Challenges of Subway Operation by PPP in Seoul, Korea
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Challenges of Subway Operation by PPP in Seoul, Korea GyengChul KIM Ph.D., P.E. President , Korea Transport Institute(KOTI) [email protected] +82-31-910-3005 Take Transit, Enjoy more time for your Life 1 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 1 Table of Contents 1. Korea Transport Institute(KOTI) 2. Subway construction and operation in Seoul 3. Case Studies : PPP model of Subway line 9 4. Lesson and Learned Take Transit, Enjoy more time for your Life 2 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 1 Korea Transport Institute Take Transit, Enjoy more time for your Life 3 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 1 Korea Transport Institute Function and Role Research & Policy Institute Total numbers : 298 persons on Transport and Logistics - Research fellows 260(87%) Aeronautics 2(2.4%) Business/Publi Role as a National Think-Tank c Affair 6 (7.3%) - Developing transport strategies and future Logistics 6 PhDs: (7.3%) technologies to create a new growth engine 87 Economics 7 Mscs : (8.5%) 211 Urban Global Transport Cooperation Traffic Planning 7 Engineering (8.5%) - Managing a Knowledge Sharing Program 45 (55%) and promoting global cooperation 4 4 녹색성장시대의 경기도와 자전거도로 4 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 1 Korea Transport Institute Relationship with the Korean Government Budget support from the national and local governments only Prime Minister’s Office NRCS Commissioned Research Local MLTM Government KOTI Commissioned Policy Support Research 5 녹색성장시대의 경기도와 자전거도로 5 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 1 Korea Transport Institute Policy development and Research Areas Urban Transport Railway Traffic Safety Highway and Disaster Aviation Transport Prevention Logistics Economics National Strategy Government Project Transport R&D Transport Policy Evaluation Take public transport, enjoy more time for life 66 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 1 Subway construction and operation in Seoul Take Transit, Enjoy more time for your Life 7 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 The 1st Subway Project Gyeongwon Line Seoul Station↔Cheongnyangni Station (Connected with Subway) 71.4~74.8 Subway Line No. 1 Japan Tech. Left heading Cheongnyangni Station Seoul Station Gyeongin Line Gyeongbu Line Take Transit, Enjoy more time for your Life 8 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 The 2st Subway Project Subway Line No. 3 Line 1--44 Subway Line No. 1 Down 135Km town Yeong- Subway Line No. 2 Dong, Yeong- Jamsil ’70-’80s Deung- po Subway Line No. 2 ; Circle 48.8Km Subway Line No. 4 Japan Yamanote : 34.5km Take Transit, Enjoy more time for your Life 9 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 Poor quality service of bus in 80-90’s Take Transit, Enjoy more time for your Life 10 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 Line 5--88 Subway Line No. 7 North- East 155 Km Area North- ’80 - 2000 East Subway Line North- Area No. 6 west Subway Line No. 5 Area Gang- Down seo town Gang- dong Yeoeui- do South- Gang- west nam Jamsil Area Subway Line No. 8 Seong- nam 11 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 Mode share & Operation (2008) Transportation mode share % Operation Bus Subway 60 Automobiles Line No.1~4 Line No.6 50 Line No.7 Seoul Metro 40 Line No.7~8 Downtown Rush Hours Line No.5 30 56% Uses Subway Line No.5~8 20 Line No.2~4 10 Line No.1 SMRT 75 80 85 90 95 20002003 Operating Speed 30 ~36 km/h 8 Lines Total Length of 287km Passengers Stations 263 Units 6.5 million / day Take Transit, Enjoy more time for your Life 12 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 Cost effective OPERATION ? Why do SMG make another operation company? 1) Competition each other : To reduce operation cost Self-learning Public Company 2) Labor’s strike : Alternatives for continuous service 13 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 1 Historical Review # of Passengers and Operation cost Take Transit, Enjoy more time for your Life 14 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 Only one provider(bus) at the market in good days □ 30~40 years’ ago(‘60-70), public transport is only one service for moving ; no need to promote it…… Take Transit, Enjoy more time for your Life 15 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 New shop(Private car) was opened □ But strong rival came to the market : private car …… Take Transit, Enjoy more time for your Life 16 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 S-Metro has not been a good provider □ People want competitive public transport service ; - easy to use, - cheaper cost than car - comfortable - less travel time than car - safe ST METRO(95.7 min) ST Travel Time : 72.25 min egress Access 10.42 min 13.03 min AUTO Travel Time : Origin 45.9 min Destination (Ansan) (CBD) AUTO (45.9 min) Door-Door □ But failed to satisfy buyers (users) with enough money to buy their own car…. Take Transit, Enjoy more time for your Life 17 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 Have we been a good shopkeeper? □ Registered vehicles Increase: 50 times - 1970 : 60 thousands, 2010 : 2.98 millions [Registered Vehicles in Seoul] 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Year No. of Registered Vehicles 1970 1975 1980 1985 1990 1995 2000 2005 2010 Take Transit, Enjoy more time for your Life 18 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 Another new shop(BRT) was opened If Bus and Subway travels as same speed, which do you prefer? BRT = +27km/h, HOV = + 80 km/h Take Transit, Enjoy more time for your Life 19 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 Seoul has constructed a subway network of 287km (1971-2000). Construction of Subway (km) Stage 1 Stage 2 7 300 6 250 8 • Lines : 1/2/3/4 5 200 • Lengths : 135km 150 4 3 • Lines : 5/6/7/8 100 • Lengths : 152km 2 50 1 1974 1979 1984 1989 1994 1999 2004 Take Transit, Enjoy more time for your Life20/49 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 But also increase of passengers was not much as expected… Inefficient in investment ? (%) 80 Mode Share Trend 60 Bus 40 Subway 5%↑ 20 Line 5/6/7/8 are 28%↑ added (152km) 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 - # of passengers below expectation : for line 5, 23,000 passenger/km expected → 11,000/km realized - Operation cost for each trip of subway and bus: $1.148 vs. $ 0.7 21/49 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 But also increase of passengers was not much as expected… Increasing debt on subway (Bil. USD) (USD) Fare 5,000 0.7 Debt 0.6 4,000 0.5 3,000 0.4 2,000 0.3 0.2 1,000 0.1 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Major stress on municipal financial status - 87% of total debt, caused by subway - Construction and operation cost/km= 100 Mil. USD - Pressure on fare increase Take Transit, Enjoy more time for your Life 22 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 Background for Private Investment Project • SMG Debt in 1999 (Seoul Metropolitan Government) (Unit: billion won) Debt related to Subway Total Debt of SMG (construction + operation) 5,560 4,846 (87.15%) → Requires new approach for future subway construction → Private Capital Inducement (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 Subway Challenges • Competition with private CAR and BUS • High -Operating Costs • Low Customer Satisfaction • Unsustainable Finances * S-Matro : deficit 211,400m Kwn(2011), Cost/p = 1049Kwn, A average fare /p= 725Kwn Challenges : Operation cost with Attractiveness Take Transit, Enjoy more time for your Life 24 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 SMG(Seoul Metropolitan Government)’s decision Productivity UP, Reduce Operating COST SMG decided to invite private partners for the new line: Why? set benchmark for public operators 25 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 1 Sustainable Operation ? CASE STUDIES Seoul line #9 PPP project Take Transit, Enjoy more time for your Life 26 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 Subway Line No. 9 Phase 1 (25.5km) Phase 2 (12.5km) 2001.12 ~ 2008.12 Post-construction Gimpo Airport Yeoeui- do Bang-i- COEX dong Express Terminal Take Transit, Enjoy more time for your Life27 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 Installs Passing track at Subway (1) (2) (3) (4) A 열차 B 열차 ISSUE (Attractiveness) : Speed-up Take Transit, Enjoy more time for your Life 28 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 Track Layout plan Expected Speed Express : 50 k/h (30min) Local : 32 k/h (50min) A 열차 B 열차 29 (C)Dr. GyengChul KIM, Institute for Transport Policy Studies, 2013 Operation Method : Alternation of All---stop / Skip---stop Express #901 #902 #925 Gaehwa Sta.Kimpo Airport Sta. Shinnonhyun Sta. Express : about 30min, only stops at 9 stations Regular : about 53min, stops all 25 stations Number of Operating Vehicle : 96 cars (24 trainsets4 cars))) 156 trains by 2011 (26 trainsets 6 cars) 216 trains by 2013 (36t rainsets 6 cars) 30 (C)Dr.