MOUNTED on the wall of Dr Choi Yeon-Hye's office in Seoul station is a large map of the Eurasian continent featuring all of the primary railway arteries that link east with west.
The Baikal-Amur Mainline and Trans-Siberian Railway are shown as expected, but poignantly so is the Trans-Korean railway. Running from the South Korean port of Busan via Seoul and crossing the de-militarised zone at Munsan in the south to Kaesong in the north, the railway continues, on the map at least, to Pyongyang where it splinters north into China and northeast to meet the Trans-Siberian in the Russian city of Khasan, southwest of Vladivostok.
While north-south services ceased in 1951 during the Korean War, which was followed by the division of the country at the 38th parallel in 1953, the railway tracks remain as one of the few physical connections across the most fortified border in the world.
Services were briefly restored to the railway in May 2007 when two five-car passenger trains, one from the north and one from the south, crossed the border. Each carried 150 passengers and marked the conclusion of an extensive South-funded rehabilitation programme to the railway. Hyundai Construction carried out the work on the 16km line from Munsan to Kaesong Industrial Park, where around 53,000 North Koreans work for South Korean companies as part of an economic reconciliation initiative.
Passengers on those trains, including a conductor who made one of the last railway crossings before the war, heralded the journey as a day they never thought would come. Other bystanders waved blue and white flags to symbolise reunification, while South Korean unification minister Mr Lee Jae-joung expressed his hope for the start of a new era in north-south relations.
Unfortunately the trial run was as good as it got. The South's hope for a regular freight service never really materialised. A generally poorly-loaded freight train operated for symbolic rather than commercial purposes, completing the journey daily until December 2009 when the North closed the border after accusing South Korea of adopting a confrontational policy.
The generally turbulent relationship between the North and South took a turn for the worse following the succession of Kim Jong-un as North Korea's supreme leader after the death of his father Kim Jong-il in December 2011. The perceived threat of nuclear assault was ramped up as the new leader attempted to assert his authority, putting any thoughts of reconnecting the railway on the backburner.
After a difficult 2013 and the closure of Kaesong for five months, the mood looks to have eased somewhat with the North seemingly more open to improving economic ties with its nearest neighbours. The thaw may prove a temporary phenomenon given Kim's unpredictable nature. But with Choi at the helm of Korail, there appears to be a fresh approach and impetus for restoring the railway link and eventually transporting South Korean goods through the Korean peninsula and via the Trans-Siberian to the rest of Eurasia.
Choi studied for her doctorate in management at Mannheim University in Germany in the late 1980s and she told IRJ that she takes heart from the experiences of her adopted country at the end of the Cold War.
"Germany was reunited while I was studying there and I believe Germany's transport and traffic policy contributed significantly to the reconnection of the East and West German people and also the peaceful reunification of the country," Choi says. "I hope that Korea's railways will play the same role in the relationship between North and South Korea."
Choi was the first South Korean high-ranking official to visit the North's capital since 2007 when she took the train from Beijing to Pyongyang to participate in the 29th conference of the Organisation for Cooperation Between Railways (OSJD) at the end of April. While the Korean Transport Ministry has been denied membership due to the requirement for all new members to receive unanimous acceptance and North Korea rejecting its application, the ministry has become an affiliated enterprise.
Choi says that as the eighth largest trading economy in the world with annual trade volumes of more than $US 1 trillion, there is significant demand for Korean goods. However, the country is currently hamstrung by its inability to move freight by rail, relying on ships from the southern port of Busan at the tip of the Korean peninsula.
"Currently we have to detour our freight to use maritime transport so it takes about four weeks to go from Korea to Europe," Choi says. "By rail it could take just 15 days, a reduction of almost 50% in travel times. This would greatly reduce costs and will help the Korean economy to grow further. The chairman of OSJD said that Korea is a well-developed industrial nation and with its large volumes of trade expectations are high for Korean railway's future role."
Trade
Increased trade and interaction with fellow Eurasian countries is a key part of the North Korean policy of South Korean president Ms Park Geun-hye. Her Eurasian Initiative, announced in October 2013, aims to achieve joint prosperity and peace in the entire Eurasian continent by building trust and cooperation among the member states. The reconnected railway is the centrepiece of this strategy which Park has labelled the "Silk Road Express," likening it to the historic trade routes from Busan through North Korea to China, Russia and Europe.
Choi shares this view, and says that if realised, Park's initiative will prove hugely beneficial to the future prosperity of Korail and Korea.
"What's more important with the new railway connection is that we develop new railway markets which will result in new demand and an explosion in economic development in the Eurasian continent," Choi says. "At the OSJD conference I found that its members are seeking new momentum for their respective economies, with an emphasis on an economic growth through railway transport. In this regard, if Korea does become part of the Trans-Eurasian network then this will contribute to their growth and development."
Choi says in particular access from the Korean peninsula to Russia's vast natural resources in the Siberian region is a major attraction. This is a view shared by Russian Railways (RZD) officials who seemingly have a big role to play in any railway reunification project.
Indeed rather than a South Korean-led construction project into North Korea, RZD's 54km link from its terminus of the Trans-Siberian at Khasan to the North Korean port of Rajin, appears the key step towards a railway restoration.
RZD says that the Roubles 9bn ($US 261.2m) rehabilitation project, which was completed in September 2013, involved relaying 54km of dual-gauge (1520mm and 1435mm-gauge) track and the refurbishment or replacement of 18 bridges, 12 culverts and three tunnels with a combined length of 4.5km. The project was carried out by the RasonKonTrans joint venture, which is 70% held by RZD and 30% by the Port of Rajin, and includes construction of a new intermodal terminal at Rajin in the Rason Special Economic Zone.
While the line is yet to open to regular traffic, RZD operated two freight trains consisting of 65 loaded coal wagons on the line in April, with the aim of improving the transport process, customs clearances and freight handling at the port which was scheduled to open on July 18.
RZD is targeting annual volumes of four million tonnes on the line by October 2015, and there is an appetite to increase this further. The government has attempted to expand its trade with eastern neighbours, including North Korea and China, in light of the economic sanctions from the west as a result of the Ukrainian crisis. It is aiming for $US 1bn of trade with North Korea by 2020, following a 64.2% increase in 2013 to $US 112.7m.
Among the steps taken is a 30-year gas deal signed by state-owned Gazprom and China worth $US 400bn in May, while the Russian president Mr Vladimir Putin agreed to write-off 90% of Pyongyang's Soviet-era loans, leaving $US 1bn to be repaid over the next 20-40 years. The government has also agreed to conduct trade with North Korea in Roubles and to invest in Kaesong, which could be good news for the railway line to the South. A long-delayed gas link from Russia to the Korean peninsula also remains on the table.
"We have agreed to launch trilateral projects between Russian, North Korea and South Korea with a focus on the railway project," Russia's minister for far east development Mr Aleksander Galushka told the sixth annual Russian-Korean meeting on trade, economic, educational and scientific cooperation in Vladivostok in June. "It's important to extend the Trans-Siberian Railway to the Korean peninsula. It will serve to stabilise and improve the situation on the Korean peninsula as a whole."
While all three parties are yet to sit around a table and discuss the project, a Korean consortium of Korail, steel producer Posco, and Hyundai Merchant Marine signed a memorandum of understanding with RZD on November 13 2013 to conduct an on-site feasibility study of the 54km link with a view to investing in the project. The first round of the study was completed in February with the second round commencing in July, and is set to be finalised this month.
Choi says that Korail's participation depends on the findings of the feasibility study and that she expects a decision by the end of the year. Indeed if the study finds that the project is viable, it is her hope that North Korea would be interested in the South's involvement given the mutual benefits for all involved. "My impression in Pyongyang was that the North Korean people also have a lot of interest in the railway," she says.
As for a long-term plan to rehabilitate the remainder of the North Korean network, whether this is a Russian-led or a joint project with South Korea, it is clear that a major investment of money and manpower is required to bring the railway up to a standard where long-distance high-axleload freight services become viable.
Details of the quality of North Korea's existing network are generally scarce, but data retrieved from Korean Railway Network Authority (KRNA) reveals that it is in a poor state, with track and trackbed condition a particular problem. Speeds vary from 23km/h on the 445km Pyongyang - Hye San line where journeys now take 19h 20min, to 60km/h on the Pyongyang - Sinuiju line which offers a 3h 45min journey on the 225.2km route. Speeds on the network's seven other lines do not exceed 40km/h, offering similarly ponderous journey times.
Happiness for all
In January, around 100 days following her appointment as president and CEO in October 2013, Choi set about establishing a new philosophy for Korail: Happiness for all. She says the aim of this vision is to make the Korean railway an integral part of Korean culture and establish it as a force that improves the quality of life for not only the company's passengers, but all Koreans.
The philosophy is evident in the launch of tourist trains that have revitalised loss-making branch lines in certain areas of the country and "Korean Wave trains" which have brought Korean cultural icons and popular music stars closer to their fans on special train journeys. Choi says the global success of Psy's Gangnam Style and subsequent increase in interest in Korean culture sparked the development of such a service.
Happiness for all is reflective of both Park's view on domestic policy, after she declared in her inaugural address that she wants Korea to be a "happier" place, and a return to a reconciliatory approach towards the North following the stern line taken by her predecessor as president Mr Lee Myung-bak.
Lee cut off dialogue and humanitarian aid in response to the torpedo attack on South Korea's naval ship Cheonan in 2010 and Pyongyang's continuing refusal to end its nuclear weapons programme. After assuming office in January 2013, Park promised to reengage with the North in a three step policy, which begins by securing peace and is followed by economic and finally political integration. The heightening of tensions in 2013 has so far made this a difficult promise to keep, and for now the policy remains on hold. But the railway does offer a ray of hope.
By promoting Korail domestically as spreading happiness to all Korean people while highlighting the powerful symbolism of the railway as a force for reunification and mutual economic benefit, it may be possible for Choi and president Park to sell the ideal of the Silk Road Express policy to its hostile neighbour, and succeed where others have failed.
"Because we are a divided country there are high expectations on Korea's railways to potentially bridge this gap," Choi says. "People not only expect us to play a role as an industrial tool, but a bigger role for the nation as a whole. Everyone in Korail, including myself, is making every effort to play this role and become a public company loved by the public."
The next opportunity for interaction with Choi's North Korean counterparts is likely to occur in Seoul next May when Korail hosts a roundtable of the OSJD's general directors.
Choi pitched the idea for Korail to host the event during the conference in Pyongyang. She said that her offer was welcomed by the other members, but was met with no comment by the North Korean delegation.
Rather than taking this as a snub, Choi says she felt optimistic that the offer would be given careful consideration and that the North Korean diplomats could take the symbolic step across the border to the South.
If this does indeed happen it could signal the start of the extensive interactions and negotiations critical to the success of the railway reunification project. And with the Russians seemingly keen to act as an intermediary, there appears to be real reason for Choi's quiet optimism.
"I hope they will come," she says.
Curbing domestic railfreight losses
DEVELOPING the Trans-Korean railway obviously offers great potential to grow domestic railfreight in South Korea. At present losses from railfreight services are hampering Korail's overall performance and since taking on the role of president and CEO last year Choi says she has acted to try and curb this trend.
Among the steps already taken is the reduction of sidings from 127 to 80, which Choi says has helped to cut costs significantly. Other measures include deploying block container trains, and signing annual or multi-year contracts with shippers in order to stabilise demand.
"My freight transport policy is not simply about reducing the freight transport business of our company, but more about strengthening its competitive edge in order to adapt it to contend with future trends," Choi says. "By adopting such efficient cost-management strategies in the freight sector, my plan is to record an operating profit very soon."
In the future she adds that Korail is looking to increase paths for freight trains in order to boost service availability and encouraging the government to invest in infrastructure to make it more conducive to freight transport. This could allow the introduction of trains with 50 rather than 30 wagons, which is the current maximum train consist on the Korean network.
With up to 60% of Korea's freight volumes currently joining the network at Seoul from where it is transported to Busan as well as other port cities, Choi says that reopening the Trans-Korean link would offer huge potential to increase railfreight network capacity, turning a loss-making enterprise into potentially one of the jewels in Korail's crown.
