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Seoul city plans to merge two subway operators

All Headlines 14:44 December 10, 2014

SEOUL, Dec. 10 (Yonhap) -- The Seoul metropolitan government said Wednesday it will incorporate two city-run operators of the capital's subway service by 2016 in an effort to enhance management efficiency.

Currently, the Seoul Metro, established in 1974, runs the capital's subway lines No. 1-4, while the Seoul Metropolitan Rapid Transit Corp. operates the lines No. 5-8. The latter was set up in 1994 so that the two firms could compete with each other to provide better service.

But the system has come under criticism for causing management inefficiency such as overlapping work and additional costs arising from separate purchases of office supplies.

"We will conduct a sweeping reform, changing everything except manpower, of the two mass transit operators that have not been free from the criticism for poor and sloppy management," Mayor Park Won-soon told reporters.

The city government said the merger will help improve the two companies' financial difficulties and enhance their global competitiveness by making the merged company the world's largest mass transit service provider.

The combined debt of the two subway operators stands at 4.6 trillion won (US$4.18 billion), with nearly 1.6 trillion won being spent on replacing aged facilities annually.

The new company will operate the subway lines with a combined length of 300.1 kilometers and a transport capacity of 6.8 million people a day, according to the city government.

However, there will be no layoffs of workers or restructuring in the process of unifying the two companies, it said.

sshim@yna.co.kr
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