A high-ranking Seoul city government official said on August 7, "The most likely arrangement would be for three life insurance companies to buy up the stake held by the Macquarie-Hyundai Rotem consortium." The three insurers will invest a total of 700 billion won in equal shares.

 

This time around, the city government will make sure the new investors would not be directly involved in subway operations in order to prevent the repeat of fare dispute. To that end, the insurers will take about 4-plus percent of annual returns while the daily management responsibility will be assumed by an asset management firm, with the rights to determine fare levels firmly in the hands of the city government.

 

The subway No. 9 has originally been operated under a minimum revenue guarantee scheme that assured its shareholders a certain level of profit by the city government. The scheme has been under criticism as the city was required to compensate the consortium with tens of billions won every year. The subway corporation filed a lawsuit last year against the city government for the latter refusing to raise the fare after the former demanded, in two separate occasions, to raise the fare by 500 won to 1,550 won. The suit was dismissed by a local court saying, "the city government has the right to deliberate and reject fare hike demands."