Oh Se-hoon: "Subway Fare Increase Inevitable Without Government Support"

Possibility of Subway Fare Increase Officially Mentioned for the First Time on the 19th
Seoul Subway Base Fare Frozen for 8 Years Since 2015
Oh Se-hoon "Cannot Bear Annual Deficit of 1 Trillion Won Every Year"

[Image source=Yonhap News]

[Asia Economy Reporter Kwak Min-jae] Seoul Mayor Oh Se-hoon stated that if the government does not support the loss costs for free subway rides for the elderly and disabled, it may have no choice but to consider raising subway fares next year. Mayor Oh mentioned the possibility of a subway fare increase officially for the first time.

On the 19th, in an interview with Yonhap News, Mayor Oh said about the plan to raise subway fares next year, "The subway deficit has become too large. If it is concluded that the government will not help, we may be in a position where we have no choice but to consider a fare increase."

Mayor Oh said, "Seoul Metro is running an annual deficit of about 1 trillion won, and a significant portion of that deficit comes from free rides. As in previous years, this year we have comprehensively requested PSO (Public Service Obligation) compensation from the Ministry of Economy and Finance and both major parties."

He added, "If there is no support from the central government this year as well, we will have no choice but to seek self-help measures," emphasizing, "We can no longer bear an annual deficit of 1 trillion won under the notion that 'transportation is welfare.'"

The basic subway fare in Seoul has been frozen for eight years since it was raised from 1,050 won to 1,250 won in 2015. Due to population aging, the number of free riders increases every year, and the average fare per person is less than half of the cost. The fare loss per person surged from 494 won in 2019 to 1,015 won last year.

With passenger revenue declining due to COVID-19, Seoul Metro, which operates the Seoul subway, recorded a net loss of 586.5 billion won in 2019, 1.1137 trillion won in 2020, and 964.4 billion won last year. The proportion of free ride losses in last year's deficit was 29% (278.4 billion won).

Seoul City holds the position that since the free ride system for transportation-vulnerable groups was introduced in urban railways in 1984 according to government policy at the time, the government should compensate for the loss costs. However, the government has so far only supported loss compensation for free rides to Korail based on Article 32 of the Railroad Industry Development Act.

On the 24th of last month, the National Assembly Land, Infrastructure and Transport Committee approved a total of 756.4 billion won for next year's budget, including additional compensation for losses of local government urban railways. However, as the ruling and opposition parties continue to clash over the budget bill for next year, the passage in the plenary session remains uncertain.

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