my timesThe Korea Times

ED Debt-ridden subway

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  • Updated KST

Seoul Metro's ongoing deficit and accumulated debt have reached critical levels. The capital's subway system, often described as the “feet of the people,” can no longer serve as public transport without some contingency measures. The central government, City Hall and Seoul Metro should stop passing the “deficit bomb” to each other and look for a solution sooner rather than later.

Most of all, the pace of debt growth and deficit accumulation at Seoul Metro is too fast. As of June 30, the corporation's bond issuance has exceeded 2 trillion won ($1.75 billion), up 42 percent from just half a year ago, even amid the decrease in ridership due to side effects from the COVID-19 shock. The shortfall in operating funds is estimated to reach 1.6 trillion won this year.

Seoul Metro's debt-ridden operation is nothing new. No one has raised the need to increase subway fares to a realistic level for too long while all other prices have soared. The problem resulting from free subway rides for citizens aged 65 or older remains the same. Four years have passed since the city's first eight subway lines were integrated, but few attempts have been made to regain financial soundness.

The municipality has done nothing while watching the subway system go into the red. It neither restructured the debt-stricken corporation nor adjusted subway fares to offset increasing operational costs. The Ministry of the Interior and Safety, responsible for local public enterprises, merely raised its debt ceiling instead of demanding debt-reduction plans.

Even the Seoul Metropolitan Council turned a blind eye to the reality, “helping” to accumulate debt with the connivance of the municipal administration. If this continues, safety issues could soon surface. Experts point out that Seoul Metro has long failed to replace old carriages due to a lack of money. It is necessary to raise subway fares, adjust operations and slim down the organization. It costs 2,020 won to carry a passenger, but the basic charge has remained at 1,250 won for years. Is this really a sustainable service?