[2021 National Audit] Korea Railroad Refund Fees Approaching 93 Billion Won Over 5 Years

[Asia Economy (Daejeon) Reporter Jeong Il-woong] Refund fees incurred due to passengers not boarding trains are estimated to approach 93 billion KRW. However, there are claims that the management efficiency of Korea Railroad (KORAIL) is lacking, necessitating the search for appropriate utilization methods.

According to data received from Korea Railroad by Jo O-seop, a member of the National Assembly Land, Infrastructure and Transport Committee from the Democratic Party of Korea, the number of train tickets refunded by Korea Railroad from 2017 to this year (as of August) totaled approximately 158.549 million, with refund fees amounting to 92.969 billion KRW.

By year, the refund fees were recorded as 17.548 billion KRW in 2017, 25.451 billion KRW in 2018, 27.730 billion KRW in 2019, 12.450 billion KRW in 2020, and 9.806 billion KRW as of August this year.

Although the scale of refund fees has sharply decreased since last year due to the spread of COVID-19, more than 10 billion KRW in refund fees still occur annually.

The issue is that these accumulated refund fees are accounted for as miscellaneous income in Korea Railroad’s financial statements and are managed as such.

In this regard, Assemblyman Jo argued that Korea Railroad should collect and manage refund fees in a separate account and utilize them as project funds for purposes such as improving station service quality.

He particularly pointed out that since the refund regulations of Korea Railroad and SR differ, causing confusion among users, a unified refund regulation should be established.

Currently, Korea Railroad applies refund fees as follows: ▲ From 1 month prior to departure until 1 day before departure (free on weekdays, 400 KRW on Fridays, Saturdays, Sundays, and holidays) ▲ From the day of departure until 3 hours before departure (free on weekdays, 5% of fare on Fridays, Saturdays, Sundays, and holidays) ▲ From 3 hours before departure until departure (5% on weekdays, 10% on Fridays, Saturdays, Sundays, and holidays).

In contrast, SR applies a refund fee system of ▲ 1 day before departure (free) ▲ From the day of departure until 1 hour before departure (400 KRW) ▲ From 1 hour before departure until departure (10%), showing differences from Korea Railroad.

Assemblyman Jo stated, “A method should be sought to return refund fees, which arise from passengers’ personal circumstances, to passengers through improvements in station services, etc. Additionally, it is time for a comprehensive improvement plan regarding refund service regulations.”

Meanwhile, refund fees are revenues generated not from national funds or social overhead capital but from passengers’ personal circumstances.

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