Korea Railroad Corp. (Korail) is hitting the accelerator to explore overseas markets. Korail, a monopoly railway operator in Korea, has begun to turn to the tapping of the overseas logistics, and maintenance/repair sectors.
The eye-catcher overseas project Korail has won is about the signing of a 12 billion won deal to repair and export second-hand diesel locomotives with the National Logistics Cell (NLC) of Pakistan in 2012. The project is Korail’s first exporting case replacing second-hand locomotives from a normal-gauge (1,435mm) to a larger gauge (1676) corresponding to Pakistan’s.
The project, which took six months to remodel trains, helped Korail earn 11.8 billion won in revenues. The corporation reaped 1.5 billion won in additional revenues by offering consulting services for train maintenance. Korail not only exported trains, but also transferred diesel maintenance technology to Pakistan.
In March 2013, Korail landed an order from the Philippine transportation ministry to improve the Metro Manila subway No. 1, setting a foothold in the Southeast Asian market, and successfully completed it.
Korail is now strengthening cooperative ties with San Miguel Corp. to land orders on the operation and maintenance/repair of the second and seven lines of Metro Manila. Korail is now considering acquiring a 20 percent stake in a consortium, to be formed with San Miguel for the 13.8 km-long second subway line and 11 stations during the period between 2016 and 2031.
Korail is holding negotiations on consulting services for operation and management of the seven line of Metro Manila, now under construction, with San Miguel. The 7th subway line is to be built by the Philippine corporation by 2041.
Korail is seeking to participate in the operation and management of the metro system in the Saudi Arabian capital of Riyadh. The Saudi Arabian government is to designate the operator of a 176-km subway system now under construction. In April, Korail has passed a pre-qualification process.
Global attention is on the victor of the Kuala Lumpur-Singapore high-speed project, the biggest one in 2016, to be determined late this year. The 350-km project will cost $13 billion (about 15.25 trillion won).
A Korean consortium has already been formed by the public and private sectors. Korail, a member of the consortium, is playing a part to win the mega project.
Korail successfully hosted the CEOs’ conference of the Organization for Cooperation of Railways (OSJD) and logistics subdivision conference in Seoul last year.
The corporation is speeding up railway network projects to connect the Eurasia Continent. OSJD is an international organization to develop international freight and passenger traffic in Eurasian region, and KORAIL joined OSJD as an affiliated member in March 2014. It was approved to host major OSJD conferences in South Korea in 2015 and 2019 respectively.
The global railway industry, whose value now stands at 200 trillion won, is projected to jump to a 1,000 trillion won huge market in a near future, and Korea, the world’s fifth country to introduce and operate high-speed trains, is striving to tap such emerging markets as South America and the Middle East by making the most of the operation knowhow and technological prowess the nation has accumulated while operating high-speed trains, a Korail official said.
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