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| Commuters pass through the fare gate at Sinchon Station on Seoul Metro Line 2, Jan.24. Yonhap |
By Lee Hyo-jin
The Seoul Metropolitan Government is at odds with the Ministry of Economy and Finance over sharing the burden of the snowballing deficit of Seoul Metro, the capital's subway operator.
The city government is demanding that the ministry partially cover the financial deficit incurred due mainly to the free senior travel scheme ― a welfare policy adopted by the central government almost 40 years ago.
Under a senior welfare policy enacted in 1984, every person aged 65 or older is entitled to use the subway free of charge in any city, regardless of their income. As the share of the elderly population nationwide has been rising steeply ― from 5.9 percent in 1984 to 17.5 percent in 2022 ― Seoul Metro has been pointing at the welfare policy as a major reason for its years-long operating losses.
The finance ministry, however, has refused to recognize this, saying that issues surrounding the city's public transportation system should be handled solely by the local authority.
Seoul city issued a statement, Sunday, refuting the ministry's claims. It argued that the city government does not have the legal authority to make adjustments on the age eligibility of free traveling seniors nor discount rates, a key reason why the ministry should actively engage in the matter.
"The free travel scheme policy is a central government measure applied to all people regardless of their place of residency. As such, it can be interpreted as an illegal move if a local government makes revisions to the policy," that statement read. Under administrative law, a local government is not allowed to to issue an ordinance conflicting with state law.
City authorities have been considering raising the eligible age for the free travel scheme to 70 from the current 65, following Seoul Metro's estimate that raising the eligibility age to 70 could reduce losses by as much as 152.4 billion won.
It also argued that the central government should partially cover the losses as it does for the state-run railway operator Korail. In accordance with the Act on Railroad Industry Development, the Ministry of Land, Infrastructure and Transport compensates up to 70 percent of the losses caused by the free travel scheme policy.
In a recent Facebook post, Seoul Mayor Oh Se-hoon said his office will try to resolve the issue through a two-track approach ― overhauling the public transit fare scheme while urging the central government to share the financial burden.
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| Seoul Mayor Oh Se-hoon speaks during a press conference held at City Hall, Jan. 30. Yonhap |
The finance ministry, however, has been staying quiet about the issue after refusing to allocate a budget for public service obligation (PSO) compensation in December last year, which would have offered financial aid to the subway's operator.
Regarding the decision, Finance Minister Choo Kyung-ho then said, "Technically, the welfare policy is a matter which should be handled by the local government. Plus, there are other factors to consider such as fairness issues with other municipalities."
Attempts to reach a finance ministry official for comment were unsuccessful, Monday.
After failing to secure sufficient funds to compensate for its losses, Seoul city announced recently that subway fares will rise by 300 to 400 won, from the current 1,250 won, beginning as early as April.
Seoul is not the only metropolitan city grappling with losses due to free subway travel.
Daegu, the nation's third-largest city, is also seeking to raise the eligible age for free travel to 70 from the current 65 by revising the local ordinance. However, the Ministry of Welfare and Health, which oversees senior welfare policies, said Monday that it will review whether Daegu's proposed plan would be possible under current legal circumstances.
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