By Chung Hyun-cae



The Seoul Metropolitan Government (SMG) is considering raising subway and bus fares next year and investing more in upgrading public transport. The administration also wants to make up for rising deficits resulting from the growing number of elderly people eligible for free rides.



The city raised basic subway and bus fares from 900 won to 1,050 won in February 2012, the first increase in nearly five years. Prices of goods and services have also increased significantly over the past two years, further prompting the city to raise public transport fares.



The SMG subsidizes subway operators and bus companies, and the subsidies have soared over the years.



"To tackle the growing budget deficit, we have been looking for ways to secure greater financial resources," said Kim Saem-hyun, an official at the SMG's economic planning office.



"Raising public transport fares is the only viable solution to improve the city's financial situation."



Kim said it was unclear by how much the city might increase the fares. He said that fares would only increase enough to cover the operating costs of subways and buses.



It is two years and five months since the City Hall increased the basic public transport fare by 150 won to 1,050 won — the price for an adult using a transit card. For those who pay cash, the fare is 1,150 won for a single journey.



Subway and bus operators have been losing money as they cannot raise fares, despite the rising costs of fuel and labor. The number of fare dodgers has also increased, putting a further financial burden on the companies.



The city government makes up for the losses from its coffers.



"The free ride program for the disabled and elderly over 65, in accordance with the government's welfare program, has increased our financial burden,"Kim said.



The SMG wants the central government to cover half of the losses from the free ride program. But the central government has refused.



Kim said the city government would continue to demand that the central government provide financial support.



The free ride program cost the subway system 279 billion won in 2013. This is expected to rise to 287 billion won, according to the city government.



"Raising fares is the easiest way to improve the financial situation, but we will first seek other ways to secure more money,"Kim said.



The SMG is drawing up next year's budget and plans to evaluate existing projects and stop ineffective ones.



