Seoul submits revised MOU amendment to city council with cost estimates; projected deficit of 13.5 billion won ($8.93 million) for 2024–2027; ridership and ancillary revenue rising monthly since full service resumed in March

A Han River Bus in service. [Seoul Metropolitan Government]
A Han River Bus in service. [Seoul Metropolitan Government]

The Seoul Metropolitan Government has estimated the initial operating deficit it must cover for Han River Bus operator Han River Bus Co. at approximately 13.5 billion won ($8.93 million). The city said ridership and ancillary revenue have been rising consistently every month since full service resumed across all routes in March, and that a return to profitability is possible as early as 2028.

The city announced Monday that it submitted a "Han River Bus Operating Project MOU Amendment Consent Motion" — which includes the cost estimate — to the Seoul Metropolitan Council on May 26.

According to the cost estimate, an operating deficit of approximately 8.2 billion won accumulated during the first two years of the project (2024–2025), which the city plans to pay out next year. A further deficit of approximately 5.2 billion won is projected for this year and next, and will be paid to the operator in 2028.

Under city ordinance, the Seoul Metropolitan Government may provide fiscal support when an operating deficit arises. The cost estimate document sets out the city's plan for providing that support.

"The operating deficit is expected to stem from initial investment costs, labor costs and low public awareness in the early stages of the project," the city said.

The city projected in materials released Monday that Han River Bus could turn profitable as early as 2028. "Although Han River Bus is an infrastructure project requiring large upfront capital investment, it has built a financially self-sustaining structure by leveraging ancillary commercial facilities at its piers," the city said. "Taking projected figures into account, a return to profitability is expected in 2029, meaning this is not a structure that requires prolonged fiscal support."

"Since full service resumed across all routes in March, monthly ridership and ancillary revenue have been consistently increasing — if the current trend holds, a turnaround could come as early as 2028," the city added.

Han River Bus launched operations in September last year and has seen a sharp rise in ridership since resuming full service in March. In May, passenger numbers exceeded 90,000, setting an all-time monthly record.

In the MOU amendment submitted to the city council, the city asked that the agreement be revised to allow it to cover costs associated with adding safety personnel.

Earlier, the city had sought to amend the MOU to include support for improving pier accessibility, but the city council rejected that proposal in April. The city subsequently drew up a revised agreement with a narrower scope of support.

"The original MOU amendment proposed expanding the range of operating deficit support to include shuttle bus operations and other items, but this revised version excludes costs such as free shuttle operations and instead makes detailed adjustments to labor costs for the legally required crew complement and additional safety personnel, in line with actual operating conditions," the city said.


ikson@heraldcorp.com