United Nations Public Service Awards Case Studies

The city of Seoul is highly populated with 10 million residents within an area of 605.33 ㎢. With its population density of 17,177/㎢, the city is facing various urban challenges including housing shortages, environmental degradation and traffic congestion similar to other metropolitan cities in the world. In particular, traffic volume from GyeongGi Province has heavily increased without any solution. Additional highway construction would require a large investment of capital not to mention the concerns and rejection by citizens mainly due to worries for environmental destruction. Road supply has reached its limit.

The most compelling issues are air pollution, inconveniences and various traffic accidents, caused by increasingly heavy traffic congestion. At this critical juncture, Seoul Metropolitan Government pursued a new transportation policy to encourage Seoul citizens to use public transportation such as subways and buses, which are environmentally friendly and more effective than automobiles to solve the overall problems.

Seoul has introduced an Integrated Distance-Based Fare System to all public transportation means as a part of its public transportation reform since July 2004. Before the Integrated Distance-Based Fare System, users had to pay for each and every transfer between subway stations and bus stations. The new system charges a fare based on the user's travel distance. The new system has eased the burden of citizens using the public transportation system.

The only remaining stumbling block was how to include GyeongGi residents into the system since a number of them commute between Seoul and GyeongGi Province. However, the existing law made it clear that decisions regarding public transportation fares is the sole responsibility of the head of the local administration. This left GyeongGi Province buses off the list. Accordingly, GyeongGi residents whose offices were located in Seoul (in average 400,000 people/day) were left out and their discontent grew worse. Seoul also needed to embrace GyeongGi buses within its reformed system not only to ease the burden for the disgruntled residents in GyeongGi Province but to encourage people to use public transportation rather than cars.

For that to happen, either Seoul or the GyeongGi administration had to provide financial subsidies in the form of discounts. How the two authorities should share this burden and whose system should have priority were issues where a mutual agreement was needed. The enactment of the Integrated Distance-Based Fare System was a long-cherished desire among users of the public transportation system in the Seoul Metropolitan area. Thus, it was evident that all efforts had to be made to resolve the issue.

What is the initiative about? (the solution)
With an extensive implementation of the Integrated Distance-Based Fare System, the competitiveness of public transportation was enhanced. Fewer cars on the roads led to good results; less traffic congestion and an improved environment including better air quality and energy conservation. It is noticeable that a partnership forged between Seoul and GyeongGi authorities made other joint projects possible, such as improving air quality. After an extensive implementation of the Integrated Distance-Based Fare System on July 1, 2007, a survey was conducted by an research institution to receive feedback from GyeongGi citizens. The result showed that 86% of the respondents answered, "The new system is helpful for using public transportation". And according to interview research conducted by the public opinion department of the Seoul Metropolitan Government, 91.3% of people commuting between Seoul and GyeongGi Province are "satisfied". Such a high level of satisfaction has encouraged both regions to share common interests in a positive way. For instance, 92.4% answered that housing shortages and environmental issues should be discussed from a greater perspective instead of only pursuing each party's own interests. Transportation records show that transfer between buses and subways in the Seoul area and buses in the GyeongGi area has increased 108% to an average of 683,547 transfers per day in October 2007 from 328,329 in November 2006, when the Integrated Distance-Based Fare System was not yet implemented. Data from the Seoul Metropolitan Police Agency shows that the number of vehicles coming and going between Seoul and GyeongGi has decreased by 12,588 per day from 2,698,675 per day in the first half of 2007 to 2,686,087 as of October 2007 since the extensive implementation of the Integrated Distance-Based Fare System.

Who proposed the solution, who implemented it and who were the stakeholders?
With the help of the research results of Seoul Development Institute, the Integrated Distance-Based Fare System was first implemented by Seoul City in July 2004 after two public hearings and through deliberations of the Bus Reform Citizen Council with representatives from civil groups, transportation organizations, workers and transportation experts. There were a number of requests from residents to extensively integrate GyeongGi buses with the new fare system together with the initial implementation in Seoul. Due to disagreement on main issues between the concerned parties, extensive implementation was delayed for one year until July 2007 when a new Seoul mayor took office, who pursued the policy in a creative way. Given that the new mayor Oh Se Hoon had signed a policy agreement for an Extensive Implementation of the Integrated Distance-Based Fare System on May 17, 2006 when he was running as a candidate for the post, he was well prepared to continue the negotiation process. He was able to compromise and accelerate the process from a larger perspective. With his aggressive efforts, the new public transportation system was enacted extensively as of July 2007. For this to happen, prior agreements were needed between the different public transportation organizations - Seoul Metro, Seoul Metropolitan Rapid Transit Corp., Incheon Rapid Transit Corp., Korea Railroad, Seoul Downtown Bus, Seoul Town Bus, GyeongGi Downtown Bus, GyeongGi Town Bus - and the system management companies including Korea Smart Card Co., Ltd. EB Co., Ltd. as well as Seoul and GyeongGi authorities. Public officials including the Seoul transportation director has made unwavering efforts for the mutual agreement among each of the parties involved.

Describe how and when the initiative was implemented by answering these questions
a. What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
The long awaited extensive implementation was successfully achieved within a relatively short period of one year after the newly elected mayor took the initiative for a series of new strategies. Firstly, a balance between top-down style and bottom-up style management could accelerate the implementation process. Generally, public organizations have a top-down decision making process as lower officials report upward. Seoul City Hall is not an exception. However, when it came to the extensive implementation of the Integrated Distance-Based Fare System, the mayor of Seoul, in his capacity as the top decision maker, and the governor of a province agreed on the basic principles, while officials in charge including the transportation directors held discussions in detail. Then the final agreement was made between the mayor and the governor accelerating the implementation process. Secondly, batch processing was applied. In other words, the negotiating parties were closely connected with each other as needed to achieve a Win-Win result. Seoul City and GyeongGi Province authorities each made compromises; Seoul willingly takes the financial burden caused by revenue loss; GyeongGi willingly cooperates in the field of air quality improvement and water quality improvement. These where concerted efforts needed on a metropolitan scale. Thus, a final agreement could be reached. Thirdly, a broad view was taken for problem solving. The most pressing issue with regard to the extensive implementation of the Integrated Distance-Based Fare System was how to share the revenue loss caused by discounts. By pursuing a simultaneous policy to encourage the public to use mass transportation, Seoul City could minimize its financial burden. Lastly, every party concerned reached a satisfying agreement by respecting the other stakeholder and cooperating actively in the work. One on one negotiation came first when it was time to discuss important technical issues involving multiple stakeholders, such as public transportation organizations and system management organizations. Serious issues in dispute were resolved through an active participation of Seoul City and GyeongGi Province authorities.

b. What were the key development and implementation steps and the chronology? No more than 500 words
The extensive implementation of the Integrated Distance-Based Fare System integrated GyeongGi Province with the Seoul public transit system. Much discussion was needed as there were many organizations involved and a number of sensitive issues. Following is the chronological order of the process. ○ December 8, 2006: A joint agreement regarding Seoul Metropolitan area issues was concluded The Seoul mayor and GyeongGi governor made a commitment to make joint efforts for traffic, water quality, air quality improvement while agreeing on basic principles. ○ January 12, 2007: Data sharing and analysis of transportation card records between Seoul and GyeongGi province The parties shared and analyzed each other's proprietary documents in a concerted effort to analyze the size of revenue loss, and the interests of relevant organizations at stake. ○ January 23, 2007: Agreement on financial burden sharing of revenue loss between Seoul Bus and GyeongGi Bus Both parties agreed to receive financial aids from each respective local government. ○ February 12, 2007: Discussions held regarding how to estimate and share the financial losses caused by the transfer between GyeongGi Bus and Seoul Subway ○ March 7, 2007: Proposal for a detailed bill for other fields such as the environment Proposed and discussed a detailed bill for environmental issues including air quality improvement measures and transportation issues at the same time. ○ March 8, 2007: A technical consultative body and operation plan was established ○ April 18, 2007: Discussions held for creating an integrated adjustment system ○ May 22, 2007: 10 weekly technical meetings held between adjustment companies (KSCC, eB) (1/week) ○ May 29, 2007: Discussions held for operation date and final issues ※ Occasionally held Seoul City and GyeongGi Province senior level meetings ○ June 8, 2007: Announcement made regarding a joint agreement for extensive implementation of the Integrated Distance-Based Fare System ○ July 1, 2007: Extensively implemented the Integrated Distance-Based Fare System

c. What were the main obstacles encountered? How were they overcome? No more than 500 words
Who should burden the revenue loss due to discounts? How to share the burden? Which fare system should be applied? How to allocate the income? These were the most pressing issues with regard to the new system. Seoul City decided to maintain its existing fare system, income distribution system, and distribution organization while it decided to embrace the income sharing system proposed by GyeongGi Province. This means that each local self government administration will be responsible for the revenue loss caused by transfers between buses. GyeongGi Province will be responsible for 60% of the revenue loss caused by transfers between GyeongGi buses and Seoul subways, and the subway operating organization will be responsible for the remaining 40%. Under this burden sharing system, Seoul City will be financially responsible for about 20 billion Won per year. At the same time, city authorities are making efforts to increase public transportation revenue by pursuing mass transportation encouragement policies while discouraging the use of cars.

d. What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
Due to the extensive implementation of the Integrated Distance-Based Fare System Seoul City is financially obliged to deal with a revenue loss which amounts to about 20 billion Won per year. However, this sum is inevitably needed to provide discounts to public transportation users in the Seoul Metropolitan area. Improving the competitiveness of mass transportation leads to less use of cars and increased use of public transportation. Given the possible cost reduction from decreased traffic congestion, increased energy conservation, and other environment improving effects, the gains will certainly outweigh any losses. 20 billion Won can be shouldered by taxes, which again burden citizens. However, it is possible to receive the support of the citizens by explaining the general idea as previously outlined. During the process, technical issues were not a problem. Rather, the administrative approach and the enforcement style played a bigger part. This report also explains the role and approaches of the administration which made the system possible rather than making an assessment of the system.

Is the initiative sustainable and transferable?
The extensive implementation of the Integrated Distance-Based Fare System has earned a reputation as a role model to other cities and Seoul City was selected as the most excellent Win-Win organization among all local self governments. Cities with the Integrated Distance-Based Fare System or similar systems now can directly refer to the example of Seoul. As the importance of public transportation is ever more increasing, a number of big cities such as Beijing are expected to introduce transfer fare discount systems to increase the competitiveness of mass transportation. Therefore, the Seoul case is highly likely to get a reputation as a useful model in the near future. Aside from the introduction of a public transportation fare system, many other countries where administrative areas do not correspond with real life zones could benefit from Seoul's strategy. This is especially the case when they need to resolve issues involving more than one administrative organizations in a one-day living zone.

What are the impact of your initiative and the lessons learned?
The extensive implementation of the Integrated Distance-based Fare System realized regional integration administration which removed a partition between administrative zones and transportation means in the transportation field. Under the system, people living in a one-day life zone can use and transfer between buses and subways in the Seoul Metropolitan area at an affordable price regardless of the administrative zone, even when a concerned governor is responsible for the bus and subway fare system. This report can be a good example of conflict resolution between local self governments through "give and take.". It shows that a Win-Win partnership can be forged between cities and provinces by jointly pursuing policies that require cooperation; Seoul can help GyeongGi in the transportation field, while GyeongGi can help Seoul in the environment field, etc. Besides, this report proposes an approach from a broader perspective that can be applied to other important issues. The main beneficiaries of the extensive implementation are Gyeongi residents, as approximately 70% of GyeongGi residents commute between Seoul City and GyeongGi Province via mass transportation. However, Seoul City offered to share the financial burden for the common interests of the one-day life zone, including reduced traffic congestion, improved energy conservation and a better environment. The partnership forged between Seoul City and GyeongGi Province during the process of extensive implementation of the Integrated Distance-Based Fare System has grown and helped resolve other metropolitan issues including environment, social welfare, in addition to transportation. In the same context, it can also contribute to the welfare improvement of residents in both areas through an extensive enforcement on a sustainable basis.


Institution Name:		Seoul Metropolitan Government
Institution Type:		Government Department
Contact Person:		Ji Young Kim
Title:		Assistant Director
Telephone/ Fax:		82-2-6321-4283
Institution's / Project's Website:		82-2-3707-9729
E-mail:		everaft@hotmail.com
Address:		38 Seosomun-dong, Jung-gu, Seoul, 100-739, Korea
Postal Code:		100-739
City:		Seoul
State/Province:
Country:

The Problem

Solution and Key Benefits

Actors and Stakeholders

(a) Strategies

(b) Implementation

(c) Overcoming Obstacles

(d) Use of Resources

Sustainability and Transferability

Lessons Learned

Contact Information