Chronic Deficit Uisinseol Line, New Operator Passes Investment Deliberation Committee... First Step Toward Normalization

'Uisinseol Urban Railroad Co., Ltd.' Passes Government Review
Operation Until 2047... Alleviating City Financial Burden
New Operator Agreement Signed, Revenue Stability Expected

The new operator designation plan for the Uisinseol Line, connecting Bukhansan Ui Station in Gangbuk-gu, Seoul, and Sinseol-dong Station in Dongdaemun-gu, has passed the government’s private investment review. Although deficits have continued since its opening in September 2017 due to lower-than-expected passenger numbers and a high rate of fare evasion, a path to business normalization has opened based on government support.

On the 17th, the Seoul Metropolitan Government announced that the 'Uisinseol Line New Operator Designation Plan and Implementation Agreement' passed the review at the 5th Private Investment Project Review Committee of the Ministry of Strategy and Finance held on the 12th.

Route map of the Uisinseol Line connecting Bukhansan Ui Station and Sinseoldong Station. Provided by Seoul City

The Uisinseol Line is an urban railway connecting Bukhansan Ui and Sinseol-dong, serving as a major public transportation means in the Gangbuk area, which is a transportation-disadvantaged region. However, due to failures in passenger number forecasts and a high fare evasion rate, deficits have continued. The passenger volume of the Uisinseol Line was about 75,000 in 2024, approximately 58% of the forecasted daily demand of 130,000, and the fare evasion rate was 36.2%, more than three times the predicted level of 11.6%.

With the bankruptcy risk of the previous operator, Uisinseol Light Rail Co., Ltd., discussions on business restructuring began in 2021. In particular, Seoul changed the business model (BTO-MCC, minimum cost compensation method) and recruited a new operator. In April, 'Uisinseol Urban Railway Co., Ltd.' was designated as the preferred negotiator after receiving the highest evaluation score.

To ensure the swift designation of the new operator and service stabilization, Seoul conducted about 30 negotiation sessions over approximately six months from May to November immediately after designating the preferred negotiator. The 5th Private Investment Project Review Committee of the Ministry of Strategy and Finance was also pushed forward to complete the process within the year.

With the passage of this private investment review, the operating environment of the Uisinseol Line is expected to stabilize, providing more convenient public transportation services in the future. The new operator, Uisinseol Urban Railway Co., Ltd., will operate the Uisinseol Line stably until 2047. 'Uisinseol Urban Railway Co., Ltd.' is a project implementation corporation formed by a consortium of Woojin Industrial Systems and Shinhan Asset Management. Woojin Industrial Systems is the parent company of the existing management operator, Uisinseol Light Rail Operation Co., Ltd., and the operator of the Uijeongbu Light Rail. Shinhan Asset Management is currently a financial investor in Phase 1 of Seoul Subway Line 9, and both investors have extensive experience operating private railways.

The implementation agreement includes ▲designation of Uisinseol Urban Railway Co., Ltd. as the project operator ▲financial support under the BTO-MCC method ▲procurement of a total private investment of 280.5 billion KRW and establishment of management and operation rights ▲setting the total annual management and operation cost at 20.1 billion KRW ▲and responsible operation of ancillary business income. Above all, business stability is expected to be strengthened. The operator’s proposed management and operation cost was reduced from 21.8 billion KRW per year to 20.1 billion KRW per year, predicting a reduction of about 51.7 billion KRW in Seoul’s financial burden over approximately 23 years. Additionally, for the first time in a private light rail, a performance evaluation system will be introduced to assess operational performance according to Seoul-type private railway indicators and reflect this in the payment of management and operation costs.

The Uisinseol Line is scheduled to sign the implementation agreement with the new operator within this month. From next year, the handover phase between the existing and new operators will begin in earnest. Yoon Jong-jang, Director of the Seoul Metropolitan Government’s Transportation Office, stated, "As a result of continuous efforts to normalize the Uisinseol Line project, the passage of this private investment review has secured long-term operational stability. As it is evaluated as a successful case of business restructuring, we will do our utmost to ensure that the Uisinseol Line continues to serve as the 'citizens’ feet' in the Gangbuk area of Seoul stably in the future."

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