The court has ruled that the government must compensate the private operator Gyeonggi Railroad Co., Ltd., which operates the Shinbundang Line extension section (Jeongja Station to Gwanggyo Station), for losses of approximately 9 billion KRW over three years due to free rides for the elderly and disabled.
According to the legal community on the 4th, the Seoul Administrative Court Administrative Division 11 (Chief Judge Kim Jun-young) partially ruled in favor of the plaintiff in the compensation claim lawsuit filed by Gyeonggi Railroad against the government.
The Shinbundang Line extension section (Jeongja to Gwanggyo) opened on January 30, 2016. The implementation agreement at the time of opening stipulated that losses caused by the free ride system during the initial five years would be compensated up to 4.4% of the total demand, and from the sixth year, January 2021, the operation plan for free rides would be decided through consultation.
Accordingly, Gyeonggi Railroad requested consultations to decide the free ride plan from April 2020, the sixth year after opening, but the Ministry of Land, Infrastructure and Transport (MOLIT) refused, citing the need for public discussion and a study on the calculation method for free rides. From May 2022, Gyeonggi Railroad filed a fare change report applying regular fares to free ride beneficiaries, but MOLIT rejected the request, stating that the burden on the elderly and disabled and regional acceptance must be considered. Consequently, Gyeonggi Railroad filed a lawsuit against the government, claiming that MOLIT violated the implementation agreement.
The court ruled in favor of Gyeonggi Railroad. The judgment stated, "The government only conducted formal consultations regarding the free ride application plan but did not take substantive measures such as proposing alternatives for the operation of the free ride system and only forced the operation of free rides," and concluded, "Formal consultations alone cannot be considered fulfillment of the obligation."
Furthermore, the court stated, "Due to the government's breach of the consultation obligation under the implementation agreement in this case, the damages suffered by Gyeonggi Railroad are reasonably considered to be the amount of fares that could have been obtained if separate fares had been charged to free riders," and calculated the payment amount at approximately 9 billion KRW.
Both MOLIT and Gyeonggi Railroad have appealed this case, and the trial is currently ongoing at the Seoul High Court.
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