Seoul retracts plan to raise subway fares

By Lee Hyo-sik

The Seoul Metropolitan Government Monday withdrew its plan to raise subway fares this year just five hours after it announced the measure as part of moves to reduce its snowballing debt.

At a press briefing in the late morning, the city said it will have to raise the fare by up to 200 won per trip within this year as a means to slash its debt.

However, it took back the announcement, saying the hike was not a matter it could decide alone.

“We’ve considered raising fares as part of efforts to reduce debt. But we have no plan to raise them within this year,” the city government said in a statement.

Seoul City, however, said it will refrain from issuing bonds and either scrap or scale down a range of infrastructure development plans to slash its debt which has surged 75 percent to 3.2 trillion won over the past four years under Mayor Oh Se-hoon.

It became inevitable for Seoul to run a deficit by outspending its earnings over the past few years in order to cope with the worldwide economic slowdown.

But civic groups blame Mayor Oh for Seoul’s worsening fiscal state, arguing that the lawyer-turned-politician is obsessed with raising his standing with the public.

They have been urging Oh to discontinue what they call an array of “pork barrel” projects and slash labor and other operating expenses to bolster the capital’s financial health.

Besides municipal debts, outstanding liabilities of SH Corp., a company that manages housing development projects in the Seoul metropolitan region, and other city-affiliated public companies amounted to 16.3 trillion won as of the end of 2009.

In particular, SH Corp. saw its debt soar to 13.5 trillion won from 6.5 trillion won over the past four years as the metropolitan government mobilized the company to build and provide thousands of public housing units at prices much lower than costs.

Seoul city plans to cut the combined 19.5 trillion won debt to 12.7 trillion won by 2014 through a range of austerity measures.

It will also scale down a waterway construction project on the Han River and other nearby streams, while refraining from repairing footpaths.

It also plans to cut bond issuance to 680 billion won this year from an initial projection of 980 billion won and repay a total of 1.8 trillion won in bonds issued in 2009 and 2010 by 2014. The municipal government will slash operating expenses by 3 percent next year and boost the efficiency of its fiscal management.

Additionally, SH Corp. will sell 1,134 public housing units, which were initially built for lease at lower than market prices.

서울 지하철요금 100-200원 인상 추진

서울시가 투자기관을 포함해 총 20조원에 달하는 부채를 줄이고자 연내 지하철 요금을 인상하고 한강 뱃길 사업을 보류 또는 축소하는 등의 대책을 추진한다.

서울시는 특히 원가보다 낮은 운임과 무임 운송비용 등 구조적 적자요인을 안고 있는 지하철공사 두 곳의 부채를 적정 수준으로 관리하기 위해 올해 중 요금을 100-200원 인상하는 방안을 서울시의회와 협의 중이다.

시는 긴축재정, 불필요한 사업 자제, 지방채 전액 상환 등을 통해 작년 말 현재 시 3조2천억원, SH공사 13조5천억원, 서울메트로와 도시철도공사 2조7천억원 등 총 19조5천억원인 부채를 2014년까지 12조7천억원으로 6조8천억원 축소할 계획이다.

아울러 서울시는 올해 부채가 더 늘어나지 않도록 지방채 발행 규모를 당초 9천800억원에서 6천800억원으로 줄이고, 경제위기 극복과 경기 부양을 위해 작년과 올해 발행한 지방채 1조8천억원을 2014년까지 전액 상환할 계획이다.

시는 또한 내년 경비예산을 3% 삭감할 예정이다.