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The increasing number of those taking subways for free, mostly seniors, has contributed to subway operators’ rising deficits, officials said Monday.
According to the Seoul Metropolitan Government, 7 of 9 Seoul subway lines recorded about 425 billion won ($373.5 million) in deficit last year, showing little improvement from previous years.
Of them, subway Line No. 3 which runs from Ilsan, Gyeonggi Province, to Ogeum in southwestern Seoul through central and southern portions of the capital recorded the largest deficit of 112 billion won.
Only subway Lines No. 2 and No. 9 remained in the black, earning 36.5 billion won and 3.1 billion won, respectively.
Line No. 2, which is a loop going around major districts in the city, annually recorded financial gains, as an average of 1.55 million passengers took the subway every day last year.
Seoul City said that the free travel for the elderly appears to have contributed to the deficit, as it would have brought in about 288 billion won had the passengers paid, equal to about 68 percent of last year’s 425 billion won deficit. Those aged 65 or older are entitled to take the subway for free.
The city forecast the loss in revenue from fare exemptions will exceed 300 billion won this year, with 259 million free rides, about 14 percent of the total, the city said.
From January to July, the city has already seen a deficit of over 160 billion won, it added.
The increasing elderly population has become one of the major societal tasks faced by the country with mushrooming welfare costs as well as calls to enhance their life quality. The government’s move to raise the legal age of “senior citizens” from the current 65 to 70 has also become a topic of heated debate in connection to various welfare benefits and labor regulations.
The share of Korea’s total population who are senior citizens rose to 13.1 percent this year, jumping by 6 percentage points from 2001. The proportion is anticipated to reach nearly 21 percent by 2026, according to the state-run agency Statistics Korea.
In order to close the subway deficit, Seoul City has asked the central government financially support half of the expected deficit -- 168 billon won -- this year, citing that the free travel is a national welfare measures pushed by the government.
The Transport Ministry, however, reportedly turned down the request, claiming there was no legal framework that mandates the state compensate for losses from city subway operations.
In the case of Korea Railroad, the national train service provider, the state supports around 60 percent of the cost of free travel under the railroad industry law. Last year, the government provided 125 billion won, which made up 62 percent of the deficit caused by discount packages for the elderly and other benefit receivers.
Fare dodgers have also been adding to the subway’s financial woes.
According to Rep. Noh Woong-rae of the New Politics Alliance for Democracy, over 190,000 illegal free riders were caught in the past five years, resulting in about 6.5 billion won in penalty fees. If caught, a violator must pay a penalty that is 30 times the regular subway fare.
By Lee Hyun-jeong (rene@heraldcorp.com)
According to the Seoul Metropolitan Government, 7 of 9 Seoul subway lines recorded about 425 billion won ($373.5 million) in deficit last year, showing little improvement from previous years.
Of them, subway Line No. 3 which runs from Ilsan, Gyeonggi Province, to Ogeum in southwestern Seoul through central and southern portions of the capital recorded the largest deficit of 112 billion won.
Only subway Lines No. 2 and No. 9 remained in the black, earning 36.5 billion won and 3.1 billion won, respectively.
Line No. 2, which is a loop going around major districts in the city, annually recorded financial gains, as an average of 1.55 million passengers took the subway every day last year.
Seoul City said that the free travel for the elderly appears to have contributed to the deficit, as it would have brought in about 288 billion won had the passengers paid, equal to about 68 percent of last year’s 425 billion won deficit. Those aged 65 or older are entitled to take the subway for free.
The city forecast the loss in revenue from fare exemptions will exceed 300 billion won this year, with 259 million free rides, about 14 percent of the total, the city said.
From January to July, the city has already seen a deficit of over 160 billion won, it added.
The increasing elderly population has become one of the major societal tasks faced by the country with mushrooming welfare costs as well as calls to enhance their life quality. The government’s move to raise the legal age of “senior citizens” from the current 65 to 70 has also become a topic of heated debate in connection to various welfare benefits and labor regulations.
The share of Korea’s total population who are senior citizens rose to 13.1 percent this year, jumping by 6 percentage points from 2001. The proportion is anticipated to reach nearly 21 percent by 2026, according to the state-run agency Statistics Korea.
In order to close the subway deficit, Seoul City has asked the central government financially support half of the expected deficit -- 168 billon won -- this year, citing that the free travel is a national welfare measures pushed by the government.
The Transport Ministry, however, reportedly turned down the request, claiming there was no legal framework that mandates the state compensate for losses from city subway operations.
In the case of Korea Railroad, the national train service provider, the state supports around 60 percent of the cost of free travel under the railroad industry law. Last year, the government provided 125 billion won, which made up 62 percent of the deficit caused by discount packages for the elderly and other benefit receivers.
Fare dodgers have also been adding to the subway’s financial woes.
According to Rep. Noh Woong-rae of the New Politics Alliance for Democracy, over 190,000 illegal free riders were caught in the past five years, resulting in about 6.5 billion won in penalty fees. If caught, a violator must pay a penalty that is 30 times the regular subway fare.
By Lee Hyun-jeong (rene@heraldcorp.com)
