Korea Railroad Corporation Proposes 17% Fare Increase, Expecting KTX Fare from Seoul to Busan to Reach 70,000 Won
Korea Railroad Corporation is considering raising the KTX fare from Seoul to Busan from the current 59,800 won to about 70,000 won. Korea Railroad explains that it is necessary to increase fares that have been frozen for 14 years.
This fare increase is not limited to KTX and is expected to affect regular railroad fares such as Saemaul-ho, Mugunghwa-ho, and ITX, drawing attention.
Background of Korea Railroad Corporation's 17% KTX Fare Increase Proposal
Korea Railroad Corporation has recently internally confirmed a plan to increase railroad fares by about 17% and is persuading the government on this. Originally, there were plans to increase fares by up to 24%, but it has been reported that the increase has been reduced considering the burden on the public.
The KTX fares have been frozen since 2011 for 14 years. During this period, consumer prices have increased by about 24.2%, while fares for other modes of transportation, such as express buses and basic taxi fares, have increased significantly. In particular, express bus fares connecting Seoul and Busan have increased by over 50%, while KTX fares have remained unchanged.
Korea Railroad Corporation is facing financial difficulties due to annual operating losses of several hundred billion won and a skyrocketing debt. As of 2023, the cumulative debt has exceeded 21 trillion won, with daily interest costs reaching about 1 billion won. In particular, half of the KTX trains are scheduled to retire between 2033 and 2034, so securing substantial costs for replacements is urgently needed.
Consideration of Fare Increases for Saemaul-ho, Mugunghwa-ho, ITX, and Other Regular Railroads
Korea Railroad Corporation is reviewing plans to increase fares for regular railroads such as Saemaul-ho, Mugunghwa-ho, and ITX in addition to KTX. Both the Saemaul-ho and Mugunghwa-ho have not had fare increases for the past 14 years, similar to KTX, while fares for semi-high-speed rail operations such as ITX have remained unchanged since 2016.
Korea Railroad Corporation plans to adjust these regular railroad fares to alleviate the continually increasing burden of operational costs. In particular, due to the rising electricity prices, the proportion of electricity costs in operating expenses last year reached 8.7% (579.6 billion won), further emphasizing the need for fare increases.
Fare Increase Under Discussion with the Government, Is There a Possibility Within This Year?
The increase in railroad fares is not a unilateral decision by Korea Railroad Corporation. Once the fare cap is announced, decisions related to this will be made, and consultations between the Ministry of Land, Infrastructure and Transport and the Ministry of Economy and Finance are necessary. The government mentioned last year that it would cautiously approach public fare increases when announcing economic policy directions, but the exact timing and whether to raise fares are still uncertain.
Experts warn that delaying fare increases may exacerbate financial burdens and potentially degrade the quality of service. Therefore, expediting the finalization of concrete schedules and plans is crucial. In this situation, prompt action is needed to ensure the sustainability of railroad services.
Conclusion
The fare increases for KTX and regular railroads that Korea Railroad Corporation is proposing seem to be an unavoidable decision due to the financial burdens and increased operational costs resulting from prolonged fare freezes.
If the KTX fares between Seoul and Busan rise to about 70,000 won, it will place an economic burden on users. However, this can be understood as a realistic measure driven by the necessity to maintain and improve railroad infrastructure.
It is deemed important for a national consensus to be reached as specific timing and rates of fare increases are decided in the future.
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