Seoul City Council approves revised agreement for Han River ferry operator support

The Seoul City Council has approved a revised agreement that allows for financial support to the operator of the Han River ferry service. The decision, passed on Tuesday with 63 votes in favor and 19 against, opens the door for covering operational losses, including expenses related to extra safety personnel required for the ferries' safe operation.

Under the revised agreement, the basis for calculating operational losses will be expanded. Previously, the calculation only included the minimum crew mandated by maritime law. The new terms now encompass the minimum crew plus additional safety personnel that Seoul City has agreed upon. Currently, each Han River ferry operates with a four-person crew, including a captain, engineer, sailor, and an additional safety crew member.

However, the council's Environment and Water Resources Committee had previously stipulated that additional personnel costs incurred without prior consultation with the city council should be excluded from financial support. This condition aims to prevent retroactive compensation for costs incurred before the revised agreement. Concerns were raised during the committee's review about the city's failure to consult the council beforehand, despite an estimated annual increase of 600 million won in expenses due to the inclusion of additional personnel.

The city of Seoul is proposing to allocate funds for the operational losses from 2024-2025, totaling 8.287 billion won, in the 2027 budget. An additional 5.255 billion won for losses incurred in 2026 and 2027 would be allocated in the 2028 budget, bringing the total proposed support to approximately 13.5 billion won. This amount is subject to further review and approval.

Despite the city council's approval of the revised agreement, the final amount of financial support is not yet confirmed. The operator must submit annual loss calculations to Seoul City, which will then review them based on external accounting audits and professional cost analyses. The proposal must also pass through the Han River Ferry and Eco-friendly Ship Support Review Committee, followed by the city's budget formulation process and final approval by the city council. The operator's own operational failures or losses from ancillary businesses will not be included in the calculation, and subsidies may be reduced if inefficient management is identified. Debates over the appropriateness of the financial support are expected to continue, especially as Seoul City's estimated losses have significantly increased from 4.164 billion won in March to 13.5 billion won.