GNP puts brakes on bid to privatize bullet train

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GNP puts brakes on bid to privatize bullet train

The dispute over privatization of the country’s high-speed KTX trains has degenerated into a political issue as the ruling Grand National Party’s Emergency Leadership Council decided to put a halt to the plan.

Despite such resistance, the Ministry of Land, Transport and Maritime Affairs, which has set the plan as one of the major priorities for this year, expressed that it will push ahead with the plan despite having to persuade the ruling party.

When the plan was first proposed by the Transport Ministry on Dec. 27 last year, it called for two new privatized bullet-train routes connecting Suseo in southern Seoul to Busan, as well as Suseo to Mokpo, South Jeolla, scheduled for 2015.

Korail and opposition lawmakers rose up in major opposition insisting that the new policy would undermine the train’s public purpose and raise train fares.

The Transport Ministry explained that the plan was proposed in an effort to clear the debt of the state-run Korail, which has been running a deficit of 15 trillion won ($13 billion). Korail has been spending about a third of KTX’s revenue of 100 billion won on interest payments annually, according to the Transport Ministry.

It has argued that the new plan will lower ticket prices by 20 percent and boost the efficiency and competitiveness of the currently flaw-ridden KTX and explained that “it is inevitable to allow private companies to take part in business competition in order to reduce the government’s financial burden.” Korail has been monopolizing the country’s railway management for 113 years.

However, criticism has been rising saying that it is only the latest in the string of pro-business policies of the Lee Myung-bak administration as it is also pushing ahead with privatizing airports and allowing for-profit hospitals.

Following the resistance from Korail, the GNP’s Emergency Leadership Council officially announced that it also opposes the administration’s new policy.

GNP spokesman Hwang Young-cheul said during a press briefing on Thursday that “there’s fierce public concern and opposition against the privatization of the country’s KTX system,” and urged the ministry to rescind the new policy.

Opposition lawmakers Kim Jin-ai and Kang Ki-kab also said in a joint statement that “the plan will inevitably result in privatizing the system, which will cause poor maintenance and jeopardize passenger safety as private owners will consider moneymaking as their first priority.”

Major corporations make up the only group that is welcoming the plan to break down Korail’s monopoly. Twenty companies including Doosan, Dongbu and Kumho Asiana attended the business information session.

By Yim Seung-hye []
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