Line’s collapse to squeeze IncheonThe Incheon city government and the Incheon Transit Corporation held an emergency meeting Monday to respond to the collapse of the Uijeongbu Light Rail Transit Company.
After the Uijeongbu Light Rail Transit Company filed for bankruptcy last week, over 90 employees of the Incheon Transit Corporation may be at risk of losing their jobs.
The Incheon Transit Corporation signed a contract with the Uijeongbu Light Rail Transit Company in 2010, to manage until 2020 the light rail operations on the Uijeongbu Line, or the U Line, in Uijeongbu, Gyeonggi.
The Incheon Transit Corporation was contracted to receive a total of 96.9 billion won ($81.9 million) for the 10 years of service.
A total of 94 employees of the Incheon Transit Corporation were subcontracted.
But an Incheon Transit Corporation employee told the Korea JoongAng Daily he is not too worried with the way things were going.
“The people subcontracted will continue working on the light rail line until the Uijeongbu city government decides to either run the operation itself or hire another subcontractor,” said an employee surnamed Yoo of the Incheon Transit Corporation’s customer assistance center.
“Even if the city government decides to sign a contract with another company,” he added, “the employees will be called back in stages, not all at once, and they will likely be subcontracted to other companies. So really, nobody is losing their job here.”
But how the Incheon Transit Corporation will receive payment from the insolvent Uijeongbu Light Rail Transit Company has yet to be determined.
The Uijeongbu Light Rail Transit Company filed for bankruptcy after running up 240 billion won worth in debt by the end of last year. To break even, the line needs about a daily average of 118,000 passengers, but is only seeing 35,000.
The Incheon Transit Corporation is mired in three lawsuits with the Uijeongbu Light Rail Transit Company, all concerning payments.
Contrary to the initial contract, whereby the Incheon Transit Corporation was to manage operations at 14 stations on the U Line, a station was added to its load.
The Incheon Transit Corporation has been demanding an additional 4 billion won payment from the Uijeongbu Light Rail Transit Company for this.
In 2015, the Uijeongbu Light Rail Transit Company refused to pay 5 percent of its monthly payment of 940 million won to the Incheon Transit Corporation, citing lack of fulfillment of contract due to the alleged negligence of the Incheon Transit Corporation’s cleaning staff.
“Even if the Seoul Central District Court declares the Uijeongbu Light Rail Transit Company bankrupt, we have signed contracts with its investors,” Yoo said.
“We are legally required to get those payments through ordinary means and through the ongoing lawsuits.”
The Incheon Transit Corporation is scheduled to hold a meeting with the Uijeongbu city government over details of the operation of the light rail line today.
BY CHOI MO-RAN, ESTHER CHUNG [email@example.com]