characterised by climate change, and dwindling resources resulting in
high oil prices. Use of fossil fuels has raised the average world
temperature by 0.74oC during the last 100 years leading to dramatic
climatic catastrophes such as floods and heat waves causing loss of
life and property damage. The surge in international oil prices greatly
shocked the world economy when the price of oil passed $US 126 per
barrel last year, compared with $US 22-27 a barrel during the early
part of the decade, and the current price of $US 65.
With these crises
in mind, the Korean government has adopted a policy of "Low Carbon,
Green Growth" which is at the core of its effort to improve the
country's competitiveness. The government recognises the conventional
economic growth model focusing on industries which either use large
amounts of raw materials or which cause heavy pollution is also
economically undesirable, as the long-term costs of cleaning up the
pollution can be greater than the initial profit. Another factor behind
the government's new policy is the increased international regulations
and mutual assistance activities on climate and environment protection.
It is also possible that from 2013 Korea might be included in the group
of countries endeavouring to reduce greenhouse gas emissions.
As part
of realising the new national vision, the government highlighted rail,
along with coastal shipping and cycling, as green modes of transport
and more importantly, announced a plan to increase rail's market share
of freight transport to 15% by 2012. The 2009 railway budget was
increased by 19.7% to Won 6443.9 billion ($US 5.16 billion). In
particular, the rail construction budget was expanded by a massive
36.3% to Won 4587.4 billion.
It is true that rail investment in Korea
was inadequate for many years. Highway infrastructure has quadrupled
since 1961 while that of rail is virtually the same. As a result,
rail's share of passenger traffic has dropped from 53% in 1961 to just
7.8% while its share of freight traffic has declined even more from 88%
to 6.2% over the same period.
On September 18 we will
celebrate the 110th anniversary of the opening of the first railway on
the Korean peninsula. It is very fortunate therefore, if somewhat late
in the day, that rail's importance and its role in national transport
is now at the top of the agenda and the government has transformed its
rail policy.
The economic value and environmental friendliness of rail
is crystal clear. For example, the electricity bill for a KTX
high-speed train travelling the 400km from Seoul to Busan with 935
people on board is Won 1.08 million. If these 935 people travel by car
instead, with four people per car, it would cost a total of Won 21
million in petrol and tolls. That means using a car is 20 times more
expensive than travelling by train. With only a 1% increase in
passenger traffic, rail can reduce energy and CO2 emission costs by Won
600 billion a year. This is why rail transport is now at the heart of
so-called green growth worldwide.
After taking office in March, I chose
the "World's Best Korean Railway" as my vision for transforming Korail
to take advantage of the dramatic change in government policy,
increasing public support for rail, and the emerging social consensus
on the importance of rail transport.
"World's Best" aims to improve all
the services we provide so they can stand comparison with the rest of
the world. For this purpose, we are strengthening exchanges,
cooperation and benchmarking with foreign countries.
As far as "Korean
Railway" is concerned, to achieve the world's best-quality rail
service, even the smallest defect must be corrected if people are
dissatisfied. For example, Korail received a good response from Seoul
businessmen, and revenue increased when it extended the operating
period for KTX. An idea like this easily comes to mind if you put
yourself in the shoes of a customer who has missed the last train home.
The efficiency of an organisation is the first priority. Korail, of its
own accord, announced a plan to reduce its workforce by 5115, the
biggest cut among public corporations, while also suggesting an
initiative to turn its chronic deficit into a surplus by 2012. Creating
a small, effective organisation that impresses customers will improve
the friendly social atmosphere for railway, leading to a rail
renaissance.
Last May, I was appointed chairman of the International
Union of Railways' (UIC) Asian Regional Assembly. Meeting CEOs and
experts of various world nations is always an inspiration and a
positive experience. Exchanges between world railways enable us to
learn from each other. For example, increased investment in rail
transport in Europe had a considerable impact on Korean railway policy.
Korail and the UIC will host the "World High Speed Interaction
Workshop" on November 18 in Korea. I expect that every railway CEO and
expert will visit Korea to reinvigorate the world railway renaissance
and share model precedents.
