▲ KTX waiting on the railroad (Source: KORAIL)

The Korea Railroad Corporation (KORAIL) will increase the fare for the KTX (Seoul-Busan) service from 59,800 won to 70,000 won. KORAIL said it has calculated the increase with the goal of increasing the fare in the second half of the year, and is still in the internal review stage. KORAIL has not increased fares in 14 years, since 2011. During that time, consumer prices increased by 24.2 percent, metropolitan trains by 56 percent, Seoul city buses by 67 percent, and taxi base fares by 100 percent.

Changwon Special Self-Governing City has two stations: 'Changwon Station' and 'Changwon Jungang Station,' thus the fare increase is expected to affect students of CWNU who use KORAIL often. In this regard, we conducted a survey on KTX fare increase among students of CWNU.

According to the survey, 79% of the 19 students surveyed said that the main purpose of using KTX is traveling. In addition, 37% of students said that the KTX fare increase had some impact on their commute or travel plans. In particular, 42% of students said they would use KTX less or consider other modes of transportation if the fare were to increase.

In addition, the majority of students who have used other modes of transportation other than KTX, cited buses and regular trains as a disadvantage because although they are cheaper, they have a longer transit time. Therefore, if KTX fares are increased, it is expected that students who choose KTX to save time, are likely to feel a greater financial burden.

In an open-ended question asking what they would like to see from the government and KORAIL, the most popular suggestion was to expand discounts for students and young adults. Other suggestions included, “providing discounts and additional services for long-distance passengers,” and, “reopening the routes handed over to SRT by KTX would reduce the need for fare increases.”

On the other hand, there were also opinions that the fare increase was inevitable. KORAIL has been discussing fare hikes for years, citing rising energy costs, replacing aging high-speed trains, and financial deficits as reasons. Last year, KORAIL spent KRW 579.6 billion on energy consumption, accounting for more than 8% of its total operating expenses (KRW 6.639 trillion). Electricity costs have been rising every year. KORAIL explained that, “the unit cost of electricity has increased 143.5% from 2011, but the company has frozen passenger fares on trunk lines for 14 years because it is a public transportation system.”

Forty-six KTX-1s introduced in 2004 will soon reach their 30-year mark. This is more than half of the 86 total high-speed trains in Korea. The replacement of aging urban rail vehicles is supported by 30% of the national budget. However, the replacement of KTX, high-speed trains, is not eligible for this program and must be paid for entirely by KORAIL.

As a result, KORAIL loses about 400 billion won every year and has accumulated about 20 trillion won in debt. The railroad business is in the public domain, with low profits due to strong fare controls. If out-dated vehicles are replaced without fare adjustments, the debt-to-equity ratio is expected to reach up to 402.3% in 2040.

However, the timing of the fare increase is uncertain. This rail fare increase is implemented by the Ministry of Land, Infrastructure, and Transport and the Ministry of Strategy and Finance, which designates and notifies the upper fare limit after consultation with the Ministry of Land, Infrastructure, and Transport. KORAIL then reports it to the Ministry. Although KORAIL claims that it is an inevitable choice to reduce its operating burden and fiscal deficit, it will be a challenge to balance the government's public fare policy with the public's financial burden.

By Lee Min-ji, cub-reporter  minji00708@naver.com

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