KOTI - Korea Transport institute

KNR(Korea National Railroad) had been played as a key driver on investment of railway facilities and operating whole system for long period. However, the deficit budget regarding railway operation of KNR had increased every year in 1980s. In addition, the ridership also had been decreased since 1990s. These situations had come into a huge and rapid fiscal burden of the KNR. In this context, reforming operation system of Korea railway industry was implemented with separating railway construction and management in vertical way by Korean government from 2003 to 2004. As a result of this action plan, KR (Korea Railway Network Authority) which invests (or constructs) railway facility is established in 2004. Meanwhile, and KORAIL (Korea Railroad Corporation), which operates the railway system, was established as a state-owned company in 2005. These efforts of Korean government were the results for reducing chronical deficits and inefficiency management of railway industry in Korea. Nevertheless, the Road map for reforming industrial structure of Korean railway has not completed and for carrying out it, competition condition on railway operating through the open access of rail track is coming into the spotlight. KORAIL has currently carried the chronic operating deficit every year and also the huge fiscal budget has increased until 2004 as mentioned above. Related to this, the monopolistic and closed operation system on railway industry of KORAIL has pointed out as a principal cause of failure on reformation in the past. From these backgrounds, it is necessary for reforming current problems of monopoly system of KORAIL called state-owned company, and also, we must carry forward an action plan on structural reform of Korea railway industry once again