Interest-bearing debt at Seoul's three largest public companies compounded 10.8% a year since 2021

Add up the three companies' financial debt and the total is 9.19 trillion won for 2021 (3.60 trillion at Seoul Metro, 5.50 trillion at SH, 89.5 billion at Seoul Energy) against 13.85 trillion for 2025 ^{[5][9][13][1][2]}. That is a 50.8% increase over four years, against 21.7% for liabilities as a whole ^[3][2]. Debt carrying principal and interest repayment obligations was 37.6% of the combined book in 2021 and 46.6% last year ^[3][4]. Compounded, the financial debt line grew about 10.8% a year, which doubles it in under seven years ^[5][14].

Most of the increase sits at one company. Combined liabilities rose 5.30 trillion won, and SH's own increase of 3.95 trillion is 74.5% of that ^[6][7]. Nine-tenths of SH's increase is interest-bearing, its financial debt accounting for 3.55 trillion of the 3.95 ^[8]. The council's analysis pointed to large-scale urban development investment, limited profitability in public rental housing and the presale structure, in which spending comes before revenue is recovered ^[11].

The ratios moved for two different reasons. Taking debt-to-equity as liabilities over equity, Seoul Metro's 6.61 trillion won at 77.9% implies 8.49 trillion of equity in 2021, and its 7.76 trillion at 96.6% implies 8.03 trillion in 2025, a fall of about 5% ^[4][6][9]. At Seoul Energy the implied equity drops from 331 billion won to 220 billion, roughly a third, while liabilities more than doubled to 375 billion ^[12][14][10]. SH's implied equity rose about 977 billion won to 10.49 trillion, so its ratio climbed to 205.8% on a capital base that was growing ^[8][10][11].

"Structural costs that arise when providing public services and carrying out policy programs are difficult to resolve through the efforts of local public corporations alone," the report said ^[17]. It added: "There is a need to review reasonable cost-sharing and institutional support measures at the level of local governments and the central government" ^[18]. At Seoul Metro the report traced the losses to low fares, the provision of public-interest services and investment needed on aging facilities ^[7]. It did not put a figure on what cost-sharing would cost either government.

In my view the interest-bearing line is the one City Hall has to fund with cash every year, and at 10.8% compound growth the size of the eventual appropriation is set now, not when the report is next revised. Two readings cut against that. SH's 9.05 trillion won of financial debt is tied to a presale cycle in which outlays precede receipts, so part of it should unwind as units settle, without any policy decision at all ^[9][11]. And Seoul Energy's 206.5% jump in financial debt runs off an 89.5 billion won base, on a company whose 375 billion of liabilities is 1.3% of the combined 29.71 trillion ^[13][12][12].

The case would fail on plain evidence: SH's financial debt falling as presale money lands, and Seoul Metro's reliance on borrowing dropping back toward the 23.9% of 2021 with no fare change and no city appropriation ^[6].