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🇰🇷 South Korea /Economy & Trade

Seoul Pushes Again for 13.5 Billion Won Subsidy for Han River Ferry Losses

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Sources not specified New plan
  • Seoul is pushing again to subsidize the financially struggling Han River ferry service with 13.5 billion won over two years.
  • The city council previously rejected a similar proposal in April, but a revised version with reduced support is now being reconsidered.
  • Critics argue that public funds should not benefit private stakeholders in a company where a public entity holds a majority share, especially given the company's accumulated losses.

Seoul is once again seeking to provide 13.5 billion won in subsidies over two years to support the financially troubled Han River ferry service. The city council had previously rejected a similar proposal in April, but a revised plan, with reduced support and incorporating the council's feedback, has been resubmitted.

The revised proposal, which significantly reduced the scope of support in consideration of the council's review opinions, has been resubmitted.

— Seoul City OfficialExplaining the resubmission of the subsidy proposal after it was previously rejected.

Seoul submitted the "Han River Ferry Operation Business Agreement Amendment Proposal" to the city council on June 2nd, with deliberations scheduled for June 10th. The proposed subsidy amounts are 8.287 billion won for 2027 and 5.255 billion won for 2028, totaling 13.5 billion won, to be funded entirely by city taxes. This funding is largely intended to cover losses already incurred in 2024 and 2025, which amounted to approximately 1.1 billion won and 7.2 billion won respectively.

The core change in the revised proposal involves adjusting the criteria for calculating operating losses. The agreement now considers "minimum crew requirements under the Ship Crew Act and additional safety personnel agreed upon with Seoul City," expanding the scope for personnel costs compared to the previous "minimum crew requirements under the Seafarer Act." While the support for free shuttle bus operations, included in the April proposal, has been removed, the fundamental structure of using public subsidies to cover operating losses remains.

The minimum crew requirements under the Ship Crew Act and additional safety personnel agreed upon with Seoul City.

— Seoul City OfficialDescribing the adjusted criteria for calculating personnel costs in operating losses.

However, criticism persists regarding the use of public funds. The Han River ferry operator, Han River Ferry Co., is 51% owned by the Seoul Housing & Communities Corporation (SH) and 49% by private entity e-Cruise. Critics argue that injecting city funds indirectly benefits the private shareholder. As of the end of last year, Han River Ferry Co. had accumulated operating losses of 10.4 billion won, according to Financial Supervisory Service disclosures.

Injecting city funds into a company where a public institution holds a majority stake is not appropriate.

— CriticArguing against the use of public funds to subsidize the ferry service.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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