Subsidies for bus firms

Authorities should not pass burden on to taxpayers

It was good to see unionized bus drivers rescind their plan for a general strike last week. But it was bad to see the transportation authorities agree to hike bus fairs and provide more subsidies to owners of bus companies.

The government and the public heaved a sigh of relief after possible nationwide traffic chaos was averted. But the two carrots for the union and bus companies have invited criticism for passing the burden on to commuters and taxpayers.

It is somewhat understandable that fare hikes are inevitable due to steep rises in the minimum wage and a shorted 52-hour workweek. The provision of subsidies to bus operators by expanding their semi-public management system could be one measure to keep financially-strapped bus firms afloat.

Setting aside the agreed fare hikes, the expansion of the semi-public management system appears to be problematic as municipal and provincial authorities have to make up for the losses bus companies suffer. For example, Seoul City has spent 3.7 trillion won ($3.1 billion) in taxpayers' money on compensating bus operators for their losses since 2004 when it introduced the system.

Furthermore, many Seoul bus companies are suspected of having embezzled subsidies. They have even fabricated documents to get paid. It is no wonder that company owners have fattened their own wallets by appropriating subsidies from the municipality.

More worrisome is how the city government has provided bus companies with huge sums of subsides without rigorously monitoring their accounting procedures. City officials who overlooked the bus firms' misappropriation of such funding should be called to account. Unless the problems of Seoul bus companies are completely solved, the authorities should not expand the system to other cities and provinces.

For their part, bus companies must keep in mind that they stay in business thanks to taxpayers' money. They have to improve accounting and management transparency. The authorities should stop providing subsidies to bus companies which run their businesses in an opaque way.