January 25, 2012

Korail fights HS privatisation plan

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KOREA's national train operator, Korail, is fighting government plans to privatise the operation of a new high-speed service between Seoul Suseo and Busan and Mokpo when a new line opens in 2015 between the Suseo district of Seoul and Pyeongtaek on the existing high-speed line.

The Ministry of Land, Transport & Maritime Affairs says it wants to break Korail's passenger rail monopoly and introduce competition as a means to cut train fares. The ministry plans to invite tenders this month for a 15-year concession to operate the new high-speed service and to select a private operator by June. Korail claims that allowing a private operator to compete with its own KTX services could force fares up as the new operator would have to pay for additional facilities such as a depot and control centre. Korail says KTX is profitable and that if the government wants a better deal it should start by putting loss-making conventional services out to tender. KTX traffic increased by 20% last year, despite technical problems with its KTX II trains, and topped 50 million journeys for the first time.

Around 2000 mid-ranking Korail employees are to file a libel suit against Korea's Transport Institute for its claims that a private high-speed operator could offer fares 20% below those of Korail. "This falsity has tarnished Korail's public image and depicted it as an inefficient organisation," says a Korail official. "To hold the institute accountable for its unfounded assertion, we decided to take legal action."

The government has cancelled plans to build a high-speed line from Seoul's Incheon International Airport to Pyeongchang, the venue for the 2018 Winter Olympic Games. The project would have cost Won 10 trillion ($US 8.6bn) but the government says demand after the games would be too low to justify the investment. Cheaper conventional rail options are now being considered.

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