The Korea Railway Association (KORASS) and Korea Rail Network Authority (KR) have been spearheading the Korean railway industry’s exploration of overseas railway markets.
KR plans to launch a service offering a “bridge of hope” to SMEs applying for their entry into foreign railway markets, the rail way company said on Aug. 24.
KR is out to aggressively extend a helping hand to prominent SMEs struggling with winning orders due to such challenges as insufficient experience, lower credit ratings and limited access to project owners.
KR is playing its part as a public corporation to help SMEs by making the most of the experience and business capabilities the company has accumulated, as the overseas railway market is shifting with a focus on orders based on investment and development projects. Since April 1 when he took office as KORASS chairman KR chairman Kang Yeong-il has been stressing KR’s role as a bridge for SMEs wanting to enter overseas markets. In his inaugural speech, he said, “I will my best to make as much achievements in the exploration of overseas markets as possible.”
KORASS held a consultative meeting on July 7 following Chairman Kang’s inauguration, and began to discuss KORASS’s roles in extending support to tap foreign markets.
The participating business representatives shared the need for the formation of consortia involving public organizations and provision of the government’s financial support, a key for solving project financing, to cope with a trend of overseas railway projects taking a package-style format.
The demand is based on the fact that consortia involving public organizations are needed to address excessive dumping of prices among Korean companies to land overseas orders and overcome Japanese counterparts armed with low-interest financing.
KR virtually won the first phase of a of a light rail transit system project in Jakarta, in conjunction with Indonesian President Joko Widodo’s state visit to Korea on May 16. KR signed an MOU on the project with project-owner Jakarta Propertindo (JAKPRO). The projected 20-km-long light rail system, designed to cut through Jakarta, is divided into a 5.8 km-long first phase and a 14.2 km-long second-phase.
The first phase is to be completed by February 2018 before Jakarta hosts the 2018 Asian Games.
The project, which will cost 150 billion won, will involve project management and the installation of electric, communications, signal and other railway systems.
Indonesia, whose area is nine times more than Korea’s, is Asia’s largest construction market. The huge potential stands at an estimated $104.9 billion (about 123 trillion won). As the Indonesian government is rushing to build transportation infrastructure, Japan snatched the Jakarta high-speed railway (MRT) project and China won a project to build a high-speed railway connecting Jakarta and Bandung.
KR is seeking to participate in the second project, but negotiations need to be held on the second-phase, which will be funded through the private sector, unlike the first phase. KR is a quasi-government authority established in January 2004 to be in charge of the construction and management of national rail infrastructure.
A relative latecomer in Northeast Asia to the HSR market, South Korea first adopted French systems for its first-generation trains. The nation has since invested heavily in research and development for its own rail systems, and now ranks fourth in the world in terms of high-speed train technologies, after France, Germany and Japan.
In 2010, a major milestone was achieved when the first made-in-Korea bullet trains were rolled out. The corporation has fully committed itself to realizing its mission of “Connecting the World with Rail to Create Happiness for the Public,” by successfully completing the construction of Gyeongbu High Speed Line in 2004 and Honam High Speed Line in 2015, expanding the Seoul Metropolitan rail network and modernizing existing conventional lines such as the Honam Line, Jeolla Line or Gyeongchun Line.
KR is to open the Seoul Metropolitan High Speed Line (Suseo-Pyeongtaek) in November 2016 and complete the Wonju-Gangneung project in 2017 to assist the successful hosting of the 2018 Pyeongchang Olympics.
Those projects will contribute to shrinking the entire nation into a so-called “90-minutes Life Zone.”
Further, with high-end technologies and know-how, KR has accumulated as a railway-specialized authority, KR is actively participating in the global railway market, expanding its rail network far beyond Korea, to elsewhere in Asia, the Middle East and the Americas.
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