Seoul Metro seeks state funding for free rides

Seoul Metro free ride losses have led the operator to formally ask the South Korean government to cover those costs. The request concerns the legally mandated free-ride system for certain groups, including pensioners and veterans. This is reported by the railway transport news portal Railway Supply.

The company says it can no longer bear the burden on its own. It also describes this as the first time a South Korean urban metro operator has submitted an official request to central authorities specifying the exact amount of support it considers necessary.

To support that government funding request, Seoul Metro sent official letters to the Ministry of Economy and Finance, the Ministry of Land, Infrastructure, and Transport, the Ministry of Health and Welfare, and the Ministry of Patriots and Veterans, as reported by Railway Pro. In those letters, it asked both for legal provisions allowing state-budget support and for direct financial assistance.

Seoul Metro free ride losses and legal support

The operator says that if the Urban Railways Act amendment now under debate in the National Assembly, along with other relevant legislation, is delayed, the state should provide 576.1 billion won, or EUR 328.4 million, from public funds. In other words, Seoul Metro is seeking both a legal basis for state funding and direct compensation if the legislative change does not move forward in time.

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According to Seoul Metro, the amount it is seeking is equal to 74.3% of the free-ride losses recorded last year by South Korea’s six urban rail operators: Seoul, Busan, Daegu, Incheon, Gwangju, and Daejeon. Across the country, those losses totaled 775.4 billion won, or about EUR 442 million.

The company says the 74.3% figure matches the average compensation rate granted over the past nine years to the national railway operator KORAIL for public service obligation costs under South Korean railway legislation.

For example, Seoul Metro points to Sindorim station to show the difference in treatment. If a passenger entitled to free travel passes through the gates for Line 1, which is operated by KORAIL, the loss is compensated by the state. If the same passenger uses the gates for Line 2, which is managed by Seoul Metro, the local operator must bear the full cost.

Free rides for pensioners and veterans

Data presented by Seoul Metro shows that the six urban operators posted a combined net loss of 1.4875 trillion won last year, or about EUR 847.9 million. Of that total, 775.4 billion won, equivalent to EUR 442 million, came from the free-ride scheme. That accounted for 52.1% of the overall net loss.

Among the six operators, Seoul Metro recorded the largest loss from free rides, amounting to 448.8 billion won, or roughly EUR 255.8 million. The company also says its accumulated deficit has reached 19.749 trillion won, approximately EUR 11.26 billion.

Seoul Metro argues that the current system was created in a very different demographic context. The scheme was introduced in 1980 by presidential decree. It became a full fare waiver for people aged 65 and older after the Elderly Welfare Act was amended in 1984. At that time, the population’s aging rate stood at 4%. This year, according to the operator, it has reached 21.2%. Statistics Korea data projects that it will rise to 40.1% by 2050.

The company uses those figures to argue that a system introduced decades ago is now placing significantly greater financial pressure on urban transit operators in a rapidly aging society.

Lawsuit against the Ministry of Patriots and Veterans

At the same time, Seoul Metro is pursuing legal action against the Ministry of Patriots and Veterans. The first hearing in that case was held on April 15, as reported by Yonhap. The operator is seeking reimbursement of 3.7 billion won, or about EUR 2.1 million, for the cost of free rides provided to veterans and state-decorated individuals.

During the hearing, Seoul Metro argued that serious operational difficulties arise when the state requires another entity to carry out responsibilities that belong to the government without compensation. It also asked for legal provisions to guarantee fair reimbursement.

According to the operator, the ministry already subsidises free rides for veterans for all national bus transport associations, as well as for KORAIL and SR, but does not provide the same support to Seoul Metro.

Han Younghee, head of Seoul Metro’s planning department, said the social benefits generated by the free-ride scheme belong to the state rather than the company. He also called for public support to amend the law and introduce government funding.

Seoul Metro’s position is that without legislative changes and compensation from the state budget, the current system will become increasingly difficult to sustain as the population continues to age.

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