The government plans to open the operation of the high-speed KTX railway to the private sector to lower prices and enhance services,” said Kwon, Do-Youp, Minister of Land, Transport and Maritime Affairs (MLTM). 

“It has nothing to do with the restructuring of ownership, such as nationalization or privatization, but the issue involves a shift of the monopolistic railroad market into a competitive structure,” Kwon said.

“The competition of the KTX market is a policy designed to further ensure the interests of all stakeholders, from the railroad industry to industry employees, and the future of the country and its people. Given the nation’s high population density, the KTX segment could have the potential to improve, but that will require a competitive system,” he said. 

“The ministry has set goals of implementing policies whose outcomes can be sensed by the public and take the initiative in overcoming the economic crisis. So this year, we’re carrying out policies according to such keywords as ‘low-income people’s liveli-hood,’ ‘vibrant econ-omy’ and ‘safety and dignity,’ he said.

“The slogan “Comm-unicate and Create” is designed to realize policy convergence through flexible and active communication among ministry staff members so as to create policies that bring about positive outcomes to the public,” Kwon said. Following is an interview between NewsWorld and MLTM Minister Kwon, who has been in office for almost one year, in which he spoke of the Four Rivers Restoration Project, Expo 2012 Yeosu, and other major ministry policies.

Question: You will mark one year in office as the MLTM minister at the end of this month. Will you comment on the job you have done so far?

Answer: One year has already shot like an arrow since I took office, as I’ve always spent my weekends visiting places to take note of the opinions of the general public and discussing a number of pending issues with my staff. I’m afraid that there are still scores of pending tasks yet to be done, but time has whipped by. 

These days, to my great delight, wherever I go I see that policies we have implemented have begun to yield outcomes one by one, and people are satisfied with these. The Four Rivers Restoration Project already proved to have the effect of preventing floods last summer. Riverside areas are emerging as new public culture spaces with an influx of as many as 4 million visitors. A camping event took place a few days ago, forming a spectacular view of 1,000-odd tents that blanketed the area around the Yeoju Retention Pond.

The government’s steps on real estate, including the one taken on Dec. 7, 2011, have so far contributed to stabilizing monthly rental prices, and the May 10 step has eliminated unnecessary restrictions on housing.

Expo 2012 Yeosu kicked off with an opening ceremony on May 11 to embark on a 93-day-long journey and herald a new maritime era. The Namhae Expressway linking Yeongam and Suncheon was unveiled in April °™ eight months earlier than scheduled°™ as part of our efforts to facilitate transportation leading to the Expo, ushering in an era of reaching a combined expressway length of 4,000 km. 

I’m feeling happy with these outcomes, but I’m still burdened with the heavy responsibility of the job of finishing up the ongoing policy tasks, including the Four Rivers Restoration Project, Yeosu Expo, housing, and the introduction of competition in the railway industry so that people can benefit from the outcomes of these policies. 

Q: You proposed the catchphrase “Communicate and Create” at a ministry in-house seminar. What is its goal?

A: The slogan “Communicate and Create” is designed to create policy convergence through flexible and active communication among ministry staff members so as to create policies that bring about positive results to the public. The ministry held an in-house workshop involving all staff members this past February to explore cooperative tasks between housing and transport bureaus, land and maritime affairs bureaus, water resources and maritime environment, and other bureaus. The MLTM is a government ministry specializing in the implementation of diverse policies directly related to people’s lives, so pursuing policy convergence through mutual communication and understanding is essential. 

Accordingly, we are putting forth our fullest efforts to offer the best services by maximizing synergistic effects through internal and external communications and creative policy convergence. 

Q: Would you introduce your ministry’s major plans and policies for 2012?

A: The ministry has set goals of implementing policies whose outcomes can be sensed by people, taking the initiative in overcoming the economic crisis. So this year, we’re carrying out policies according to such keywords as “low-income people’s livelihood,” “vibrant economy,” and “safety and dignity.” 

We’re striving to continuously supply rental housing units so that the livelihood of those in the low-income bracket can be stabilized while curbing monthly rental prices within general price hikes. The MLTM endeavors to build public transportation infrastructure by expanding the railroad network and introducing regular commuter buses. It plans to open the operation of the high-speed railway KTX to the private sector, inducing Korail’s competition with private companies in order to lower prices and enhance service levels. 

We’re striving to execute the maximum possible SOC budgets within the first half of the year to stimulate the economy while trying to overhaul 30 percent of the ministry’s restrictions, particularly the ones concerning entry barriers and site location. The ministry is pushing ahead with efforts to nurture and expand value-added industries such as the overseas construction industry, the development of maritime resources, the marina industry, the maritime industry, and the spatial information industry.

We devote ourselves to completing the remaining last phase of the Four Rivers Restoration Project without a hitch, while informing people of the renewal of the rivers and spreading the spill-over effects to the entire nation. The ministry aims to enhance the nation’s standing as a global maritime power by successfully hosting Expo 2012 Yeosu. I would like to ask the public for its support and participation in the Expo, which showcases diverse pavilions and a variety of events. We will double our efforts to upgrade the nation’s traffic safety culture on par with international standards in order to dramatically reduce traffic fatalities. 

It would be greatly appreciated indeed, if the public would offer more of its candid opinions and boundless support to the ministry, going forward.  

Q: Would you elaborate on the need to introduce competition in the operation of the KTX (Korea’s high speed rail) network and future plans?

A:  First of all, it has nothing to do with the restructuring of ownership such as nationalization or privatization, but the issue involves a shift of the monopolistic railroad market into a competitive structure. The plan is not a privatization issue °™ not disposing of railroad facilities and Korail’s stakes. A projected amendment of the Act on Railroad Businesses would allow new railroad business licenses to build a foundation for competing with Korail. The state constructs and manages infrastructure such as expressways, airports, and ports, and multiple businesses are in charge of operation. 

Competition in the KTX market is a policy designed to further ensure the interests of the stakeholders, from the railroad industry to its employees, the future of the state and people. Korail has turned out to be outstanding in performance as Korea saw transportation density stand at 12.9, compared to Japan at 13.8, Germany at 5.0, France at 4.1, and Spain at 2.2. Given the nation’s high population density, the KTX segment has the potential to improve, but that will require a competitive system. The improvement of operational efficiency will lower railway fares and boost the number of railway passengers, thus realizing a railway-oriented green transportation regime, as has done by the airline, telecommunications, and other industries whose competition and market-opening measures have paid off. 

The Korean airline industry’s introduc-tion of a competition system in 2005 has contributed to stabilizing fares, expanding the right of choice and aviation globa-lization. The domestic telecomm-unications industry, monopolized by KT, allowed new mobile telecom providers in 1990 and the market had new telecom market entrants like KTF and LG in 1996.  

Japan, France, Italy, Germany, and other advanced European economies introduced a competition system to develop their own railroad industry. In particular, EU countries opened international passenger markets in 2010 and they are recomm-ended to open their national railway passenger markets to cross-border competition in 2012. 

Some maintain the introduction of the competition system is being pushed ahead too hastily, but the plan on the restructuring of the domestic railway industry is a policy being carried out coherently in accordance with laws and a master plan created by the late Kim Dae-jung, the late Roh Moo-hyun, and current governments, based on social consensus. The master plan stipulates the introduction of a competition system as the fourth phase of restructuring the railway industry. The first phase called for dividing railway facility construction and operation to launch the Korea Rail Network Authority, which is separated from Korail in 2005. The second phase involved the reform of Korail from a state-run entity to a public enterprise in 2005, and the third phase calls for improving management of Korail during the period between 2005 and 2012. 

A private company in charge of the operation of the Suseo route of the KTX network needs to be selected this year, at least two and half years before the new route is open to commercial service in 2015.

The government has been endeavoring to reach a consensus on the plan, announced last year, by holding public hearings and presentations. Thanks to these active publicity activities, many controversial issues have been solved, and proponents of the plan are on the rise. 

Q:  What benefits do you expect Expo 2012 Yeosu to bring about?

A: Under the theme “The Living Ocean and Coast,” Expo 2012 Yeosu runs for 93 days from May 12 to Aug. 12. The government has done its utmost to provide support for the construction of the Expo site and the expansion of infrastructure for seamless preparation for the hosting the event.  

The Expo is significant not only for the Yeosu area, but also from the national and international perspectives. 

From the international perspective, true to the theme, the Expo will help shed new light on the value of the oceans and coasts and identify ways to resolve challenges facing humankind such as climate change, the depletion of resources and the destruction of ecosystem. The Expo will present a new paradigm for the ocean by calling on the international community to promote the sustainable use of the ocean. 

From the national perspective, the Expo will serve as an opportunity not only to elevate the nation’s global standing with the goal of becoming a world-class maritime power, but also to promote balanced development of the nation by upgrading the domestic marine industry and maritime science and technology to the next level. Regionally, the Expo will likely contribute to helping Yeosu and its neighboring areas emerge as a global maritime tourism destination and promoting the development of the south coast sphere.

The Expo is expected to have economic spill-over effects including production induction effects worth 12.2 trillion won and value-added effects worth 5.7 trillion won along with the creation of 80,000 jobs.

I appeal for people’s wholehearted support and cooperation from companies and related organizations to make the Expo a successful event. 

Q: What steps are in place to overcome the slumping shipping industry?

A: Domestic shipping companies are having a hard time°™ they are grappling with a glut of tonnage, shipping fare plunges, and crude oil price hikes. The Baltic Dry Index (BDI), an assessment of the price of moving the major raw materials by sea, plunged to a record low of 647 points on Feb. 3, 2012, 26 years after hitting its previous lowest level of 659 points in August 1986. Meanwhile, the percentage of oil cost out of navigation cost surged from 30 percent to 50 percent. They are also facing a financial crunch such as demanding additional collateral for financing.

The government induces shipping companies to undergo corporate restructu-ring on their own while supplementing vessel finance to shipping companies through a 600 billion won-export base insurance, $300 million on-landing and the $100 million green ship program. It plans to ramp up its financial support such as reinforced policy loan guarantees to expand liquidity though financial institutions. 

Q: Would you explain the current status of the overseas construction industry and policies to ensure sustainable growth?

A: Despite the lingering uncertainties in the Middle East, the overseas construction industry posted $59.1 billion in orders won during 2011. Korea, which has chalked up more than $40 billion in shipping orders every year since 2008, has seen the value of orders landed surging from $49.1 billion in 2009 to $71.6 billion in 2010 before dropping to $59.1 billion in 2011. The 2010 performance was outstanding with the winning of an $18.6 billion project to export four nuclear power units to the United Arab Emirates. The nation posted $10.5 billion in the first four months of this year.

The Korean overseas construction industry is poised to see the resurgence of construction in the Middle East due to rising oil money investments, welfare, and livelihood stabilization infrastructure projects and projects related to the 2022 FIFA World Cup in Qatar.

The government has policy steps in place to ramp up the domestic overseas constru-ction industry’s competitive edge and promote sustainable growth.