[Anchor]

Recently, local governments across the country have been rushing to launch cable car projects in a bid to boost local economies. However, an analysis of the operational performance of these cable cars reveals that a significant number are suffering from continuous deficits.

Reporter Jang Seon-i investigated the scene to find out why.

[Reporter]

This is the Hadong Cable Car in South Gyeongsang Province, which commands a panoramic view of the southern sea.

Contrary to expectations that tourists would flock to the site, it has recorded losses every year since its opening in 2022, with last year's losses approaching 5 billion won.

Before its opening, the cable car set a target of attracting up to 1 million visitors annually.

However, the actual number of passengers who rode it last year stopped at 150,000.

[Jeong Hyun-seok / CEO, Hadong Cable Car Operator: Amid cities with established regional recognition like Yeosu, Tongyeong, or Geoje, it is somewhat difficult for people to recognize Hadong as a tourist destination....]

Other cable cars along the south coast also have passenger numbers so low that they render the initial projections meaningless.

An SBS analysis of the financial performance of private cable car operators that have publicly disclosed audit reports showed that all five opened since 2020 have recorded net losses, bringing their cumulative net losses over four years to 50 billion won.

Four out of the five operators are struggling to generate enough revenue to even cover the interest on their loans.

The Mungyeong Saejae cable car project is being pursued using municipal budget by Mungyeong, North Gyeongsang Province.

Surging project costs and controversies over profitability have left the project on the verge of stalling.

The city projected that 1.06 million people would steadily ride the cable car every year for 30 years. To achieve this, 60 percent of the visitors to the Namsan Cable Car in Seoul or more than half of all visitors to Mungyeong Saejae would have to use it.

[Moon Sang-woon / Director, Mungyeong Saejae Management Office: At that time (during the past survey), a preliminary feasibility study was conducted to push forward the project. So, in a way, it could be seen as somewhat inadequate.]

Construction has already begun, but Mungyeong will decide in December whether to continue or halt the project.

With 24.0 billion won from the budget already injected, local public opinion is stirring.

[Shin Yong-jun / Mungyeong, North Gyeongsang Province: The problem started with the feasibility review itself. I think pushing the project forward recklessly is the biggest issue.]

[Kim Beom-ju / President, Mungyeong Saejae Merchants Association: (I think) that if we create a skyway (using a cable car) to attract tourists, Saejae can develop most effectively. It could also revive the commercial district.]

Experts point out that the central government needs to jointly verify demand forecasts that have been left up to local governments.

[Jeong Byeong-ung / Professor Emeritus, Department of Tourism Management, Soonchunhyang University: Whenever feasibility studies are commissioned, they all project rosy and optimistic outcomes, and overlapping investments are taking place among neighboring local governments. I hope provincial governments or central ministries step in to control this.]

Amid ongoing controversies over failed demand forecasts, there are currently 15 new tourism cable car projects being pursued nationwide.

(Video Journalist: Cho Chang-hyun, Video Editing: Lee Sang-min)