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| Corporate logo of Korea Railroad Corp. (Korail) / Korea Times file |
By Lee Kyung-min
The merger of state-run Korea Railroad Corp. (Korail) and its subsidiary SR Corp., operator of the Super Rapid Train (SRT) rail service, has been postponed for further discussion to remove pandemic-related factors, the transport ministry said Tuesday.
Korail employees represented largely by the Korean Confederation of Trade Unions (KCTU, one of the country's umbrella unions, are calling for a swift merger, saying the status quo encouraging competition between the two is a stepping stone toward the much-feared privatization of the state-run entities.
They say operating losses incurred by Korail have been exacerbated since SR went into full-fledged operation in 2016. SRT fares are 10 percent lower than those of KORAIL's trains.
Korail is also taking issue with SR having taken over the lucrative lines connecting Seoul and Busan. The SRT stops at large cities in South and North Jeolla provinces. This is why KORAIL says its financials are being eroded by the money-losing Saemaeul and Mugunghwa trains, which are older and slower.
They say overall railway operations have become complicated, leading to unnecessary labor and facility investment costs of over 40.6 billion won ($314 million) every year.
However, SR demands the status quo remain for more affordable customer services.
The Ministry of Land, Infrastructure and Transport said months of heated discussions by a ministry-organized consultative committee ended in disagreement. The outcome of the discussion was marked by two strong competing opinions that were unable to find common ground, the ministry said.
"Proponents and opponents of the merger will convene at a later date to discuss the issue after the removal of factors related to the COVID-19 pandemic," a ministry official said. "Accurate analysis of the two entities' operating losses were limited to three years from 2017 to 2019, shortly before the onset of the pandemic. We need more data to reach a conclusion in the following few years."
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