Line operator complains of deficit; municipality threatens to revoke license


The Seoul city government and the operator of Subway Line 9 are at odds over the latter’s unilateral decision to raise fares by 500 won, a 47 percent hike from the current 1,050 won.

The government has threatened to penalize the subway operator should it enforce the plan.

The fued erupted on Saturday when Seoul Metro Line9, the operator of the 25.5-kilometer section linking Gimpo and southern Seoul, announced that it would raise fares by 500 won from June 16. Those who only use Line No. 9 will have to pay 1,550 won, while those who transfer from different lines will have to pay an additional 500 won, the company said. The city authorities estimate that about 200,000 people use the subway line every day.

“The metro line 9 is a private project and we had a clear idea of the fares from the very beginning of the operation in July 2009. Due to the request from the Seoul administrators, we have waivered our fee structure implementation and accepted the guideline to receive the same amount of fees as other public operators and provide free transfers,” the company said.

“However, the mounting deficit is now driving us to a very dangerous position. However, our talks with the authorities have also broken down,” it said, notifying of the fee hike on its website. Seoul Metro Line 9, established by France-based Veolia Environnement and Hyundai Rotem, has claimed rising transfer fee discounts and energy costs have led to a ballooning deficit.

The news comes after the city administration in February approved a 150 won-raise, from 900 won to 1,050 won, for public transportation including the subway.

The Seoul Metropolitan Government on Monday said talks over the fee are still undergoing and that heavy penalties will be imposed should the operator railroad the hike.

“If circumstances and conditions are met, we might consider canceling the operational rights of the firm,” said Yun Jun-byeong, a city official at a press briefing held in the morning. “On Friday, we have imposed administrative orders specifically resisting the hike plans but the management has nixed the plan the very next day. We are considering filing complaints against or imposing fines one them,” he added. The fine would be 10 million won per day of operation with the raised fee, officials said.

“We are aware of the problems the metro management faces and are struggling to tackle it. But since the fee hike is directly related to people’s every day lives, we must be prudent,” Yun said.

By Bae Ji-sook (baejisook@heraldcorp.com)