United Nations Public Service Awards Case Studies

Seoul is a densely populated city with over 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 inflow from Gyeonggi Province continues to increase. The construction of new roads is hardly an option due to high costs as well as the resistance by the environment-conscious public.

The ever worsening traffic congestion is causing increased inconvenience, traffic accidents and air pollution and effective countermeasures are needed. To alleviate the problem, the Seoul Metropolitan Government is pursuing a new policy that encourages the citizens in Seoul to choose public transportation such as subway or bus, which are more cost-effective and eco-friendly compared to automobiles.

The Integrated Distance-Based Fare System was introduced in July 2004 for the entire public transportation system of Seoul as part of the city’s reform of public transportation. With the implementation of the new fare system, Seoul’s public transportation became more competitive while reducing the financial burden borne by the citizens.

<The Integrated Distance-Based Fare System >
The Integrated Distance-Based Fare System (“the System”) charges an integrated fare based on the commuter’s travel distance regardless of the number of subway-to-bus or bus-to-bus transits. After the introduction of the System, the average fare per travel decreased to KRW622 per commuter from KRW673.

Seoul and Gyeonggi Province are geologically close and thus have mutual commuters numbering some 400,000 a day. However, the buses whose routes include Gyeonggi areas were excluded from the System, as Seoul and Gyeonggi Province failed to reach an agreement. This setback caused grievances for the people traveling between the two regions.

While the System could be expanded to include the subway and bus networks of the greater metropolitan area in 2007 thanks to the continuous consultation of Seoul with Incheon and Gyeonggi Province, the express buses running between downtown Seoul and the greater metropolitan area with a basic fare 1.8 times higher than that of ordinary buses were excluded, again because of the delay in the establishment of pricing and revenue allocation principles.

Consequently, the final stops of the express buses were concentrated to limited areas of downtown Seoul forcing red bus passengers to transfer to go to a different destination. The concentration also aggravated traffic congestion in downtown Seoul, which, in turn, slowed down the operation of red buses. Although dozens of additional buses were put into the express routes for a regularly spaced bus-to-bus interval, passengers were experiencing severe congestion during rush hour and the annual reduction in the automobile influx into Seoul was negligible.

What is the initiative about? (the solution)
After the Integrated Distance-Based Fare System (“the System”) was expanded to the greater metropolitan area, the volume of transit between the Seoul subways/buses and the Gyeonggi buses increased by 108 percent to a daily average of 683,547 cases as of October 2007 from 328,329 cases in November 2006, while the number of automobiles commuting between Seoul and Gyeonggi Province decreased by a daily average of 12,588 to 2,686,087 vehicles per day as of October 2007 from 2,698,675 in the first half of 2007. The System became complete when it was expanded again in 2008 to include the Seoul-Gyeonggi express buses, amplifying its positive contribution to easing traffic congestion, relieving household financial burdens, improving air quality and reducing energy consumption. The Seoul Metropolitan Government conducted an interview survey on 493 express bus passengers one month after the completion of the System. About 80 percent of the respondents answered that they were satisfied with the System, while 51 percent replied that the System substantially lightens the financial burden of households at this time of high oil prices and concerns about a financial crisis. The survey also found that about 55 percent of the respondents who had used their own car frequently now use the express buses more often than their own car, a result confirming that the buses are taking root as a primary traffic mode within the greater metropolitan area. In another survey on the travel times of the 35 express bus routes that were adjusted in accordance with the expansion of the System, 34 percent of the respondents answered that the travel times were reduced. In addition, the number of express bus passengers grew by a daily average of 50,000 people, an over 9-percent increase, from about 600,000 to 653,874 people in just one month since the expanded implementation of the System. Also, the total number of transit passengers increased by 50 percent to 330,000 during the same period.

Who proposed the solution, who implemented it and who were the stakeholders?
Since the Seoul Metropolitan Government launched the Integrated Distance-Based Fare System in 2004, there were continued requests from the citizens to expand the System to include the Gyeonggi buses. After Mayor Oh Se-hoon took office in July 2006, the Seoul Metropolitan Government spearheaded the negotiation with Gyeonggi Province and bus/subway service providers to reach an agreement on the expansion of the System at the earliest possible date by inducing mutual concessions. As a result, the System was expanded to the greater metropolitan area in July 2007. The System could be applied to the Seoul-Gyeonggi express buses in 2008 after continuous working-level consultations and devising of strategies based on the analysis of usage pattern and other related data. For an expanded implementation of the System, an agreement had to be reached not only by the governments of Seoul and Gyeonggi Province but also by public transportation operators – Seoul Metro, Seoul Metropolitan Rapid Transit Corporation (SMRT), Incheon Rapid Transit Corporation (IRTC), Korea Railroad (KORAIL), Seoul Downtown Bus, Seoul Town Bus, Gyeonggi Downtown Bus, and Gyeonggi Town Bus – and the system management companies including Korea Smart Card Co., Ltd. and eB Co., Ltd. For this to happen, public officials of the Traffic Operation Information Service (TOPIS) and other relevant organizations made unwavering efforts.

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 successful expansion of the Integrated Distance-Based Fare System to the greater metropolitan area in July 2007 was possible thanks to several new strategies in terms of public administration. First of all, the Seoul Metropolitan Government could bring forth the expanded implementation of the System in a process where the top-down and bottom-up decision making methods were effectively combined. This process started with a preliminary agreement between the final decision makers (the Seoul Mayor and the Gyeonggi Governor) on the guiding principles. Then working-level consultations followed on specific details. The process reached a conclusion with the final agreement between the final decision makers. Second, the Seoul Metropolitan Government could strike a win-win deal through mutual concessions: Seoul agreed to compensate for the revenue decrease associated with the expanded implementation of the System in return for Gyeonggi Province’s concessions regarding issues such as air and water quality improvement which required close cooperation of the Gyeonggi authorities. Based on the mutual trust built in the course of the System’s expansion, Seoul could apply the System to the Seoul-Gyeonggi express buses in 2008. In addition, the city of Seoul proposed a plan to promote public transportation by measures enhancing the infrastructure such as the subway station-oriented reform of bus routes and the construction of transit centers, helping the authorities and public transportation service providers of Gyeonggi Province participate actively in the consultation for a more passenger-friendly fare system without concerns about revenue losses. It is also noteworthy that the Seoul Metropolitan Government succeeded in drawing support from the greater metropolitan area residents for the expansion of the System by actively advertising the merits of the System.

b. What were the key development and implementation steps and the chronology? No more than 500 words
It was inevitable to expect increases in the financial burden of the Seoul and Gyeonggi Province governments once the System was expanded. In particular, new principles for pricing and revenue allocation had to be established to apply the uniform basic fare of KRW 1,700 to the subways and the express buses. For a final agreement among the relevant parties, a lot of consultation was needed to address all the sensitive issues. The following is the chronicle of events up to the expanded implementation of the System: ○ Dec. 8, 2006 A joint agreement regarding issues of the greater metropolitan area was signed. ※ The Seoul mayor and Gyeonggi governor made a commitment to make joint efforts for traffic, water and air quality improvement and agreed on basic principles. ○ Jan. 12, 2007 The transportation card record between Seoul and Gyeonggi Province was shared and jointly analyzed. ※ Based on the joint analysis, the two parties estimated the scale of revenue decrease and the gains and losses of each stakeholder. ○ Jan. 23, 2007 An agreement regarding the principles of revenue loss sharing was reached by the operators of Seoul buses and Gyeonggi buses. ※ The stakeholders agreed to receive financial aids from their respective local government. ○ Feb. 12, 2007 The way of estimating/allocating the revenue loss associated with transit between the Gyeonggi buses and the Seoul subways was discussed. ○ Mar. 7, 2007 Specific issues in other fields including the environment were proposed for discussion. ※ In tandem with traffic issues, air quality improvement and other environmental topics were discussed. ○ Mar. 8, 2007 A technical consultative body and operation plan was established. ○ Apr. 18, 2007 Integrated ways of revenue allocation for the expanded System were discussed. ○ May 22, 2007 Ten rounds of weekly technical meetings between the revenue allocation companies (KSCC and eB) were held. ○ May 29, 2007 The timing of the expanded implementation and the remaining issues in dispute were discussed. ○ Jun. 8, 2007 The joint agreement regarding the expanded implementation of the System was announced. ○ Jul. 1, 2007 The expanded System began to be implemented (excluding the Seoul-Gyeonggi express buses). ○ Aug. 2007 A survey was conducted on the usage patterns, distances and fares paid of the Seoul-Gyeonggi express buses. ○ Dec. 2007 Working-level consultation was held on fare charging scheme, revenue loss sharing, ways to improve the operational system, program development, the implementation timing of the System, etc. ○ Mar. 17, 2008 Consultation was held among the relevant entities of Seoul and Gyeonggi Province. ※ The following preconditions were suggested: - Minimize the unnecessary inflow of Seoul-Gyeonggi express buses into downtown Seoul - Reform the Gyeonggi bus routes to minimize bus operations exceeding the provincial boundary - Set up and carry out a detailed plan for the construction of transit centers in Gyeonggi Province ○ Apr. 7, 2008 A plan for the improvement of the Seoul-Gyeonggi express bus system was announced (jointly by the Ministry of Land, Transport and Maritime Affairs (MLTM) and the local governments of Seoul, Gyeonggi Province and other cities in the greater metropolitan area). ○ May 23, 2008 A meeting was held between the Seoul Deputy Mayor and the Gyeonggi Deputy Governor. ○ Jun. 8, 2008 A package plan of the central government to overcome high oil prices was announced (at a high-level joint policy coordination meeting). - The plan included the expanded implementation of the System in the fourth quarter of 2008 to the Seoul-Gyeonggi express buses. ○ Jul. 21, 2008 A press conference was held on progress in the preparation for the expanded implementation of the System. ○ Sep. 2008 The System began to be applied to the Seoul-Gyeonggi express buses.

c. What were the main obstacles encountered? How were they overcome? No more than 500 words
The major issues in dispute associated with the expanded implementation of the System were about how to share the revenue decrease resulting from fare discounts, fare charging scheme and revenue allocation system. The Seoul Metropolitan Government mediated the negotiating parties to agree to maintain the existing schemes and managing organizations of fare charging and revenue allocation while persuading the Gyeonggi subway and bus service providers to accept the expected revenue losses. As a result, it was concluded that the local governments shall compensate for the revenue loss incurred by the bus operators of their own districts due to the bus-to-bus transit discounts. As for the revenue loss resulting from the subway-Gyeonggi bus transit discounts, the Gyeonggi government and the subway operators agreed to share the burden at a ratio of 6 to 4. The issue of revenue loss compensation was even more difficult when the application of the System was expanded to the Seoul-Gyeonggi express buses. This was due to fact that the express buses’ basic fare was 1.8 times higher than the other transportation means included in the System. The Seoul Metropolitan Government succeeded again in persuading the express bus operators with plans including bus route adjustment and transit center construction that could promote the use of public transportation while minimizing the revenue loss borne by the express bus operators. For the expanded implementation of the System, Seoul needs an additional annual budget of approximately KRW20 billion. In spite of the increased financial burden, the city of Seoul was committed to the wider application of the System to realize the greater public good such as easing the financial burden of households and cleaner air. The Seoul Metropolitan Government continues to strive to raise the public transportation revenue by controlling the demand for private vehicles and promoting the use of public transportation. A special emphasis will be on motivating the commuting motorists, who account for the most part of the traffic inflow into Seoul, with transit discounts of the Seoul-Gyeonggi express buses to switch to public transportation.

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, the city of Seoul is financially obliged to deal with a revenue loss which amounts to about KRW20 billion per year. However, this sum is inevitably needed to provide discounts to public transportation users in the greater metropolitan area. Improving the competitiveness of mass transportation leads to less use of private cars and increased use of public transportation. Given the possible cost reduction from decreased traffic congestion, increased energy conservation and other environmentally positive effects, the gains will certainly outweigh any losses. Despite the fact that the city’s increased financial obligation is shared by the taxpayers, the Seoul Metropolitan Government could mobilize the citizens’ support for the expansion of the System by faithfully explaining the aforementioned greater public benefits the expansion could bring about to the citizens.

Is the initiative sustainable and transferable?
Based on its experience of operating the Integrated Distance-Based Fare System within its boundary in 2004, the city of Seoul expanded the System into the nearby Gyeonggi Province and further widened the application of the System into the Seoul-Gyeonggi express buses by creating a new fare charging system jointly with other local authorities. This could be a good example to follow when other cities seek to implement a similar system. Considering the various merits of the expanded implementation of the System – financial, social and environmental – that were mentioned previously, an institution similar to the System could help densely populated cities like Seoul promote the use of public transportation, reduce the demand for private vehicles, and significantly improve air quality. Indeed, cities like Beijing, Shanghai, London, Mexico City and San Francisco had shown a keen interest in adopting a similar system but were unable to realize it mainly because the cities failed to produce an agreement among the stakeholders on the introduction of such a system. In this regard, it is remarkable that the Seoul Metropolitan Government succeeded in inducing an agreement among all the relevant parties including other local governments and public transportation service providers on the expansion of the System. Thus, the benefits of the System could be shared by the greater metropolitan area residents. The strategies pursued by the city of Seoul in the course of carrying out the expansion project can be applied to settle any issues involving multiple municipalities within a one-day life zone, especially in countries where the administrative districts do not match the effective zones of living. ※ Domestically, the Seoul Metropolitan Government was selected as the best municipality in the nation in terms of win-win cooperation as the successful expansion of the Integrated Distance-Based Fare System was recognized as a best practice that other cities and provinces could follow.

What are the impact of your initiative and the lessons learned?
The expanded implementation of the Integrated Distance-based Fare System which removed the ‘partitions’ between administrative districts and transportation modes set a good example of integrated public administration in the field of transportation where multiple local authorities resolve disputes on a give-and-take basis. In the course of pursuing the expansion of the System, Seoul collaborated in the transportation area and Gyeonggo Province collaborated in other fields including the environment, proving it is possible to produce a mutually beneficial outcome through making cooperative concessions. In settling other major issues of disagreement, the city of Seoul presents an exemplary case of public administration that puts a greater public good before anything else. Even though the main beneficiaries of the expanded System are the Gyeonggi residents, who account for 70 percent of the Seoul-Gyeonggi commuters, the Seoul Metropolitan Government chose to bear the financial burden for the overriding interests of the greater metropolitan area such as the easing of traffic congestion, reduction of energy consumption and improvement of the natural environment. In addition, the city of Seoul could achieved the expansion of the System to the Seoul-Gyeonggi express buses in a short period of time by facilitating an agreement among Incheon, Gyeonggi Province and other stakeholders with new schemes of fare charging and revenue allocation that can create a win-win situation. This could be a good precedent of public administration at a time when regional boundaries are getting blurred and most of the social issues require a broad viewpoint-based approach.


Institution Name:		Seoul Metropolitan Government
Institution Type:		Government Agency
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
Postal Code:		100-110
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