The railway union feared that the new Korail operator would be the first step towards privatisation and potential job losses for the 20,440 workforce.
Suseo KTX services will be introduced in 2015-16 on a new 61km high-speed branch under construction from Suseo in southeastern Seoul via Dongtan to link with the existing Seoul-Busan high-speed line. Services will run from Suseo to both Busan and Mokpo.
The Ministry of Land, Infrastructure and Transport issued a licence for the new operator on December 27. "The era of competition in the railway business has begun," said transport minister Mr Suh Seoung-hwan, "but I assure you that the railway will remain in public hands."
The government says it wants the strikers to be disciplined and has threatened lawsuits to obtain compensation. Korail has set up a disciplinary committee which will start work on January 9 with a view to restructuring the workforce.