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Stunned by the sudden rise in fares for Seoul Subway Line No. 9 by an incredible 500 won from 1,050 won to 1,550 won, we are puzzled at an incomprehensible clause in the contract between Seoul City and the operating company of the newest transit system in the capital city.
Article 51 of the contract reads: “The operating company can decide fares independently within a certain limit and the company should consult with the mayor of Seoul when it wants to raise the fare beyond that limit.” On the basis of this same clause, the Seoul Metro 9 claims that it is free to raise the fare and Seoul City says that the unilateral raise is a violation of the contract.
While city officials and the company are contesting the lawfulness of the fare increase, possibly going to court, Seoul citizens will have to pay the additional sum when they use the subway train linking the southwestern Gaehwa town to the center of Gangnam via Gimpo Airport and Yeouido. While all fear an inflationary spiral in this election year, the 50 percent fare increase is certain to stimulate consumer prices.
For the construction of Line 9 which cost 900 billion won ($800 million), Metro 9, a consortium of 12 firms, invested 480 billion won and the rest was born by Seoul City and the central government. City Hall is also paying for up to 90 percent of the company’s operation losses and 25 billion won was delivered to the company last year. So, the taxpayers who took up a half of the construction cost and covering nearly all its business losses are now forced to pay the increased fare to ensure profits for private investors.
Here is also the question of equality: Why do commuters residing in a certain southwestern section of the city have to spend roughly 30,000 won more than the users of other lines a month? The New Bundang Line charging 1,750 won per ride raises the same question, but it at least has the justification of crossing the city boundary.
The number of passengers using Line 9 has quickly surpassed initial estimates since operation began in May 2009. Executives of Metro 9 are now asked to reconsider their decision and consult with city officials.
Article 51 of the contract reads: “The operating company can decide fares independently within a certain limit and the company should consult with the mayor of Seoul when it wants to raise the fare beyond that limit.” On the basis of this same clause, the Seoul Metro 9 claims that it is free to raise the fare and Seoul City says that the unilateral raise is a violation of the contract.
While city officials and the company are contesting the lawfulness of the fare increase, possibly going to court, Seoul citizens will have to pay the additional sum when they use the subway train linking the southwestern Gaehwa town to the center of Gangnam via Gimpo Airport and Yeouido. While all fear an inflationary spiral in this election year, the 50 percent fare increase is certain to stimulate consumer prices.
For the construction of Line 9 which cost 900 billion won ($800 million), Metro 9, a consortium of 12 firms, invested 480 billion won and the rest was born by Seoul City and the central government. City Hall is also paying for up to 90 percent of the company’s operation losses and 25 billion won was delivered to the company last year. So, the taxpayers who took up a half of the construction cost and covering nearly all its business losses are now forced to pay the increased fare to ensure profits for private investors.
Here is also the question of equality: Why do commuters residing in a certain southwestern section of the city have to spend roughly 30,000 won more than the users of other lines a month? The New Bundang Line charging 1,750 won per ride raises the same question, but it at least has the justification of crossing the city boundary.
The number of passengers using Line 9 has quickly surpassed initial estimates since operation began in May 2009. Executives of Metro 9 are now asked to reconsider their decision and consult with city officials.
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Articles by Korea Herald
