[EDITORIALS]Rail plan a big step backThe presidential transition team has presented a revision to the plan for privatization of rail, gas and electricity industries. It includes establishing a public corporation for rail and scaling down privatization of gas and electricity industries. The draft gives the impression that concerns over a retreat from the privatization of the public sector have been justified. The plan to turn the rail industry into a public corporation is a significant regression from the original plan. The transition team says it will be privatized eventually, but the guidelines of the new government’s economic policy indicate that possibility is remote.
There had been pros and cons on privatization of public industries. After several years of heated debate, it has been decided that privatization is the only alternative. It is hard to understand that the team has chosen a public corporation, the symbol of inefficiency, as its alternative. We hope that the decision is not the result of a reading of labor’s face or insistence on the team’s economic line instead of considering economic efficiency.
When the rail industry is privatized, there can be problems of fare hikes and abolition of uneconomic routes. Korea’s rail industry, however, was burdened with 8.4 trillion won ($7.2 billion) of debt in 2001, and that is expected to grow to 28 trillion won by 2020. Without a groundbreaking decision, the burden will be on the people’s shoulder. Considering that there are only a few countries that have government-run rail service, privatization is the trend.
Privatization of the rail service can influence national competitiveness. This is the reason why we have had a hot debate on the issue. We paid a big price through labor strikes before agreeing on privatization. Privatization of public firms attracts attention from overseas, too. If the principle and direction of privatization is changed with a change of regime, how can overseas investors come to Korea? There will be hot debate over the issue at the National Assembly. We look forward to see a wise solution.
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