles, including rolling stock over 30 years old, are urgently needed but may not be implemented due to lack of funds. They also voiced difficulties with the current fare system, which is far below the transportation cost per passenger. For example, Seoul Metro’s transportation cost per passenger last year was 2,061 KRW, significantly higher than the base fare of 1,250 KRW.

On the day, the representatives agreed to strongly request the government to compensate national subsidies for public service costs incurred due to social distancing participation and free rides caused by COVID-19, to prevent the subway?citizens’ means of transportation?from stopping and to ensure public safety, continuing their efforts from last year.

Accordingly, the representatives plan to continue meetings with local governments, lawmakers, and government officials until May, when the government budget formulation process is underway. They will request that operating losses of urban railway and other public transportation operators caused by COVID-19 be included in the support scope when the 4th supplementary budget for government disaster relief is discussed, and also request the inclusion of public service compensation costs in the Ministry of Land, Infrastructure and Transport’s budget.

Furthermore, in the second half of the year, they intend to focus on passing bills such as the amendment to the Urban Railway Act currently pending in the National Assembly’s Land, Infrastructure and Transport Committee to establish legal grounds for continuous cost compensation. They plan to form a “Parliamentary Forum for Regional Balanced Development Green Urban Railways (tentative name)” involving lawmakers from the Land Committee, labor and management representatives of urban railway operators, and related local government heads to discuss legal and institutional improvements for sustainable urban railway transportation welfare and safety assurance.

Meanwhile, the representatives have continuously requested national subsidies for public service costs from the government and National Assembly last year as well. Although they achieved some results, such as partial support for replacing old rolling stock, they faced opposition from the Ministry of Strategy and Finance, which insisted on the “principle of no support for operating loss,” regarding losses from free rides and other operating costs.

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