Urban and Regional Report No. 79-2 R - KOREA: OPTIONS FOR SECONDARY CITY URBAN TRANSPORT M. Beesley, C. Turner, P. Gist of Nathaniel Lichfield and Partners and K. B. Whang of Korean In,titute of Science and Technology August 1979 These materials are for internal use only and are circulated to stimulate discussion and critical comment. Views are those of the author and should not be interpreted as reflecting the views of the World Bank. References in publications to Reports should i e cleared with the authors to protect the tentative character of these papers. Urban and Regional Economics Division Development Economics Department Development Policy Staff The World Bank Washington, D.C. 20433 TABLE OF CONTENTS Page No. ACKNOWLEDGEMENTS PREFACE .................................................. i-iii I. INTRODUCTION ............................................. 1 A. Background ........................................... 1 B. Objectives .................... .................... 2 C. Organisation of Paper ............................... 4 II. APPRECIATION OF CURRENT SITUATION IN URBAN TRANSPORTATION SECTOR ............................... 6 A. Existing Conditions .................................. 6 (i) Structure of Personal Travel Demand and Forecasting ................................ 6 (ii) Characteristics of Supply ...................... 17 B. Principal Existing Urban Transport Policies ............................................. 26 (i) Investment Policies ............................ 26 (ii) Pricing Policies ............................... 28 C. Land Use Planning and Environmental Controls Strategic Land Use Planning .......................... 30 D. Decision Making in the Urban Transportation Sector ............................................... 32 (i) Road Investment ........................... . 32 (ii) Regulatory Policies ......................iies. 3 (iii) Traffic Management ............................. 34 (iv) Land Use ...................................... 35 III. THE ANALYSIS OF FUTURE TRAVEL DEMAND AND POTENTIAL STRATEGIC POLICY ALTERNATIVES ............................. 36 A. Introduction ......................................... 36 B. Specifying the Strategic Policy Alternatives ......................................... 37 (i) Land Use Policies ................................ 40 (ii) Pricing Policies ............................... 40 (iii) Sumwary of Model Procedure .................... 44 C. Findings ............................................. 46 (i) Forecast ....................................... 46 IV. CONCLUSIONS AND RECOMENDATIONS ........................... 73 A. Conclusions from the Analysis of Options ............. 73 B. Recommendations for Creating the Necessary Conditions ........................................... 80 (i) Public Transport ............................... 80 (ii) Infrastructure ................................. 83 (iii) Land Use ....................................... 84 (iv) Maintaining Appropriate Market Conditions ...... 85 TABLE OF CONTENTS (Cont'd) Page No. FIGURES 1. TOTAL PERSON TRIPS/PERSON VERSUS MOTORISATION ............ 8 2. MECHANISED TRIPS/PERSON VERSUS PER CAPITA INCOME (1970 US$) ............................................... 10 3. MOTORISATION (cars/1000 people) VERSUS PER CAPITA INCOME (1970 US$) ........................................ 11 4. MOTORISATION VERSUS PER CAPITA INCOME: KOREA 1966-1975 .......................................... 16 5. PUBLIC TRANSPORT SHARE OF MECHANISED TRIPS VERSUS MOTORISATION ...................................... 18 6. 1975 AVERAGE KOREAN CITY ................................. 45 7. 1985 AVERAGE KOREAN CITY ................................. 47 TABLES 1. COMPARISON OF TRAVEL DEMAND CHARACTERISTICS, SEOUL AND BUSAN .......................................... 7 2. THE STRUCTURE OF KOREAN CAR OWNERSHIP .................... 13 3. THE STRUCTURE OF THE JAPANESE CAR OWNERSHIP .............. 14 4. COMPARISON OF AUTOMOBILE RELATED TAX RATES IN KOREAN AND JAPAN FOR A STANDARD 1500CC NON COMMERCIAL USE PASSENGER AUTOMOBILE 1976 ................ 19 5. INTERNATIONAL COMPARISONS OF % OF URBAN AREA USED FOR ROADS (PAVED, GRAVELLED, UNREPAIRED) ............ 20 6. CHARACTERISTICS OF BUS PROVISION ......................... 22 7. CHARACTERISTICS OF TAXI PROVISION ....................... 23 8. BUS OPERATING CHARACTERISTICS 1976 ....................... 25 9. TAXES ON OWNERSHIP AND USE FOR THE AVERAGE KOREAN CAR ............................................... 29 10. AVERAGE CITY 1975 and 1985 UNDER LAND USE POLICIES - DENSITIES, AREAS, POPULATIONS ........................... 41 11. SUMMARY: DAILY PERSON TRIPS BY MODE IN THE AVERAGE KOREAN CITY, 1975 and 1985 UNDER THE ALTERNATIVE LAND USE OPTIONS ..................................... 48 12. PERSON KM's OF TRAVEL IN THE AVERAGE CITY 1975 and 1985 UNDER ALTERNATIVE LAND USE OPTIONS ............. 50 13. THE INCREASE IN CAR PRICES AND TAXES NECESSARY TO REDUCE CAR OWNERSHIP BY 25% UNDER EACH LAND USE OPTION 51 14. TOTAL USER COST OF AVERAGE PRIVATE CAR ................... 53 15. TOTAL VEHICLE KILOMETRES OF TRAVEL IN 1975 and 1985 AFTER EACH LAND USE POLICY BEFORE AND AFTER EFFECTIVE USE PRICING .. ........................................... 55 16. STOCK OF VEHICLES 1975, 1985 UNDER ALTERNATIVE LAND USE POLICIES ....................................... 56 17. ROAD PROVISION IN THE AVERAGE KOREAN CITY ................ 58 18. ESIMTATED HOURS OF TRAVEL PER DAY 1975 and 1985 .......... 59 19. AVERAGE CITY/INTERNATIONAL COMPARISON OF PERSON TRIP RATES ......************************................. 61 TABLE OF CONTENTS (Cont'd) Page No. TABLES (Cont'd) 20. "AVERAGE" CITY/INTERNATIONAL COMPARISON OF SELECTED TRAVEL DEMAND CHARACTERISTICS ............................ 62 21. "AVERAGE" CITY/INTERNATIONAL COMPARISON OF SELECTED TRANSPORT SUPPLY CHARACTERISTICS ......................... 63 22. COST OF DAILY TRAVEL TIME ...........................,... 64 23. CAPITAL COSTS OF ADDITIONS TO STOCKS OF VEHICLES ......... 66 24. ROAD CONSTRUCTION COSTS .................********........ 67 25. ANNUAL REPLACEMENTS COST FOR VEHICLE STOCKS 1975-1985 ********* ********* ********................... 69 26. ESTIMATED OPERATING COSTS PER DAY, CAR, TAXI, BUS ........ 70 27. SUMMARY OF COSTS 1985 .................................... 72 28. DAILY COSTS OF TRAVEL OVER FIVE YEARS PLUS CAPITAL COSTS ***************************................. 75 APPENDICES A. TERMS OF REFERENCE B. INTERNATIONAL DATA C. MODEL OF THE AVERAGE KOREAN CITY IN 1975 and 1985 ACKNOWLEDGEMENTS We would like to acknowledge the comments and suggestions of the many people who have helped in the preparation of this report. In parti- cular we would like to thank Bertrand Renaud and Gabriel Roth of the World Bank for their extremely useful critiques of earlier drafts. The views expressed are entirely those of the authors as is the responsibility for any errors. PREFACE The present report is one of five major reports prepared for the study of the Urban Sector in the Republic of Korea undertaken by the World Bank in 1977. In its present form it is just a working document which re- presents only the views of the authors and cannot be quoted as representing the official views of the World Bank nor its affiliated organizations. It will be used for the preparation of a more comprehensive document integrat- ing the findings of various study teams. Because the preparation of this more comprehensive document will require additional time, and reviews, it has been thought useful to outline briefly and informally the nature and or- ganization of this study of the Korean Urban Sector. ii. Over the last twenty years the Republic of Korea has established one of the best records in terms of rapid economic growth. This growth has been accompanied by a similarly rapid rate of urbanization which by some mea- sures has been the highest in the world for countries over 15 million people. These changes have now transformed South Korea into a society where urban policy issues are occupying a more and more conspicuous place. During the year 1977 it was decided that the World Bank should engage in a review of some of the major problems and opportunities created by urbanization in Korea for three main reasons. First, the review of the Korean experience would be of value to the Bank in its operations in Korea, second a large amount of the new investment based on foreign loans has a major direct impact on Korean cities. Finally, the Korea case is of particular interest because of the rapid evolution of the economy and the relatively large information base per- mitting a good documentation of this evolution. Documenting the Korean case in more detail would provide a very useful point of reference for the under- standing of urbanization patterns in other countries. - ii - iii. Given the time and resource constraints imposed on the review, selectivity was neressary. It was decided that the focus of the analysis should be on the urban problems of non-metropolitan cities, that is to say, the Korean cities other than the two major urban centers of Seoul and Busan. It was felt that the complexity of the problems in Seoul and Busan would require analyses of greater depth and larger scale than could be possible with the resources available. In addition, justification of the focus on the non-metropolitan Korean cities could be based on four broad arguments: (1) These cities are already experiencing a very rapid demographic growth, and will have to accommodate even more people in the future if the growth of the metropolitan cities is to slow down. (2) Quite a few of these cities have become capable of attracting new industries and need to guide their internal growth more effectively. (3) There have been serious debates on whether infrastructure and operating costs in these cities are not likely to be lower than in the metropolitan centers. (4) Non-metropolitan cities must play a greater role in reducing regional inequalities. iv. The participants in the Korea Urban Sector Study listed by area of resTpn2ibility have been: Urban Transport: - Christopher Turner, Partner, Nathaniel Lichfield and Partners, London. - Michael Beesley, Professor, University of London and Partner, Nathaniel Lichfield and Partners. - Peter Gist, Nathaniel Lichfield and Partners. - Whang, Kyu-Bok, Korea Institute of Science and Technology, Seoul, Korea. - iii - Housing: - Bertrand Renaud, World Bank. - James Pollain, The Urban Institute, Washington, D.C. - Gil-Chin Lim, Princeton University, New Jersey. Local Finance: - Professor Roger Smith, University of Alberta, Canada. - Professor Kim, Chong-In, Sogang University, Seoul, Korea. Land Use: - Professor William Doebele, Harvard University. - Professor Hwang, Myong-Chan, Kon-Kuk University, Seoul, Korea. Environment Law and Planning: - Professor Julian Gresser, University of Hawaii, Honolulu, Hawaii. v. In addition to these five major reports, Linda Lessner, Associate Researcher, Urban and Regional Economics Division, World Bank, prepared reports on the legal framework for urbanization in Korea, on the Korean System of Local Government and on the recent history of urban and regional policies in Korea. In anticipation of the beginning of the Korea Urban Sector Study, Professor Koichi Mera of Tsukuba University, Japan, had prepared a report on population distribution policies in the Republic of Korea in 1976. vi. The organization and the management of the entire project has been the responsibility of Bertrand Renaud, Economist, Urban and Regional Economics Division, Development Economics Department, The World Bank. In addition to his general responsibilities for the entire project and to his more specific responsibility for the housing report, he also performed additional studies of aggregate patterns of urbanization in Korea. 1. INTRODUCTION A. Background 1.1 This paper presents an assessment of existing urban transport problems and their possible solutions for rapidly groiwing secondary (pro- vincial) Korean cities in which future Bank interest might be concentrated. The study is one of four such reviews being conducted as part of an overall secondary city urban sector mission. Other papers cover housing, land use and local public finance. 1.2 The detailed background to the transportation sector study is set out in the terms of reference, Appendix A to this report. It is however, important to report here that the study has departed from the original terms of reference (Appendix A) in two major respects. The first concerns the proposed analysis of Busan. Because of the acute shortage of urban trans- portation (and particularly travel) data for the secondary cities it had originally been intended to base the analysis on the City of Busan (for which a transport study has brten carried out) 1/, and to draw inferences from this analysis for the secondary cities. However, Busan is itself not representative of all secondary cities. During discussions early in the study it was concluded that a more appropriate approach would be to develop and test policy alternatives specifically for a 'representative' city, an average of the main secondary cities. A simplified modelling procedure, developed to forecast future travel demand in response to alternative land use, ownership and use regulatory policies, was checked for consistency against the existing situation in Busan. It was then applied directly to 1/ Busan Transportation Study, KIST 1976. -2- the analysis of alternative land use and regulatory policies. The 'average' secondary city was constructed, respectively, from the existing and fore- cast physical and socio-economic characteristics of the four cities of Daegu, Daejon, Gwangu and Jeonju. This method is set out in detail in Section 3. 1.3 The second departure concerns the omission of the goods movement sector from our analysis. It has not been possible to make such a study within the available resources. B. Objectives 1.4 The essential purposes of the study, were first, to review existing transportation conditions in Korean secondary cities; second, to clarify the context and content of decision-making in urban transportation planning and its execution in Korea, as an initial step in the preparation of feasibility studies; and third, to provide appropriate tests of policies for future transportation planning activities. 1.5 The timing of the study is significant for the following reasons. Under the Five Yea. Plan, 1/ personal incomes are forecast to rise at a rate of 7% compound annually, over the period which, ceteris paribus, would inevitably lead to a major increase in the demand for car ownership. Further, the role of the Korean motor industry in the country's future industrial development programme is currently being reviewed. To date, the high taxes on car ownership and low personal incomes have tended to suppress the demand for private cars and the industry has been operating 1/ Korea's Fourth Five Year Economic Development Plan, March 1977. Eco- nomic Planning Board, Republic of Korea. -3- well below its capacity of 140-150,000 cars a year. It is considered that there is the possibility of a rapid expansion in the country's level of motorisation at low real costs in manufacturing terms which will be an important part of growth in the Korean economy as a whole. This, together with the personal advantages associated with car ownership, constitutes a pressing argument for a rapid expansion in motorisation. However, these private benefits to car ownership will involve public expenditures and costs, particularly in the cities. 1.6 Again, the new Decentralisation Strategy, 1/ announced in March 1977, is likely to place even more growth pressures on the four provincial cities that form the focus of the study, Daegu, Daejon, Gwangju and Jeonju. This is because these cities have been designated as target cities for the absorption of the Seoul surplus population, in addition to being d- esignated as major growth centres under the previous policy. 1.7 Rising incomes and populations will result in a dramatic increase of demand for mechanised travel of all kinds - buses, taxis, other para- transit as well as cars. Over the time period of analyses to 1985, cars, though growing rapidly, will still constitute a relatively small part of total demand for travel. The substitution of walk trip demand is likely to provide an important source of future mechanised travel. 1.8 For these reasons in particular the study has concentrated on an analysis of the potential impact of rapidly increasing demand for mechanised trip-making on the transport planning problems of Korean non-metropolitan (secondary) cities, and within this the role potentially played by cars. 1/ Decentralisation Strategy, March 1977. Government of Korea. -4- Because cars represent a very space-consuming form of transport, as opposed to buses, rising car ownership has important implications for these solu- tions. Alternative sets of land use and pricing (of car ownership and use) assumptions have been postulated and tested. 1.9 To make these tests we have developed a simplified model to project the order of magnitude of total future personal citywide travel demand under alternative land use and pricing assumptions. For each policy, costs have been traced in terms of the stock of vehicles, new road construction and time spent travelling. While conscious of the limitations imposed by the small scale of the exercise, we consider the model to repre- sent an innov-tion which, with further development, could provide an ex- tremely useful strategic planning tool. We also believe that the magnitude of the projections made under the various policy options, and against which we have framed our recommendations, provide a reasonable indication of the scale of the future travel demand problem facing Korean secondary cities. This is borne out by the international comparison proviaed in para. 3.44. C. Organization of Paper 1.10 This paper is set out as follows. Section 2 describes the signi- ficant elements in existing conditions, policies and institutional organisa- tions in the urban transport sector which bear upon future transport de- velopments and therefore policy choices. Where possible, comparisons are drawn with other developing countries. -5- 1.11 Section 3 presents the analysis of the future car ownership problem and potential land use and pricing policy solutions to that problem. Section 4 draws together the recommendations which follow both from the analysis of the current situation in the urban transport section (Section 2), and the investigation of future strategic policy alternatives (Section 3). -6- 2. APPRECIATION OF CURRENT SITUATION IN URBAN TRANSPORTATION SECTOR A. Existing Conditions (i) Structure of Personal Travel Demand and Forecasting 1/ 2.1 The major source of secondary city data for travel demand is the City of Busan, for which a comprehensive transportation study was carried out in 1973. 2/ Given this scarcity of data, the approach taken in pre- dicting likely future developments is to compare the main elements of travel demand recorded for both Seoul, for which data does exist, 3/ and Busan with those of other developing country cities at different stages of their development. The major source of secondary city data for travel demand is the City of Busan, for which a comprehensive transportation study was carried out in 1973. 2/ Seoul is the only other city for which such data exists, and its demand characteristics are compared with those of Busan in Table 1. While total person trip rates/person for Seoul and Busan are similar at the dates for which the information exists, Seoul has a higher level of mechanised person trips/person and a lower non-mechanised trip rate. 2.2 An important part of total person trip making is all walking trips, and to a lesser extent bicycle trips, comprising "non-mechanised" trips. Any prediction of mechanised trip-making must account for trans- ference to mechanised modes. The potential importance of this for Korea is seen in Figure 1. This takes motorisation as a proxy for income and com- pares total person trips for different cities as motorisation increases. 1/ Note that this discussion relates to total daily trips. 2/ Busan Transportation Study, KIST 1974. 3/ Survey and analysis report on Seoul Urban Transportation, KIST 1970. -7- TABLE 1: COMPARISON OF TRAVEL DEMAND CHARACTERISTICS, SEOUL AND BUSAN Seoul (1970) -Busan (1973) MODE Person Trips/Person Person Trips/Person .Non mechanised trips 0.350 0.494 Private mechanised trips 0.030 0.069 (Cars) Public mechanised trips 0.864 0.720 (buses and taxis) Total mechanised trips 0.894 0.789 Other 0.045 0.000 TOTAL 1.289 1.283 Sources: Survey and Analysis Report on Seoul Urban Transportation, KIST (1970) Busan Transportation Study; (KIST 1974) FIGURE 1: TOTAL PERSON TRIPS/PERSON VERSUS MOTORISATION 4.0 0 3.0 P4 2.0 *Sapporo *Nicosia *Nth.Kyushu * Nagoya Fokyo * * Sendai *Okayama Keihanshin co o 1.0 Ka * Manila *Kuala Lumpur *Singapore wBusan B San Jose *Kingston *Hong Kong Lagos 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250 260 270 MOTORISATION (cars/1,OOO people) SOURCE: 1, Nathaniel Lichfield and Partners, 1977. 2. Annual Report of Roads 1975 - Japanese Road Association. -9- Busan's position is not far different from what one would expect allowing for its exceptionally low level of motorisation, because at that level, walking is in any case greatly affecting total person trip-making. We concentrate on mechanised trips of the various kinds here because walking trips are notoriously difficult to survey accurately. Longer walking trips are more likely to be observed and recorded than shorter, and are more likely to be substituted for by mechanised means when incomes increase. For forecasting purposes, then, figures for total person trips will be less reliable than figuru2 for mechanised trips. Total person trips can be expected to grow with income more slowly than mechanised. We assume that non-mechanised trips will remain unaffected by income growth. The figures that are available do not appear to support this assumption (see Table 1.A, Appendix B). Indeed they show a relationship indicating that as income grows so do non-mechanised trips. This is likely to be due to differences in conditions for data collection and reportage. With higher incomes, the greater the chances of full reporting of trips. But differing densities can be expected to affect non-working trips and is taken account of later. 2.3 Judging by the position of Busan and Seoul, Korean cities do not display an exceptional position when mechanised trips per person are consi- dered with respect to income levels (Figure 2). Busan falls little below its expected trip-making level. The striking feature of the current demand for travel in Korean cities is the extremely low level of car ownership ("motorisation") in comparison with non-Korean cities, again when income per head is taken into account (Figure 3). FIGURE 2: MECHANISED TRIPS/PERSON VERSUS PER CAPITA INCOME (1970 US$) 2.5 0 2.0 *Bogota 124 Okayama * Nth.Kyushu C *Sendai * Nagoya -i 1.5 Sappora * Tokyo U) *Keihanshin *San Jose 0 U * Seoul 1.0 *Karachi Busan .5 500 1000 1500 2000 2500 3000 3500 4000 4500 ANNUAL INCOME/PERSON (1970 US&) SOURCES: 1. Nathaniel Lichfield and Partners, Phase I City Study, 1977; "Urban Transport", Sector Policy Paper, IBRD, 1975. 2. Annual Report of Roads, 1975, Japanese Road Association. 260 FIGURE 3,: MOTORISATION (cars/1,000 people) VERSUS PER CAPITA INCOME (1970 US$) Paris 3530> 240 London 220 2550 200 0 180 0 Q.) P 160 0 0 0 140 id 120 O 100 Int *Caracas H 80 • Abidan . Mexico City Singapore 60 OBankok *Kuala Lumpur 40 San Jose 20 * Bogota OKarachi *Seoul 0 Busan 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 100 AVERAGE ANNUAL INCOME/CAPITA (1970 US$) SOURCES: 1. Zahavi "Travel Characteristics in Cities of Developing and Developed Countries" IBRD Staff Working Paper No.230. 2. Nathaniel Lichfield and Partners 1977- - 12 - 2.4 Significant structural changes in the ownership of cars can be observed over time with rising incomes (Table 2). In particular, there has been a significant increase in the ownership of private and business cars and a parallel decline in the market share of taxis. These trends are consistent with those experienced in Japan at a rather later stage of its development (Table 3). 1/ 2.5 It has been possible to break out the business and private market shares for Japan, and this reveals that while both shares increased rapidly initially, the proportion of business car stocks has subsequently levelled off while the private car ownership market share has continued to increase. It is entirely possible, and indeed to be anticipated, that a similar shift is currently taking place in Korea, although the data does not allow this to be estimated directly. For forecasting, it seems appropriate to focus on income per head. 2.6 One other point of interest concerning the mechanised market in Korea is the very small role played by motorcycles. In Seoul for example, this mode accounted for only 0.65% of all person trips in 1970. According to a six city study in Japan 2/ the figure varied between 8.2% and 22.5% in 1970. We assume that, principally for reasons of climate, motorcycles will not be an important mode fo:: ip making in our model. 2.7 Seoul has a greater r-te of public trip-making/person and a lower private trip/person rate than Busan (Table 1). The differences in non- mechanised/ mechanised trip rates are consistent with the income differential 1/ In fact in terms of national income/capita, the 1957-1961 range for Japan was US$440-660; and for Korea (1970-75), US$230-403, in 1970 constant prices. 2/ Annual Report of Roads, Japanese Road Association, 1975. - 13 - TABLE 2: THE STRUCTURE OF KOREAN CAR OWNERSHIP Breakdown of Total Car Stock by Type Business and Official Private Taxis All Cars Year Total % Total % Total % Total % 1966 1,345 11 7,481 43 8,176 47 17,502 100 1967 2,247 10 9,871 42 11,117 48 23,235 100 1968 2,787 8 14,397 43 15,928 48 33,112 100 1969 3,128 6 23,690 47 23,475 47 50,299 100 1970 3,547 6 28,687 47 28,443 47 60,667 100 1971 3,961 6 33,994 50 29,627 44 67,582 100 1972 4,507 6 36,412 52 29,325 42 70,224 100 1973 5,046 6 43,400 55 29,385 38 78,334 100 1974 4,837 6 44,618 58 27,007 35 76,462 100 1975 5,023 6 50,093 59 29,090 35 84,212 100 Source: KIST 1977 -14- TABLE 3: THE STRUCTURE OF THE JAPANESE CAR OWNERSHIP % Breakdown of Total National Car Stock by Type BUSINESS YEAR OFFICIAL BUSINESS PRIVATE BUPIVE TAXIS TOTAL & PRIVATE 1957 3.0 57.2 7.9 65.1 31.9 100 1958 3.5 56.9 12.3 69.2 27.4 100 1959 5.7 59.2 13.9 73.1 21.2 100 1960 3.7 59.4 16.0 75.4 20.9 100 1961 4.5 57.0 23.0 80.0 15.5 100 SOURCE: KIST 1977 - 15 - that existed at the dates of the studies 1/ and the substitution of mecha- nised for non-mechanised trips in Seoul. The differences in the rate of private mechanised trips are more difficult to explain as one would expect the rates to be reversed, the differential could be in part attributable to the higher densities of the capital and a superior public transport system. The complete data sets and sources in this comparison are set out in Appen- dix B. 2.8 The likely future course for travel growth in Korea is, then, first a rapid increase in mechasised trip-making as income grows, as shown in Figure 2 and a decrease in non-mechanised trip-making. Were Korea to develop as have other nations, one would expect a rapidly growing share in tota.L mechanised trip-making for private cars, the more marked because of the exceptionally low private ownership levels at which Korea starts. The potential of this increase is clearly brought out by Figure 4. Car ownership does more than create a substitute for trip-making, of course; it also generates more mechanised trips. 2/ 2.9 This is basically because of the superiority of the motor car on all attributes ccacerning mechanised trip-making, except driving itself, once the car is owned (convenience, cheapness per head per trip etc.). Mechanised trip forecasts therefore include the implied trip-generating effect of car ownership. 2.10 Figure 5 summarizes the public transport (including taxi trips) share of the total mechanised market as against motorisation across a range 1/ $440/person for Seoul in 1970, $350/person for Busan in 1973, in 1970 US$ national income per person. 2/ This effect can be very significant. In the Nagoya region of Japan for example, car owners made 3.56 trips for every 2.49 trips/person made by non-car owners in 1970, a 43% difference. 1.6 - 1975. FIGURE 4_: MOTORISATION VERSUS PER CAPITA INCOME: KOREA 1966-1975 1.5 -1973 * 1974. 1.4 1.3 1972. 1.2 1971. o 1.1 1.0 1970 • 0 0 0 0.9 1969. 0.8 0.7 0.6 1968 * 0.5 0.4 1967 1966 . o.3 40 5o 60 70 80 SOUCE KST197.KOREAN NATIONAL INCOME PER PERSON -1970 prices (oool's Won) - 17 - of developing and developed country cities. It brings out the point that by international standards Korean cities, as represented by Seoul, exper- ience a very high proportion of public transport use. It is, however, the combination of high car taxes and relatively low income levels rather than the quality of public transportation in Korean cities, see- Section 2.A(ii) which accounts for the current level of use. In this connection it is interesting to compare the level of car Lax in Korea with that of Japan in 1976 (Table 4). This reveals that purchase taxes on the average car were about three-quarters of those levied in Korea. As seen later, these taxes account for less than half of Korean car taxes. Annual taxes in Japan were only about one-sixth of those in Korea. In 1976 Japan's income per head was about eight times that of Korea. (ii) Characteristics of Supply Infrastructure Urban Roads 2.11 A relatively small proportion of the urban areas of Korean cities is given over to road space. This is brought out clearly by international comparisons presented in Table 5, in terms of the percentage of urban area used for roads. The secondary road system in particular is extremely poor and in some instances does not exist at all. Though levels of traffic are also comparatively low, there is considerable pressure on the primary road system both through the concentration of mixed land uses along the main corridors and the use of the major road system for highly localised jour- neys. Although quantitative figures are not available, facilities for both pedestrians and cyclists also appear small, particularly given the large proportion of the total travel market that they represent. FIGURE 5: PUBLIC TRANSPORT SHARE OF MECHANISED TRIPS VERSUS MOTORISATION 110 Ui) 100 , Seoul i oBusan 90 * Hong Kong 80 ,San Jose 70 * Manila 60 eKarachi *Tokyo * Keihanshin U) * Singapore Kingston. *Sapporo oNth.Kyushu Z 40 0 sendai * Kuala Lumpur P430 * London H Okayama * !agoya 20 Baltimore *Nicosia 272 1 10 Cinci,:atti 348 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 25C MOTORISATION (cars/1,OOO people) SOURCE: 1. Nathaniel Lichfield and Partners 1977 2. Annual Report of Roads 1975 - Japanese Road Association -19- TABLE 4: COMPARISON OF AUTOMOBILE RELATED TAX RATES IN KOREA AND JAPAN FOR A STANDARD 1500 CC NON COMMERCIAL USE PASSENGER AUTOMOBILE 1976 (A= Commodity Value) Korea Japan Japan/Korea(%). PURCHASE TAXES:- Commodity tax 0.2A(A x 20 ) 0.15A(A x 15) 100 ) 100) Defense tax O.04A(O.2A x 20) 100) Acquisition tax O,0248A [(A+0.2A+ O.0575A 1(A+O.15A) O,04A) x 20 x0.051 1000 SUB TOTAL 0.2648 A 0.2075A 78.36% YEARLY TAXES:- Licence tax 14,400 W/Yr Weight tax - 17,000 W/.Yr Auto tax 249,600 W/Yr 35,700 W/Yr Defense tax 74,880 W/yr SUB TOTAL 338,880 W/Yr 52,700 W/Yr 15.55% SOURCE: "A study of the Automobile Industry Development Plan". The Korear Automobile Manufacturers Association 1977. -20- TABLE 5: INTERNATIONAL COMPARISONS OF % OF URBAN AREA USED FOR ROADS (PAVED, GRAVELLED, UNREPAIRED) % of urban area used for 1roads KOREAN CITIES:- Seoul 6.3 Busan 3.4 Daejon 7.5 Jeougu 1.7 Gwangju 2.3 Daegue 4.8 OTHER CITIES:- Salisbury (Rhodesia) 38.0 Leiden (Netherlands) 16.0 Dublin (Ireland) 12.0 Lisbon (Portugal) 20.0 Tel Aviv (Israel) 12.0 Madrid (Spain) 17.0 Denver (USA) 26.0 Los Angeles (USA) 23.0 Hamburg (Germany) 19.0 Gothenburg (Sweden) 18.0 SOURCE: Korean Muncipal Yearbooks 1976; R.J. Smeed "Traffic Studies and Urban Congestion", Journal of Transport Economics and Policy January, 1968. - 21 - 2.12 The relatively small area given over to road space in Korean cities should not, however, be regarded as a justification for a major road building programme. Indeed, one of the consequences of the successful suppresion of car ownership and private travel demand has been a lower investment requirement for urban road construction. While the pressures for new road construction will undoubtedly increase with rising mechanised trip-making, and within that, rapidly increasing car ownership, the extent to which such construction will be necessary becomes very much a function of the success of future policies in restraining private travel demand. This is taken up in Section 3. 2.13 Much the same applies to pprking provision. In all cities, prospective growth in motorisation will lead to greatly increased demands for parking. Present provision, even when augmented by new measures which have been introduced to make new developments provide their own parking spaces, may not seem adequate. Moreover, the high price and great scarcity of parking, caused by the high opportunity costs of urban land, could well continue to act as a disincentive to the provision of substantial new parking space. Public Transport 2.14 The supply of conventional public transport per person in Korean secondary cities is compared with that of other developing country cities in Table 6. The public transport share of the mechanised travel market is also summarized for those cities for which the data are available. As might be expected from our earlier discussion, the Korean cities have rather similar levels of bus and taxi provision (Tables 6 and 7), once allowance is made for their lower incomes per head. -22- TABLE 6: CHARACTERISTICS OF BUS PROVISION Public Transport No. Buses Population Buses/Person Share of Mechanised Market Seoul 4,305 5,525,000 .0009 .92 (1970) Busan 1,329 2,573,713 .0005 .89 (1973) Daegu 702 1,359,040 .0005 Daejon 217 522,439 .0004 Jeonju 182 625,007 .0003 Kwangju 201 322,020 .0006 Calcutta 886 3,399,000 .0003 (1964) Hong Kong 1,920 3,068,000 .0006 (1966) .82 Karachi 1,248 2,350,000 .0005 (1970) .58 Kuala Lumpur 715 912,000 .0012 (1973) .33 Manila 3,285 4,400,000 .0007 (1970) .68 Singapore 3,300 2,150,000 .0015 (1972) .52 Notes: 1. Korean figures for 1976 unless otherwise stated Source: Korean source - Statistical Year Book 1976 Non-Korean source - Nathaniel Lichfield & Partners Phase 1 City Study "Urban Transport Sector Working Paper", Information Availability and Travel Characteristics in Developing Cities, 3rd June, 1977. TABLE 7: CHARACTERISTICS OF TAXI PROVISION Population Taxis Taxis/ooo Persons Seoul 6,541,500 11,964 1.8289 Busan 2,306,041 3,488 1.5125 Gaegue 1,266,233 2,099 1.6577 Kwanju 588,662 643 1.0923 Daejon 476,660 856 1.7958 Jeonju 303,261 314 1.0354 Calcutta (1964) 3,399,000 4,000 1.1768 Hong Kong (1966) 3,068,000 3,728 1.2151 Karachi (1971) 2,350,000 3,582 1.5243 Kuala Lumpur (1973) 912,490 1,610 1.7644 Singapore (1972) 2,150,000 5,000 2.3256 NOTES: 1. Korean figures for 1976. SOURCE: Korean source - Statistical Year Book 1976 Non-Korean source - Nathaniel Lichfield and Partners Phase 1 City Study, "Urban Transport Sector Working Paper", Information Availability and Travel Characteristics in Developing Cities, 3rd June 1977. -24- 2.15 Apart from taxis, conventional bus service is the only form of public transport provided in Korean secondary cities, and this service itself has four major characteristics. First there is an obvious over- loading of vehicles with buses operating above their seating capacity even in the off-peak period on many routes. Second, the route structure in most cities is oriented towards the CBD, (137 of the 157 routes in Seoul cross the CBD), whilst many of the outlying areas have few buses. Third, the design capacity of Korean buses is high (average seat capacity of sixty and crush capacity of almost ninety). Given their secondary road access problems, many suburban residential neighbourhoods have low accessibility. Fourth, there is an absence of bus priority measures such as lane reversal, bus lanes, bus ramps at intersections, bus priority through signalisation, wider bus stop spacing and other such measures designed to use the existing road space and road improvements to the advantage of public transport users. 2.16 The bus services in Korea are provided by a large number of private bus companies, licensed to operate by the Ministry of Transporta- tion. Fares are regulated nationally by the Ministry and routes are fixed by the Municipal Bureau of Transportation. Recent legislation has compelled bus operators to incorporate. Their decisions to change the sizes of their fleets are also subject to regulation. 2.17 Fares are uniform for the cities with which we are concerned. Since costs vary across cities, the operators of different cities vary in their profitability. Differences between operators of the various cities are reflected in Table 8. From it, some comparisons can be drawn between T\LE: 8: BUiS OPERATING; CHARACTERTSTICS , 1976 (Cost,revenue data in Won) SEoUL 3tUSAN DAEGU DAEJON JEONJU GWANGJU No. of Bis Coipallimcs 91 22 13 4 4 6 No. of Iuflses 4 ,793 1,329 702 217 182 .201 Av. No. of Buses per Company 52.67 60.41 54.00 54.25 45.50 33.50 Averaje NonLhly ToLal. CosL/Ms 1,389,914 1 ,1881,505 1,201,618 1,077,326 1,112,343 1,114,344 Average Monthly Labour 411,151 382,200 247,157 278,471 326,197 289,001 CoL L/Bus Av2rage MonLhly Rcvenue/Bus 1,118,513 1,065,501 1,c30,585 1,108,502 1,074,039 1,117,208 Averige loiithly Klometres/Mis 9,041 9,015 10,696 9,370 8,924 8,394 1 Average Monihly Passenjers/Bus 34,769 32,410 34,122 33,910 24,397. 45,414 Average MontLhly [,abour/Total 0.030 0.26 0.23 0.26 0.29 0.26 Cos;L RatLio/bius TPol,il NoniLhily Revenuc/Cost R, Ll /J l o-/isO.80 0.72 0.86 1.03 0.97 1.06 Ri KiAo/ S'V ] SOUtRæ:1 KIST, 31977 - 26 - the four cities of our study on the one hand and Seoul and Busan on the other. Each city has relatively few companies in total compared to Busan (and to Seoul in particular), although the number of buses/company varies considerably, with Gwangju having the lowest figure. In terms of service level provided, expressed by bus use, Gwangju is significantly worse off than the other five sample cities. On the whole, the four secondary cities have relatively more profitable companies, though on average the work done by buses, as represented by kilometres per bus and revenues, are broadly similar. It seems likely that the major distinction lies in the lower wages which the four have to pay. 2.18 Pricing and regulatory policies for taxis mirror those for public transport. Fares are set uniformly on a national basis, while the number of companies and vehicles in each city are regulated through a licensing policy which is applied and monitored in the same manner as bus transport. Shared rides are also currently prohibited in Korean cities to avoid what is regarded as excessive profiteering on the part of the taxi drivers. B. Principal Existing Urban Transport Policies (i) Investment Policies 2.19 Urban road proposals are usually generated through the statutory city master planning process, within the context of which each city must produce an annual programme of projects. These projects are then included in the city's budget proposals which are forwarded to the Provincial Govern- ment for approval and subsequently to the Ministry of Home Affairs. 2.20 In addition, major urban road projects can be funded in part by the Ministry of Construction. One example of this is the Busan Container - 27 - Road, which will link the port of Busan with the Seoul-Busan expressway. Fifty percent of the cost of this project is being met by the city of Busan and fifty percent by the Ministry of Construction. 2.21 Within the definition of existing functions little emphasis and indeed opportunity is given to public transport investment. This is to be expected, since investment in public transport has to date come almost exclusively through the private, and until recently, the informal sector. So, in the City of Busan's current annual budget, while 30% of the total is allocated to road construction (including the city's share of the new container road) no provision is made for investment in public transport. 2.22 The policies to be investigated imply needs for investment in public transport from whatever source is appropriate. A major priority of urban transportation policy will clearly be the formulation of a consistent public transport investment strategy for secondary cities. This would cover both the necessary infrastructure improvements and also investment in new vehicles, both conventional buses and smaller more flexible para-transit vehicle types. By 'para-transit' is meant forms of public transport span- ning the range between conventional busi and taxi services, including jitneys, microbuses, hire cars, limousines and their various forms of organisation. This differentiation of public transport is, where permitted, a response to two main effects of income growth - diversifying demands and rising labour costs, which strongly influences total costs of operation. 2.23 Creating the conditions in which an appropriate investment in vehicles will take place involves a review of organisational arrangements and regulatory and fare control practices. - 28 - (ii) Pricing Policies Car Ownership and Use 2.24 The pricing of car ownership has been the single most effective urban transport policy instrument to date in discouraging private travel demand in Korean cities. The taxes and other imposts together set an exceptionally high price on car ownership. In 1975 for example, the taxes payable on the purchase of an average car (e.g. a Pony), amounted to 42% of the factory price. Taxes levied annually (motor vehicle tax, defense surtax and licence) amounted to an additional 57% of the base factory price. A use tax is also levied on petrol. The time series structure of these ownership and use taxes is set out in Table 9 at constant 1970 prices for those years for which the data is available, for an average family car. 2.25 The Government also levies a National Highway Bond of W500,000 on the purchase of a car, on which the Government pays interest. The purchaser usually finances this bond through a loan raised on the commercial market, and on which he pays the difference between the Government and commercial rates of interest. Finally, this year the Government has imposed VAT at a rate of 10% on the factory price less input cost. This is in addition to the existing taxes on ownership. 2.26 However, while such policies have been effective in the past, maintaining checks on car ownership will imply dramatic increases in taxes given the expected increase in personal income levels. It is possible that the thrust of future pricing policies will have to shift progressively away from taxes on car ownership to taxes on use if future effectiveness is to be maintained. This is an issue to which we return in Section 3. TABLE 9: TAXES ON OWNERSHIP AND USE FOR THE AVERAGE KOREAN CAR TAXES INCLUDED IN FACTS PRICDE IANNUAL TAXES ON OWNERSHIP FUEL FACTORY PRICE YEAR CURRENT FACTORY COMMODITY DEFENCE REGISTRATION MOTOR DEFENCE RETAIL PRICE TAX FACTORY PRICE TAX SURTAX TAX VEHICLE TAX SURTAX LICENSE PER IMP.GALL PER IMP.GALL. PRICE (1970) 1(1970) (1970) (1970) (1970) (1970) (1970) (1970) (1970) (WON) (PRICES) (PRICES) (PRICES) (PRICES) (PRICES) (PRICES) (PRICES) (PRICES) (PRICES) 1965 - - - - - 1966 967,000 1,296,247 129,625 - 25,925 278,820 - 48,257 - - 1967 967 000 1,217,884 121,788 - 24,358 261,965 - 45,340 - - 1968 872,000 1,016,317 101,632 - 20,326 193,939 - 41,958 - - 1969 1,177,619 1,366,147 136,615 - 27,323 181,659 - 39,301 - - 1970 1,400,374 1,400,374 323,163 - 28,008 166,400 - 36,000 30.16 16.58 1971 1,390,548 1,225,152 282,727 - 24,503 146,607 - 31,718 31.71 17.99 1972 1,784,260 1,407,145 324,726 - 28,143 131,230 - 28,391 40.22 22,57 1973 1,890,194 1,445,102 333,485 - 28,902 101,835 - 11,009 43.96 24.69 1974 2,416,439 1,386,125 342,951 - 29,723 81,919 - 8,856 111.00 65.32 1975 2,350,132 1,153,722 186,084 37,219 23,074 98,085 29,426 7,069 93.02 61.28 1976 - - - - - 93,906 28,172 6,787 96.82 63.80 SOURCE: KIST 1977. - 30 - C. Land Use Planning and Environmental Controls Strategic Land Use Planning 2.27 To date the combination of land use policies, notably the green belt policy, and low mobility requirements which result from the low level of personal income has resulted in the evolution of a fairly compact secondary city land use pattern. Mobility requirements have been satisfied mainly by walk, taxi and conventional public transport trips. The current secondary city land use pattern appears to be consistent with the mix of transportation supplies provided (i.e. fairly concentrated development serviced by the walk and public transport modes). 2.28 This 'balance' between land use and transportation is threatened by a combination of factors. First, as we have seen, there is the potential impact of rapidly rising real incomes on the mobility and car ownership expectations of the population. This will inevitably increase the pressures for decentralisation as higher incomes and car ownership levels facilitate the purchase or rent of a greater amount of residential space at a lower cost and greater distance from place of work. Second, as also seen, the new decentralisation policy 1/ will put growth pressures on the secondary cities, and particularly Daegu, Daejon, Gwangju and Jeonju in addition to those which they would have experienced in any event as a result of the previous policy. 2.29 Clearly then there is a need to analyse the likely impact of these changes with a view to the establishment and analysis of consistent future land use and transportation policies. This is taken up in Section 3. 11 Decentralisation Strategy, March 1977. Government of Korea. - 31 - Local Land Use Planning 2.30 Congestion of the road network itself has led some cities, notably Seoul and Busan, to take drastic measures aimed at reducing congestion by the relocation of major generators such as markets, intercity bus terminals and schools outside the CBD. As part of this policy, Seoul's population and employment is being encouraged to relocate at new urban centres south of the Han river, while in Busan, a new industrial centre is being created to the west of the ciLty, and restrictions have been placed on new industrial development within the city. 2.31 In most, if not all, secondary cities there is an urgent need for more consideration to be given to the traffic implications of future local land use policy decisions, if the ad hoc and often ill thought out measures of expediency which are currently the norm, are to be improved upon. Environmental Controls 2.32 Environmental controls on mobile sources (vehicles) are currently enforced through spot checks on vehicle emission levels rather than through legislation designed to make the combustion engine more efficient and hence less of a pollutant. As a result of this policy and the age of the bus and taxi fleet, there are a large number of recorded pollutant violations but little progress towards any improvement in environmental conditions. 2.33 Environmental conditions could potentially be improved in a number of ways, ranging from the production of a more efficient combustion engine to measures designed td' reduce travel demand at source through integrated land use planning. A number of such solutions have been proposed for example, by the United States Environmental Protection Agency in their - 32 - guidelines for the reduction of air pollution through transportation and land use planning. 1/ The potential application of such measures in the Korean context should be investigated. D. Decision Making in the Urban Transportation Sector (i) Road Investment 2.34 This is probably the most clearly defined function within the transportation sector, although there are some major points of uncertainty with respect to functional responsibilities and investment criteria. At the national level, the Economic Planning Board is responsible for the national budget proposal, allocation, and dispersal. The budget proposal task itself is delegated to two national ministries, the Ministry of Home Affairs and the Ministry of Construction. 2.35 The Ministry of Home Affairs is responsible for the co-ordination and approval (but not formulation) of the budgets of the cities and provices which are presented for each sector, while the Ministry of Construction generates many of its own project and budget proposals at the national level. 2.36 The budget proposals of the cities reach the Ministry of Home Affairs by the following process. Proposals are generated by the City Masterplanning process, itself the responsiblity of the Bureau of City Planning. Depending upon city size these masterplans are then taken to the National Planning Review Committee or Provincial Planning Review Committee 1/ "A Guide for Reducing Automotive Air Pollution", prepared for the Office of Air Programs, The Environmental Protection Agency, November 1971 by Alan M. Voorhees & Associates and Ryckman, Edgerley, Tomlinson and Associates. - 33 - for approval. Once approved the projects and an implementation programme are included in the City's annual budget proposals prepared by the City Bureau of Construction which are forwarded to the Provincial Government. The agreed city/provincial budget and the projects within each sector are then sent to the Ministry of Home Affairs, which is responsible for the co-ordination of city/provincial budgets at the central Government level. With respect to the allocation of investment across sectors, in Busan for example, approximately 52% of the City's current annual budget is given over to infrastructure and housing, 60% of which is devoted to new road construction. The self-sufficiency of secondary cities in respect of their budgets is in the order of 48%, although in the case of Busan the figure is close to 98%. The balance of each city's budget requirement is made up through a central government subsidy, but clearly there is considerable pressure on the cities to keep the level of this subsidy low. 2.37 The cities are totally responsible for the planning construction and maintenance of two of the three types of roads within their boundaries: provincial roads and city roads. National roads are the responsibility of the Ministry of Construction. Where a section of a national road crosses a city, although the project responsibility rests with the Ministry of Construction, its costs are met from three sources: Ministry of Construc- tion subsidy, the City's own budget and a national tax subsidy (share of tax) allocation by the Ministry of Construction. In addition, the Ministry of Construction will occasionally contribute to major urban road projects, such as the Busan Container Road, where it is providing 50% of the project cost. - 34 - 2.38 While the smaller cities raise less tax locally for their road building, they are more dependent upon the provincial Government for budget and project approval. This applies equally to all sectors, with less independent sources of funds; they have less freedom to opt for particular solutions to their problems. (ii) Regulatory Policies Car Ownership and Use 2.39 Taxes are levied on the purchase of cars by the Ministry of Finance, as are the annual usage taxes with the exception of license fees. Licenses are regulated by the municipalities. The basic regulatory tool is that of pricing and was discussed in Section 2.B(ii). Public Transport and Taxis 2.40 The Ministry of Transportation has national responsibility for regulating the supply of and pricing policy for buses and taxis. The operation of the policy was discussed earlier in the sections on public transport and is not repeated here. The National Ministry delegates the responsibility for the implementation and monitoring of these policies to the Municipal Bureau of Transportation, while the selection of new operators is, in principle, delegated to the Provincial Governors. 2.41 Fare changes recommended by the Ministry of Transportation are subject to review by the Economic Planning Board, to ensure that they are consistent with national economic policy. Taxi operators applying for licenses have to give proof of assets e.g., office space. (iii) Traffic Management 2.42 One of the major reasons for the ineffectiveness of traffic management in Korean secondary cities lies in the absence of clearly defined - 35 - responsibilities for the planning and implementation of traffic management policy. At the municipal level, the responsibilities of the Bureau of Transportation include the monitoring of traffic conditions, regulation of bus and tvi licensing and fare policy, road maintenance and traffic man- agement. The traffic police are responsible for traffic regulations, safety, traffic signals and enforcement. In practice, however, a good deal of confusion exists with respect to the specific responsibilities of the Bureau of Transportation and Traffic Police. (iv) Land Use 2.43 Insofar as the urban transportation sector is concerned, the formulation of each city's land use policy is the responsibility of the Bureau of City Planning, which in turn receives its guidelines for the preparation of these plans (e.g., extension of the green belt to avoid urban sprawl) from the Planning Review Committee of the National City Planning Bureau of the Ministry of Construction. The Bureau of City planning is also responsible for the City's strategic transportation planning. However a number of land use decisions are also made outside this framework. In Busan, for example, there is a special urban planning committee to deal with short term problems. Their recommendations go direct to the Mayor for approval and then to the National Ministry of Construction. These short term problems and proposed solutions invariably relate to the reduction of special traffic generators, and the prohibition of new building permits. - 36 - 3. THE ANALYSIS OF FUTURE TRAVEL DEMAND AND POTENTIAL STRATEGIC POLICY ALTERNATIVES A. Introduction 3.1 The analysis of the existing characteristics of demand for mechanised travel, its likely future growth, and the policies and instru- ments used to influence it leads to a number of questions for future urban transportation policy making at the strategic level. A very large increase in mechanised trip-making can be foreseen. Despite the present high level of taxation levied on car ownership, the forecast growth of personal incomes is likely to bring about a shift in the existing structure of these trips towards the rapid growth of car ownership and use. 3.2 Such changes are likely to be influenced greatly by the future growth of the secondary cities and the consequential development pressures leading towards suburbanization. Korea will experience these pressures strongly. In other countries, similar pressures have further encouraged car ownership, and major investment in road construction. This has discouraged the use of public transport, the operators of which find themselves facing higher costs and a progressively diminishing share of the total mechanised travel market. A declining central area has usually been associated with these developments. 3.3 To date Korea has successfully avoided the problems which would follow from the progression of events described above, and which have afflicted almost all other developing countries of comparable income levels. However, because the pressures leading in the direction of such changes are certain to increase, it is essential that alternative means of - 37 - meeting and influencing future travel demand are examined at a strategic (city wide) level. 3.4 The remainder of this section is concerned respectively, with specifying the alternative strategic policies that have been selected for analysis, describing the methodology on which the analysis has been based, and presenting the findings of the analysis. The detailed methodology workings and results of the analysis are presented in Appendix C. 3.5 The findings of this analysis, together with our conclusions on existing conditions, then provide the basis for our recommendations which are set out in Section 4. B. Specifying the Strategic Policy Alternatives 3.6 Taking as a starting point the analysis of existing demand char- acteristics relative to the instruments that are used to meet and influence demand in Korean secondary cities, and anticipating the changing structure and greater magnitude of the future demand problem, we believe that the most effective strategic means of providing for and influencing future demand are as follows: (a) manipulation of demand through regulatory and pricing policies (e.g. ownership and use taxes); (b) organisation of the forms of supply which are to be encouraged (e.g. public transport); (c) establishment of urban land use forms consistent with (a) and (b); and it is on this basis that we set up and tested a range of policy alter- natives. - 38 - 3.7 It will be seen that, associated with each means of influencing demand are anticipated levels of trip-making, and corresponding investments in transport plant (roads) and equipment (vehicles) for the level of trip- making. Thus aggregate costs of transport provision, including the time costs trip-makers themselves expend in travelling, are generated. These different aggregate total costs and their associated trip-making character- istics comprise the transport implications of policy choices. They repre- sent inputs to decisions which will concern far wider issues - housing policy for example - with which we are not concerned directly here. Judging how many trips to encourage, at the costs specified, must be accomplished when the other secondary city urban sector studies are set beside this one. In the sphere of transport itself, however, we are able to make judgements about the relative efficiency and equity of the alternatives. 3.8 We have forecast for 1985 for the 'average' city the outcomes of adopting alternative land use and car pricing policies in the context of growing incomes, demands for mechanised travel, and levels of car owner- ship. Four future land use policy assumptions have been examined, each of which distributes a given forecast increase in population in the 'average' city 1975-1985 across the city in such a way that a desired change in the average population density between 1975 and 1985 is achieved. The different densities imply different car ownership levels and trips. 3.9 The outcomes of Lhese policies have been examined firstly in a situation in which the relative prices of transport have been kept at their 1975 levels and second in a situation in which the prices of car travel relative to other modes have been altered either by imposition of extra taxes upon car ownership or by altering the relative prices for the use of - 39 - cars and public transport in the 'average' city. The implications of the latter have been examined more fully than the implications of increasing taxes on ownership simply because of the high levels of increase which we estimate will be necessary to achieve the postulated reduction in the forecast levels of ownership. 3.10 We assume that, in fixing taxes or prices, a target level of impact is aimed - e.g., to restrain trip-making to a lower level. One way to alter relative prices of car use and public transport is to impose taxes on car use. Under each alternative land use option this will lead to two effects - the suppression of some trips and the diversion of others to public transport, buses or taxis. To investigate the implications of differential pricing for cars and public transport, however, we have assumed that total trip-making will remain unchanged as between pricing policy alternatives within each land use option. Thus, those trips that would otherwise be made by car all appear on the public transport system. This is in order to allow for another policy option - to lower the prices of public transport to attract car users to it. 3.11 The practicality of these policies depends of course mainly on the quality of the public transport offered. For analysis purposes, we asso- ciate high quality with the introduction of a flexible, intermediate type of transit system e.g. microbuses. Currently, the taxi comes closest to such a system in Korea, despite its obvious shortcomings and bad image. In this report we continue to assume the use of taxis as a way of describing such an intermediate type of system. Lower level of service is associated with a conventional bus operation, although a reduction of 20% has been assumed in occupancy level, so as to allow far more comfortable future travel conditions. - 40 - 3.12 Each of the policy alternatives is described briefly below, with the outcomes of the land use policies in 1985 in terms of population area an& average density summarized in Table 10 and compared with the 'average' city characteristics in 1975. (i) Land Use Policies 3.13 Policy of Maintaining 1975 Average Population Density ("Existing Density"). Under this policy the extent of the urban area in our average city is allowed to increase so that average density remains at its 1975 level in the face of the average forecast increase in population for the four cities. 3.14 Policy of Concentration. The existing land area of the city is assumed to absorb the forecast increase in population. 3.15 Policy of Dispersion. This policy assumes a decline in average population density with the area of the average city rising considerably under this policy in the face of the population growth forecast. 3.16 Green Belt Policy. This policy directs all forecast population growth into two new satellite cities of equal size outside the green belt, with the population and land area of the existing city remaining constant over the forecast period. (ii) Pricing Policies 3.17 To explore the consequences of adopting different pricing policies we first nominate z' tj- E0 TABLE 31: ESTIMATED OPERATING COSTS PER DAY, CAR, TAXI, BUS (000 WON ) 1985: Alternative Land Use Ontions After 1985: Alternative Land Use Options After Effective Car Use Pricing Existing Concen- Green Existing Concen- Green Density trated Dispersed Belt Density trated eBeltd .17,658 13,365 26,566 17,342 Cars 2,702 20,414 15,451 30,711 20,048 23,170 17,537 34,858 22,755 117,500 14,967 22,187 16,335 Taxis 3,145 7,524 7,207 7,795 6,664 2 7,524 7,207 7,795 6,664 132,058 33,322 29,529 31,335 Buses 14,720 32,058 33,322 29,529 31,335 235,264 36,076 33,683 34,857 167,216 61,654 78,282 65,012 Total 20,567 59,996 55,980 68,035 58,047 265,958 60,820 76,336 64,276 SOURCE: Nathaniel Lichfield and Partners, 1977 NOTES: With person trips transferred to taxis following reduction of car trips by 25% after effective car use pricing 2 With person trips transferred to buses following reduction of car trips by 25% after effective car use pricing :3-. - 158 - APPENDIX C to motorists. The higher running cost is imposed where the lower quality alternative, represented by buses in our model, is offered and vice-versa. The increase in car trip costs are of course only an additional cost for car users, the whole increase transferring to Government in tax revenue. With and without use-pricing costs are highest under the dispersed option and lowest under the concentrated option. With car-pricing operating costs are however lower with the bus style alternative. Summary of the Costing Exercise 97. Table 32 summarises the results of the costings. Vehicle replace- ment costs have been expressed on a simple daily basis so that they can be included with the other daily costs incurred, time costs and vehicle opera- ting costs. The additional tax element included in vehicle operating costs following car use pricing is also shown. Capital costs (road construction and costs of additions to vehicle stocks) are shown as they are calculated, rather than on a discounted basis, for simplicity. The two groups of costs clearly show the trade-offs between policy options which the model indicates. 98. By far the most costly policy, both with and without car use pricing and on a daily or capital cost basis is the policy of dispersal. On a daily basis this is the most costly policy overall if adopted in conjunc- tion with car use pricing and a bus style public transport alternative. On a capital cost basis this land use policy is most expensive overall if adopted without a policy of pricing car use. The least expensive combination of policies on a daily basis both with and without car use pricing is the Green Belt policy, although least expensive overall is the Green Belt policy without a policy of pricing car use. TABLE32: SUMMARY OF COSTS 1985 1985: Alternative Land Use Options 1985: Alternative Land Use Options After Effective Car Use Pricing DAILY COSTS EXISTING CONCEN- GREEN EXISTING CONCEN- GREEN DISPERSED DISPERSED DENSITY TRATED BELT DENSITY TRATED BELT Daily cost of travel 235,989 241,441 229,415 220,048 237,844 250,007 231,794 222,054 Lime ('Co0 won) 2243,450 254,244 240,177 227,280 Daily vehicle operating 5 57,216 61,654 78,282 65,012 costsOper 59,996 55,980 68,035 58,047 -- cn 2 65,980 60,280 76,336 64,276 Daily vehicle depreciat- 32,405 27,356 41,838 35,129 ion costs ('OOOewon) - 32,022 27,447 40,677 3,512----2 2-32,071 27,356 41,132 34,641 Total daily costs 328,007 331,868 338,127 32,607 337,465 339,017 351,914 322,195 ('000 won) 3807 3188 3817 3267 24,7 4,2 5,4 2,9 CAPITAL- COSTS I Costs of additions to vehicle stocks 48,602 40,248 64,398 53,153 49,301 40,082 66,520 54,274 (millions won) 2 48,695 40,088 65,226 53,387 Road Construction Costs 118,410 102,228 151,500 113,700 4 101,865 148,843 112,373 (millions Won) 107,179 94,449 132,902 103,556 Total capital costs 1 166,745 141,947 215,363 166,646 167,012 142,476 215,898 166,853 - -- - -- - -- - - - (millions won) 1 f155,874 134,587 198,128 156,943 SOURCE: Nathaniel Lichfield and Partners, 1977 NOTES: 1With person trips transferred to taxis following reduction .of car trips by 25% after effective car use pricing 2With person trips transferred to buses following reduction of car trips by 25% after effective car use pricing 30f which adlitional tax element after effective car use pricing is as follows: Existing Density Concentrated Dispersed Green Belt Additional Tax element in user 2,348 1,777 3,532 2,306 operating costs ('000 won) 7,859 5,949 11,824 7,719 - 160 - APPENDIX C 99. On a capital cost basis a policy of concentration proves least expensive both with and without car use pricing, the combination of con- centrated population and car use pricing in conjunction with a bus style alternative being the least expensive overall.