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Lessons from Seoul's controversial privatized subway line

seungylee14.substack.com

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Re: Lessons from Seoul's controversial privatized subway line

#31

Post by [deleted] »

mlindner wrote: post #16
snidane wrote: post #3

Great article. Introducing privatization into networks and expecting solving the centralized government laziness by markets ia a bit naive since on networks you won't have competition. You are only introducing a market of 1 monopolistic player. At that point thr outcome is the same - the uncompeted excess profits being eaten by a corrupt government or by a monopoly company. If you want competition on networks then co…

Japan has multiple lines that go between the same stations that are privatized. Works perfectly fine there.

[deleted]

Re: Lessons from Seoul's controversial privatized subway line

#33

Post by lifthrasiir »

dnautics wrote: post #7

I don't understand why the operation of the line wasn't tied to performance along certain metrics, like "percentage of cars at overcrowding", customer satisfaction, etc. Annual review, Drop below acceptable threshold on any of these metrics and it triggers a rebidding process and someone else gets to run the line.

The canonical answer is of course the 1997 Asian financial crisis. The crisis greatly strained governmental and municipal budget available for pretty much every public infrastructure and the 1998 Act on Private Investment in Social Overhead Capital Facilities (사회간접자본시설에 대한 민간 투자법) was introduced to fill this gap. The problematic minimum revenue guarantee stems from this law, originally intended to encourage private investment, and while the law was subsequently fixed in 2006 many infra projects built around 2000 including the Seoul Subway Line 9 still suffer from its consequences.

Re: Lessons from Seoul's controversial privatized subway line

#34

Post by actionReaction »

bjeds wrote: post #9

I have a hard time following this article because it's so obviously one-sided and ranting. FWIW the Stockholm Metro is also privatized in the sense that operation, planning and maintenance is done by MTR Corporation, the same company that owns and operates the Hong Kong Metro. MTR also operate a lot of other subway systems in the world, for example Sydney. I don't see any problems inherit in the privatization: Stockh…

I was so confused of the flow of writing and one sentence made me understand what just happened. "I grew up in Seoul in the 1990s before coming to the United States, so I missed all of Line 9’s construction and operations." The media in South Korea have criticized any privatization of public service for so long time. Trust me I have lived in this country more than 25 years. Even though author asserted that "I will list all sourcing as best as I can, all from media outlets in South Korea (of both left and right political leanings) I have vetted and determined as legitimate." Yes, the sources of articles are from both left and right leaning but the thesis of this post is villifing semi-privatization of Line 9. To me, the cause of Line 9 chaos is not from privatization but from the intervention of political campaign in this problem. Conservatively expected passenger numbers can go wrong, but they must not make mistakes on back-up plans, and they just did make mistakes on purpose for the sake of winning election.

Re: Lessons from Seoul's controversial privatized subway line

#35

Post by em-bee »

scaramanga wrote: post #20
snidane wrote: post #3

Great article. Introducing privatization into networks and expecting solving the centralized government laziness by markets ia a bit naive since on networks you won't have competition. You are only introducing a market of 1 monopolistic player. At that point thr outcome is the same - the uncompeted excess profits being eaten by a corrupt government or by a monopoly company. If you want competition on networks then co…

Yes, it should be noted that if you live in somewhere like the UK or the US, the "bad" lines, 9 and 2, are technical and organisational marvels with no parallel in your country. From the end user standpoint they operate amazingly well. They're cheap, clean, safe, reliable, convenient. They're crowded at rush hour. Line 9 is so crowded at rush hour that there was this one time, a few weeks ago, that I wasn't able to g…

in beijing at rush hour you line up at a train door, and you see two or three trains stop, allowing the first few people at the head of the line to enter, before you make it to the head of the line so you then can enter the third or forth train.

Re: Lessons from Seoul's controversial privatized subway line

#36

Post by em-bee »

aga98mtl wrote: post #24

I'm confused by the article. The main problem is that the line is too popular because the government under estimated ridership? How does this have anything to do with it being privatized? When they tried raising prices the city fought them? Should you not raise pricing when you have more customer than capacity?

depends on your goals. when prices are raised then the poorer segments of the population, who are usually the ones that need public transport the most, may not be able to afford to ride.

it's one thing to raise prices to cover costs, but quite another to raise them to reduce congestion.

Re: Lessons from Seoul's controversial privatized subway line

#37

Post by inglor_cz »

HarryHirsch wrote: post #12
dnautics wrote: post #7

I don't understand why the operation of the line wasn't tied to performance along certain metrics, like "percentage of cars at overcrowding", customer satisfaction, etc. Annual review, Drop below acceptable threshold on any of these metrics and it triggers a rebidding process and someone else gets to run the line.

In Britain the government solicits bids to run the trains, and what a shambles it is. For two months, the wife was commuting weekly between Cambridge and Edinburgh, and the train wasn't on time even once. And then we move to Edinburgh, also by train, and everyone gets to take the bus from Berwick onwards, because the engine of the previous train had actually caught on fire, blocking the tracks. It seems that with lar…

"and the train wasn't on time even once."

Train delays are often caused by overloaded infrastructure, trains waiting on red because the line in front of them is occupied. Maybe the government didn't build enough tracks for contemporary commuter demand? Two tracks aren't enough on main commuter lines anymore.

(The core of the issue is that once trains of differing speeds - e.g. regular trains that call at every station vs. expresses - share the same track, they will interfere with one another. This does not happen on subways, where every single train stops everywhere and never overtakes another train.)

Re: Lessons from Seoul's controversial privatized subway line

#38

Post by sokoloff »

em-bee wrote: post #36
aga98mtl wrote: post #24

I'm confused by the article. The main problem is that the line is too popular because the government under estimated ridership? How does this have anything to do with it being privatized? When they tried raising prices the city fought them? Should you not raise pricing when you have more customer than capacity?

depends on your goals. when prices are raised then the poorer segments of the population, who are usually the ones that need public transport the most, may not be able to afford to ride. it's one thing to raise prices to cover costs, but quite another to raise them to reduce congestion.

In this case, it’s presumably (at least in part): raise prices to be able to pay for more rolling stock that the government doesn’t want to finance because part of the benefit will accrue to the private operator.

If a government doesn’t want a private operator to be able to turn a profit on an incremental investment, that government shouldn’t be surprised when they decline to make that investment.

I agree that in the long-run, one shouldn’t raise prices one public transit just to curb demand (although in the short-term, that’s better than running an unsafe-to-the-public operation).

Re: Lessons from Seoul's controversial privatized subway line

#39

Post by matthewdgreen »

aga98mtl wrote: post #24

I'm confused by the article. The main problem is that the line is too popular because the government under estimated ridership? How does this have anything to do with it being privatized? When they tried raising prices the city fought them? Should you not raise pricing when you have more customer than capacity?

I think what the author points out is that there’s a problem with leadership and accountability here. Subways are an essential city utility, and citizens expect them to meet certain standards (capacity, pricing, etc.) and then will elect political leaders who are accountable to those standards. If subways are publicly run those leaders have some authority to make changes, as well as to be held fully responsible by voters if things don’t work. (Not saying this system is perfect either.)

In this particular flavor of privatized system, citizens still have the same expectations of functional infrastructure. (A subway line is, after all, a city project even if the city chose to outsource it to private interests.) So they will elect leaders to address perceived problems, except that the leaders won’t have full authority to change things. At the same time the private firm won’t have full control over pricing and won’t be incentivized to improve service. Hence the example of a private line wanting to raise prices and being blocked by the city, but the city leaders being unable to take direct action to improve the service itself.

Presumably there are ways to implement private provision of public services that don’t end up like this. I would imagine the key is not handing control to private interests who can’t ultimately be held accountable. This article illustrates one of the bad outcomes.

Re: Lessons from Seoul's controversial privatized subway line

#40

Post by More-nitors »

aga98mtl wrote: post #24

I'm confused by the article. The main problem is that the line is too popular because the government under estimated ridership? How does this have anything to do with it being privatized? When they tried raising prices the city fought them? Should you not raise pricing when you have more customer than capacity?

well the author complains "the employees per every kilometer of rail" is low...

But the author doesn't actually mention '신분당선 (new-bundang line)', which doesn't even have train drivers (automated)...

And the main reason line9 being crowded is: it goes through gangnam! of course it's crowded.

Lastly, the stations are built to accommodate +2 extra cabinets (6->8), which is the lowest hanging fruit... (even the screen doors installed for those cabinet places) ...so "economically infeasible to add more cabinets" doesn't seem to make sense to me...

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