[2022 National Audit] "If GTX Opens, Korail Faces Annual Loss of 100 Billion Won"

Research Report Submitted by Korail
Assemblyman Heo Jong-sik: "Measures Needed to Minimize GTX Opening Damage"

[Image source=Yonhap News]

[Asia Economy Reporter Cha Wanyong] An analysis has emerged that the annual revenue loss of Korea Railroad Corporation (KORAIL) due to the future opening of the Great Train Express (GTX) will exceed 100 billion KRW.

According to the research report titled "Study on the Impact of Future Environmental Changes such as GTX on Metropolitan Railroads," received by Rep. Heo Jongsik of the Democratic Party from KORAIL on the 11th, it is projected that KORAIL's business revenue will decrease by about 2.26% if GTX opens in 2030.

The research data estimated that considering KORAIL's business revenue was 4.9151 trillion KRW in 2019 before the COVID-19 pandemic, the annual revenue loss would reach 111.1 billion KRW. Even based on this year's budgeted business revenue (4.1849 trillion KRW), the loss amounts to 94.6 billion KRW.

This prediction assumes that 17.72 million passengers who used KORAIL's metropolitan railroads will shift their demand to GTX.

The revenue decrease due to the GTX opening is also expected to negatively affect the corporation's financial soundness. KORAIL's debt ratio has consistently exceeded 200% over the past 10 years and rose to 287% last year.

Additionally, with an operating loss of 888.1 billion KRW and a net loss of 1.1552 trillion KRW recorded last year, financial soundness deteriorated, leading to KORAIL being designated as a financially risky institution at the 8th Public Institution Management Committee held by the Ministry of Strategy and Finance on June 30.

Meanwhile, KORAIL is pushing forward with various station area district developments, including the development of the Yongsan maintenance depot site, which is expected to exceed a total project cost of 12 trillion KRW, raising concerns that this could become a management risk. The recent surge in raw material prices and interest rate hikes are also sources of instability.

Rep. Heo Jongsik stated, "Given KORAIL's currently fragile financial soundness, with the annual revenue loss due to the GTX opening expected to exceed 100 billion KRW, urgent measures are needed," and pointed out, "The corporation must prepare countermeasures to minimize the damage caused by the GTX opening through enhancing the transfer system with GTX and improving services."

This content was produced with the assistance of AI translation services.