ON FEBRUARY 10 Korean National Railroad Administrator Kim See-Ho announced at a press conference in Seoul that KTX high speed services from Seoul to Pusan and Mokpo will be launched on April 1. Speaking to VIPs and foreign correspondents in South Korea who took part in a demonstration run from Seoul to Taejon that touched 308 km/h, Kim said that ’opening of the high speed railway will have revolutionary effects on the nation’.

According to Kim Chun-Hwan, Director-General of the General Co-ordination Office for High Speed Rail, passengers will be able to taste KTX travel on March 15-22 when the current shadow service will be available for public use. This will allow a full working trial of ticketing and reservation systems and help to familiarise staff with problems that may arise with commercial service from April 1.

Completion of the first phase of the US$17bn project between Seoul and Taejon highlights the co-operation between South Korea and France in a technology transfer package that brought together local grouping Rotem with Alstom and Eukorail in the Korea TGV Consortium. It also marks a turning point in the development of South Korea’s national network, with the body responsible for building the high speed line, Korea High Speed Rail Construction Authority, replaced by Korea Rail Network Authority from January 1. KRNA’s brief is to take charge of new construction, including high speed and conventional trunk lines.

Major change also affects Korean National Railroad, officially known since January 1 as Korail. This becomes operator of both the high speed line and the conventional network, while ownership of the infrastructure is vested in the Ministry of Construction & Transport. Passage of the reform legislation last year was marked by industrial disputes (RG 8.03 p484).

A bigger change is planned for January 1 2005, when Korail will become an independent corporation rather than a government agency. Next year will also be the first year when Korail pays a fee for use of the infrastructure, although this will be limited to the cost of maintenance.

The changes will not stop there. In 2001 the Ministry drew up its Master Plan for Korea Railway Industry Restructuring which clearly stated that privatisation of train operations was one of the objectives. Lee Jae-Boong, Director General at MOTC, insisted last month that ’the fundamental principles have not changed’, and that privatisation is still envisaged. Because of opposition from the trade unions last year, the government decided to implement the reforms in two stages. First was to make KNR a corporation, he said, and the second was ’privatisation and competition’. ’We are thinking of many ways to implement the change’, said Lee, one of which would see Korail become a limited company whose shares would later be floated. Alternatives would be to establish regional operators or separate freight and passenger companies.

Privately, senior officials in the ministry believe that the mindset of Korail management and staff needs to be changed, something which they anticipate would come about only through the involvement of other companies in the railway business.

With the launch of the 61·7 km Incheon Airport line as a PPP project, albeit bolstered by government guarantees, and the latest urban rail projects in Seoul being promoted on a similar basis, it is clear that the state wants the private sector more deeply involved in South Korea’s rail business.