Ministry mulls new operator for high-speed rail

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Ministry mulls new operator for high-speed rail

The government is considering a second state-run company to operate the new Korea Train Express (KTX) business, a high-speed railway system, in a bid to increase competition in the railway industry. Currently, Korea Railroad (Korail) is the sole KTX operator.

The Ministry of Land, Transport and Maritime Affairs said in release yesterday that nothing has been decided. However, it admitted that setting up a new public firm to operate the new KTX service, which is scheduled to be launched in 2015 from Suseo Station in southern Seoul, is under consideration. Sources said the ministry is expected to report its plan to President Park Geun-hye next week or so.

Seo Seung-hwan, minister of land, transport and maritime affairs, said during his confirmation hearing the ministry will find a “third solution” on the new KTX business.

Saenuri Party lawmaker Cho Hyun-ryong also said he will propose a law to establish a second state-run railroad operator.

Korail’s debt totaled 13.5 trillion won ($12 billion) at the end of 2011 and is suffering from the failure of the Yongsan International Business District development project.

But not all parties welcome the idea. The Transport Labor & Policy Research Institute issued a report last week, saying establishment of another public railroad operator will create more problems.

“There will be no effect of competition as regional monopoly will be strengthened,” the institute said in its analysis report. “The cost of establishing the new firm will be 300 billion won to 400 billion won, and an additional 60 billion won will be needed every year for operation.”

Currently, some transportation-related business is double operated in Korea. For instance, Seoul subway system is managed by Seoul Metro, which covers lines No. 1, 2, 3 and 4, and Seoul Metropolitan Rapid Transit, which covers lines No. 5, 6, 7, and 8.

By Joo Kyung-don []
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