Public service charges to rise

By Lee Hyo-sik

Municipal administrations and state-run companies are set to raise charges for public transport and other public services.

According to the government, Sunday, people will have to pay more to use buses and the subway system in Seoul and other large cities and face higher bills for drinking water and dumping trash, among others.

The move to raise public service fees comes because inflation remains benign amid falling prices for oil and other raw materials. It will certainly place an additional financial burden on low-income households struggling with stagnant income growth and rising debt amid deteriorating economic conditions.

President Park Geun-hye recently instructed policymakers to lower utility charges reflecting recent drops in international crude oil prices. But experts say that state-run utility companies are unlikely to reduce rates because they have huge debts.

The Seoul Metropolitan Government (SMG) plans to raise subway and bus fees for the first time in three years, to reflect increases in consumer prices.

Seoul subway system operators are expected to incur a combined 500 billion won in losses this year. Seoul city has also been providing a 300 billion won annual subsidy to bus companies over the past few years.

But the city government has not decided by how much public transport costs will rise. Basic subway and bus fares are currently set at 1,050 won.

“Seoul’s public transport fees have remained unchanged for three years, despite rising consumer prices,” an SMG official said. “The financial health of both subway and bus operators has deteriorated.”

The Incheon Metropolitan Government is poised to raise subway fares by 200 won to 1,250 won from 1,050 won in a bid to improve the operator’s bottom line. Bus fares in Korea’s third-largest city could increase by up to 300 won to 1,400 won from 1,100 won, according to city officials.

The Daegu Metropolitan Government also plans to make it more expensive to use the subway and bus. It is expected to raise fares by 200 won to 1,300 won.

In addition, the Busan Metropolitan Government has decided to raise tap water charges gradually over the next few years to reduce consumption and improve the finances of public service providers.

Sejong Metropolitan Autonomous City also said that it is considering raising the cost of tap water and sewage treatment. Wonju, Icheon and other cities are expected to follow.

Yongin city, Gyeonggi Province, will raise garbage bag prices in January to finance the disposal of an increasing amount of trash.

State-run enterprises are also poised to raise the costs of their services.

For instance, Korea Expressway Corp. has asked the government to increase highway fares by 4.9 percent in 2015 in a bid to reduce debts.

Policymakers have been considering the matter, but it remains to be seen whether the fares will increase.