SEOUL, Dec. 25 (Korea Bizwire) — Subway fares in Seoul and some nearby cities are expected to rise next year after a yearslong freeze, as operators have failed to secure sufficient funds to compensate for a growing deficit.
On Saturday, the National Assembly passed a 638.7 trillion-won (US$497 billion) government budget for 2023 but did not allocate a budget for public service obligation (PSO) compensation to make up the deficit caused by the free subway use policy for those aged 65 and older, as well as the underprivileged and people with disabilities, according to Seoul city government officials.
The government has so far offered PSO-related funds under a law on rail industry development, with 380 billion won provided in 2021 and 384 billion won this year.
In an interview with Yonhap News Agency earlier this month, Seoul Mayor Oh Se-hoon said an increase in the subway fares would be inevitable without financial assistance from the government.
Legal free subway rides were first introduced for the elderly in 1984 at the order of then President Chun Doo-hwan and expanded later for the disabled and underprivileged people.
Local authorities have continued to ask the government for financial aid, citing huge burdens for the costs.
Seoul Metro, the city-run operator of the subway system in Seoul, suffered a net loss of 964.4 billion won last year, up 64 percent from 586.5 billion won in 2019, as the elderly population jumped and the number of metro users dropped amid the COVID-19 pandemic.
The basic subway fare in Seoul has remained unchanged at 1,250 won since the last hike in 2015 from 1,050 won.
A subway fare hike would likely lead to one for city buses as well, given previous cases.