"13 Local Government Heads Jointly Request National Subsidy for Fare Losses in 'Financial Soundness Crisis Urban Railways'"

Joint Petition Submitted to the National Assembly and Government on the 15th
Financial Deterioration of Urban Railway Operators... Threat to Local Government Fiscal Soundness
Concerns Over Safety of Aging Facilities? Despite Calls to Improve Subway Congestion... Funding and Investment Capacity Depleted

[Asia Economy Reporter Lim Cheol-young] The National Urban Railway Operators Association, consisting of 13 metropolitan and local governments including Seoul, announced on the 16th that it will once again request national government support for losses incurred from legally mandated free rides on urban railways. The association, led directly by the heads of the 13 organizations, simultaneously adopted a "Joint Petition" the previous day and officially submitted it to the National Assembly and the government.

The 13 urban railway operating local governments nationwide have been facing severe difficulties due to the continuous expansion of the urban railway network, rapid demographic changes, and accumulated losses over 40 years. The cumulative deficit costs of railway management institutions nationwide caused by free ride losses have reached 24 trillion won, threatening the fiscal soundness of local governments as well.

Last year, the net loss of urban railway operating institutions nationwide was 1.6 trillion won, an increase of more than 50% compared to 2019 before COVID-19. Most local governments, including Seoul, have frozen fares since the last increase in 2015, resulting in average fares at about 30% of the transportation cost, enduring deficits to stabilize the livelihood of citizens.

In particular, concerns about safety issues are rising due to the aging infrastructure, and there is growing demand for large-scale replacement and repair of outdated facilities as well as expansion of convenience facilities. Recently, as overcrowding in subways has become a problem, expansion and creation of passageways and structural separation of traffic flows are necessary, but financial resources are depleted due to difficulties in securing funds caused by free ride losses.

Accordingly, the association has determined that the issue of national government support for free ride losses can no longer be postponed and plans to strongly urge action again. The association has repeatedly requested compensation for free ride losses from the government and the National Assembly, and last year, a related bill amendment reached the Land, Infrastructure and Transport Committee’s subcommittee in the National Assembly, but the amendment has been delayed following the Ministry of Land, Infrastructure and Transport’s PSO (Public Service Obligation) research project. The delayed national funding is feared to further worsen the financial difficulties of urban railways, so the association plans to strongly urge decisive action.

Representing the association, Seoul City stated, "Not only large cities like Seoul and Busan but also local governments have reached financial limits as they bear the burden of urban railway free ride losses instead of the government," and added, "We expect responsible attitudes and bold decisions from the government and the National Assembly this time so that urban railways used by 25 million citizens can secure sustainability and safety as public transportation."

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