Dir.-Gen Koo Bon-hwan of  Railroad Policy of the Ministry of Land, Transport and Maritime Affairs (MLTM) said the introduction of free competition in the railroad industry in Korea is a “must needed” policy to boost the competitive strength of the industry, breaking down the monopoly in the railroad transportation business. In an exclusive interview with NewsWorld, he also said Korea’s high-speed rail will be the fourth fastest in the world with a maximum speed of 430 km/h by the end of this year and will be ready for commercial runs in 2015. The government is ready to provide all kinds of support for exports of high-speed train technologies to countries where high-speed rails are to be built including the United States, Russia, Brazil, and Thailand.

Following are excerpts of the interview:

Question: What is the necessity for the introduction of free competition in the railroad industry in Korea?

Answer: It is a policy that must be introduced to not only improve the industry by boosting competitiveness within the industry, but to also improve services for passengers. It will also bring down rail fares and increase the number of passengers, resulting in an increase in revenues for the railroad and for the government, which will help to pay the debts incurred to build the railroads on time. The ultimate purpose of tearing down the monopoly of the railroad is to improve the people’s benefits and at the same time the railroad industry as well.

Railroad transportation has been run as a monopoly for the past 113 years, making it unable to respond to public demand and timely changes in the market, with annual losses amounting to 500 billion won that has to be repaid with tax money.

The operational loss amounted to 528.7 billion won in 2010, rising from 477.9 billion won in 2004. Debts accrued from the construction of railroads amounted to 14 trillion won in 2011 and is projected to rise to 30 trillion won in 2020.

In Europe and Japan, they have been able to clean up the red ink in railroad operations after the introduction of free competition in the railroad industry, wiping out the chronic deficits in their railroad transportation businesses.

The European Union introduced free competition for cargo transportation on railroads in 2008, for international passenger transportation on railroads in 2010, and for domestic passenger railroad operations in 2012.

Germany, Britain, Japan, and Sweden are the countries that were able to take care of chronic deficits in their railroad transport businesses by privatizing the railroad transport industry. Austria and Italy are following their examples lately and were able to cut their railroad fares.

The competition introduction plan is based on the laws and roadmaps drawn up during the two railroad strikes in 2002 and 2003 during the people’s government and the participatory government eras at huge cost to society.

The government plan is to continue to own the railroad and let a private firm or firms operate for 15 years on a rental basis, not the privatization of the railroad, and unlike Incheon International Airport, the government plans to sell its stakes. It’s close to what happened in the airline industry, which was turned into a free competitive market by introducing Asiana Airlines, suspending the monopolistic operations of Korean Air.

At the start of this year, the strike by the railroad union created misunderstanding among the public for the government’s plan, but 19 citizen organizations urged the early implementation of the plan, widening its positive support.

The selection of an operator to lease the railroad is being delayed due to the opposition of the railroad union. The government, however, is trying to get around the union’s opposition by selecting the operator following the presidential election this fall. Meanwhile, the government will go ahead with various steps such as the issuance of the license for transportation businesses so that the plan can be finished on schedule.

Q: What about the progress of the building of the Wonju-Gangnung High-Speed Rail line?

A: The project, which requires 3.9 trillion won to build a high-speed rail line linking Wonju, Pyeongchang, and Gangnung°™a distance of 120.3 km°™with a maximum speed of 250 km per hour, is well underway.

The project was included in the 30 leading projects to develop the wider economic sphere in September 2008, and the Pyeongchang Winter Olympic Organizing Committee’s government subcommittee approved the project in May 2010 as a key project for the 2018 Winter Olympics.

In May, the project was kicked off on the section linking Pyeongchang and the Daekwan Mountain Range and the work on the rest of the sections will begin in December this year by steps aimed at completion in 2017.

Also, the MLTM is working on a plan to revamp the Incheon Airport Railroad, the Shin Gyeoingui Line, the Gyeongwon Line, and the Chungang Line. The ministry will see that the KTX Line linking Pyeongchang, Seoul, and Incheon Airport will have no transfer stops.

Q: What is the significance of the development of the ‘Haemu’ high-speed rail line with the maximum speed of 430 km/h and what are some of the special features of its technology?

A: The next high-speed rail line will be able to cover any points in the country within an hour and a half, making a huge contribution to expanding regional exchanges. Korea will have the fourth fastest high-speed rail technology in the world, boosting its competitive edge to lead the further development of railroad transportation in Korea. France leads the world in high-speed rail technology with a maximum speed of 574 km/h, followed by Germany with 460.9 km/h, Japan with 443 km/h, and Korea with 430 km/h.

The Haemu's major characteristics include its speed facilities that are spread around to each passenger coach, not centered on the locomotive, facilitating easier speeding up and slowing down, with greater flexibility in making up a train, cutting operation time and boosting the degree of effective operation. It will have 16 percent more passenger seats than other KTX trains and will require only 233 seconds to speed up to 300 km/h.

Up until now, the new KTX train logged 10,000 km in test runs and reached speeds as fast as 354 km/h, but by the end of this year the maximum speed will have reached 430 km/h in test runs and will be commercially operated from 2015.

Q: What are some of the strategies for overseas advancement of the Korean railroad industry and its results so far?

A: We have been trying to export our high-speed train and technologies to Brazil, the United States, Russia, and Thailand.

We are preparing to participate in the bidding in 2013 for the high-speed railroad construction project in Brazil linking Rio de Janeiro, Sao Paolo, and Campinas a distance of 510 km, and the high-speed rail project in the state of California between L.A. and San Diego. The bidding for the first section of the rail line is scheduled to be held in December this year. The government also has been watching Russia and Thailand for high-speed rail projects, particularly in Russia linking Moscow and St. Petersburg, a distance of 660 km.

The government is ready to provide support to private companies to make advances overseas in many areas including information collection, administrative work, and diplomacy, among others.