Korea Rail Network Authority Looks to Make a Leap Forward
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Korea Rail Network Authority Looks to Make a Leap Forward
Strives to become healthier through financial restructuring

28(Sat), Sep, 2013

Korea Rail Network Authority (KR) President and CEO Kim Kwang-jae  (photo: KR)

    Korea Rail Network Authority (KR) President and CEO Kim Kwang-jae said he would make all possible efforts to lead the state-run organization toward a leap forward.

“We will focus on providing a safer and more convenient service through an upgraded railway system,” Kim said during an exclusive interview with NewsWorld on the occasion of the 114th anniversary of Railway Day. He emphasized the need to press for organizational and financial restructuring to enable KR to be reformed as a stronger and healthier entity. The following are excerpts of the interview.

Question: You observed your second anniversary since taking office in August 2011 as the head of the Korea Rail Network Authority. Would you tell us about your performance over the past two years?

Answer:  When I first took the post of the KR head in August 2011, it faced the worst crisis since its foundation, due mainly to snowballing liabilities. For instance it needed to pay up to 2.3 billion won in debt interest a day in the wake of the construction of the high-speed railway linking Seoul and Busan. It also faced the desperate need to cast off its image as a corrupt organization due to various bribery scandals and to recover its credit as a public entity by preventing the frequent occurrence of safety incidents. 

I dared to introduce a package of measures designed to slim the apparatus of the KR, curtailing the managerial posts while strengthening on-site jobs to enhance efficiency. Owing to the efforts, the organization has managed to save about 1.56 trillion won of budget since August 2011 and is seeking to save another 2.06 trillion won by the end of 2013.

We have managed to successfully fulfill our promise to the people by completing 15 railway projects including those connecting Seoul and Gangwon Province and Seoul and Jeolla Province. Cost saving efforts will be focused on getting rid of factors that cause waste while maximizing optimization.

The number of safety accidents decreased 57 percent over the past three years from 35 cases in 2010 to 15 in 2012, given efforts to advance the safety management system and checks on 212 sites. With the goal enhancing the safety of migrant workers on the construction sites, we have made video and booklets in five different languages including Vietnamese, Thai, and Indonesian as well as English. Currently, 2,140 foreign workers are employed at 91 construction sites. The organization has invested 273.2 billion won this year, up 43.3 billion won from a year earlier, to improve the living environment of the people through the improvement of railway-related facilities. We are also seeking to facilitate communication among the 281 railway construction sites and some 11,000 workers by utilizing social network services (SNS) like Facebook and Twitter as well as text messages.

Q: You have been putting emphasis on improving the financial soundness of the organization since you took office. Can you give some specifics on this?

A:  As I said before, we have managed to save about 1.56 trillion won through various measures designed to cut down on business costs. They included downsizing the stations, and the elimination of signals and communications buildings with similar functions. Another 129.2 billion won was also saved, including 47.2 billion won in managerial expenses and 82 billion won in financial costs. We have paid off 41.5 billion won of debt in 2011, 92.9 billion won in 2012, and are planning to pay off another 67.7 billion won in 2013 under a plan to pay off debts that we have incurred in our railway construction projects. 

Q: You have said that the organization will also focus on enhancing the technology of the railway system. What are the contents of the plan and the expected effect from it?

A: We are overhauling the design and supervision system by utilizing the knowhow and capabilities of KR employees. From the year 2009 we have been able to save money while strengthening the capabilities of KR workers by introducing new design and supervision systems. We saved 54.7 billion won through the direct supervision of 47 railway construction and electric facilities cases from 2009 through 2012. We are seeking to save a total of 23.9 billion won by the end of this year through direct supervision of 20 construction sites. Instead of outsourcing, we prefer our own employees so that they can accumulate knowhow that can be applied to construction sites and utilize them in bids to get orders from overseas.

Q: Have been there any changes in the overseas business departments as a result of your focusing on strengthening the technology of the railway system?

A:  We have been seeking to diversify our advancement into overseas markets in the areas of design, technology consulting, and managerial consulting. Based on the experiences and knowhow accumulated through the construction of the Gyeongbu high-speed railway, we have been exerting efforts to make inroads into foreign markets during the 2005-2010 period. Though such efforts bore fruits to some extent, they have mainly been confined to the Chinese market.

But we have been seeking to diversify the market since 2011 to areas such as Nepal, Paraguay, and Cambodia, and to Vietnam, India, and Malaysia in 2012. We have been awarded a total of 17 orders from these areas. We have managed to take part in the design and engineering project for a high-speed rail project in California in the United States, which proves the enhanced technology power of the KR. 

Q: Can you talk about some of the details of major railway construction projects like the Honam high-speed railroad and the ripple effects that will result?

A:   We plan to issue orders worth 8.82 trillion won for construction of railways like the one linking Wonju and Gangneung in Gangwon Province. We also plan to complete the project for rearranging central areas of Deajeon and Daegu by the year 2014.

This year, we plan to complete four projects including the opening of the line between Moonsu and Misa of the central line in March. We will invest a total of 7.11 trillion won, up 676.8 billion won from a year earlier. OF the budget, 60.2 percent, or 4.28 trillion won, will be spent during the first half of the year, in a bid to create some 60,000 new jobs. Such advanced execution of the railway budget will generate an 8 trillion won production effect while creating 58,000 jobs.

Q: Can you explain the efforts of the KR toward the “partnered growth” between large companies and small and medium-sized companies?

A:  We have been seeking to form a “horizontal construction environment” through various communications channels with the small and medium companies. Toward that end, we have been holding debates represented by the related sectors on a regular basis (at least more than once a month).

We set up www.ebid.or.kr, as the site for online procurement and bidding channels for the first time in the nation as part of efforts to activate procurement of New and Environmentally-friendly Products (NEP) and quality products.

In order to protect subcontractors, we have been obliging business partners to issue certificates to guarantee payment. We have been continuously checking and correcting possible unfair business practices at construction sites while implementing a reward system against possible unfair and illegal subcontracting businesses.

Q: Finally, we would like to ask you to talk about your life vision and management philosophy.

A:   I cherish Confucius teaching stating that what matters is not to correct after committing mistakes. My motto is Keynes’ “warm heart with a cool brain,” which has been implemented in bids to provide quality railways at reasonable prices and proper times. I ask my employees to “think deep, work speedy” as part of efforts to work under transparent and fair principles.

KR CEO Kim graduated from Daegu High School in 1975 and Yeungnam University in 1979. He majored in economics at Lester University in the UK in 1987 and Canada’s McGill University’s aeronautics law graduate school in 1995.

After passing the state administrative examination in 1981, he entered officialdom at the railway authority in 1982. Since then, he has served in major posts at traffic-related departments including a stint in the ICAO during the period of 1993~1995. He also served as the general consul in Montreal, Canada, from 2004 to 2008 and chief in charge of air policy at the Ministry of Land and Maritime Affairs from 2010 to 2011. He took the post of CEO of KR in August 2011.

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