This bankruptcy of the light rail in Uijongbu is completely unsurprising because of how unnecessary it was. It is very easy to get around Uijongbu via the bus system that made the light rail a redundant form of transportation that would never meet the expected daily usage rate that was projected. According to the article the U-Line needs 118,000 people a day to ride it to break even and last year they only had 35,000 a day:
A light rail train runs on the Uijeongbu Line, Gyeonggi. The Uijeongbu Light Rail Transit Company filed for bankruptcy on Wednesday. [UIJEONGBU LIGHT RAIL TRANSIT COMPANY]The Uijeongbu Light Rail Transit Company filed bankruptcy to the Seoul Central District Court on Wednesday after just four and a half years, as the light rail failed to draw enough commuters and was insolvent for years.
The board members of the light rail company unanimously agreed on Wednesday to file for bankruptcy after its debt rose beyond 240 billion won ($200 million) at the end of last year.
The light rail trains, smaller in size and shorter than subway trains, run on the Uijeongbu Line, or U Line, in Uijeongbu, Gyeonggi. The railway stretches 11.1 kilometers (6.9 miles) from Balgok Station to Tapseok Station. The light rail opened on July 1, 2012, and was expected to draw nearly 80,000 commuters a day in its first year, according to figures obtained by the company from a consulting agency.
Only a daily average of about 10,000 used the light rail on its first year, and by the end of last year, the daily reached some 35,000. To break even, the business needed about 118,000 people daily.
“The company needs to make 45 billion won a year to operate the railway, but it’s scraping in only 15 billion won a year on average,” said an employee of the company.
Five financial institutes, including KB Kookmin Bank, lent some 352 billion won as operating funds to the Uijeongbu Light Rail Transit Company. The group sent an official letter to the company on Jan. 2, requesting that it shut down the business. [Joong Ang Ilbo]
You can read more at the link, but the Uijongbu city government is vowing to keep the light rail running which means the public will be picking up the annual operating losses.
Just like government pork around the world it will be propped up by tax payer dollars. Once government projects or programs start, they will never be de-funded.
Just like government pork around the world it will be propped up by tax payer dollars. Once government projects or programs start, they will never be de-funded.