Han Mun-hee, Korail President: "Electricity Costs Alone 600 Billion Won... KTX Fare Increase Needed"

According to the government's price stabilization policy, immediate increases are difficult
Integration is more suitable than separating railway facility maintenance tasks

Han Moon-hee, President of Korea Railroad Corporation (KORAIL), expressed the opinion that a KTX fare increase is necessary. KORAIL, which pays nearly 400 billion won annually in electricity bills, has faced increased operational costs for KTX due to recent electricity price hikes. However, considering the overall rise in public utility fees and inflation that is increasing the financial burden on ordinary households, it is expected that raising fares immediately will not be easy.

Han Moon-hee, President of Korail, is sharing his thoughts on reaching 100 days in office during a press conference held on the 6th. (Photo by Korail)

At a press briefing held on the 7th, Han Moon-hee said, "Since the mainline fare was raised in 2011, it has been frozen until now," adding, "There are concerns about inflation due to national policies, and as a result, railway fare increases have been deprioritized, but I believe a fare increase is necessary."

Railway fares are set by railway operators within the passenger fare ceiling. The Ministry of Land, Infrastructure and Transport, KORAIL’s supervisory agency, sets the passenger fare ceiling system, operating a fare structure proportional to distance with a basic fare for the first 40 km section and a per-kilometer fare thereafter. The railway fare ceiling has been frozen since 2015 for metropolitan railways such as Line 1, and since 2011 for mainline railways such as the Gyeongbu Line.

President Han stated, "Electricity prices have risen significantly recently, and the electricity bill, which was less than 400 billion won annually, is expected to reach up to 600 billion won this year," adding, "Labor costs have also increased, so maintenance costs have risen considerably."

Considering the increase in electricity costs, a factor in rising expenses, the justification for raising KTX fares is clear. However, KORAIL explained that it seems difficult to implement a fare increase immediately due to the government’s inflation stabilization policy. Han said, "There is pressure from inflation, but we are still able to endure it," and added, "We also plan to reduce debt through developments such as the Yongsan station area."

He believes that if a fare increase is pursued, the increase should be sufficient to manage KORAIL’s financial debt. Han said, "Of our 20 trillion won debt, 15 trillion won is financial debt, and we need to be able to cover the interest on this to prevent additional debt from increasing, so I believe a fare increase sufficient to cover that is necessary."

Regarding criticism that Hyundai Rotem’s continuous selection as the high-speed rail operator despite competitive bidding undermines the purpose of competitive bidding, he emphasized, "A balance between monopoly and competition is necessary." Hyundai Rotem is the only high-speed rail manufacturer in Korea and holds a monopoly position in the domestic market.

Han Moon-hee said, "It is difficult to mention a specific company, but Hyundai Rotem has introduced the KTX-1, developed the Sancheon, and accumulated various technologies, but as a single company, there are concerns about rising costs," adding, "Recently, a company tried to enter by partnering with a foreign firm but failed, and if a second company develops high-speed rail and enters, I think it would be problematic if it only brought in the shell without technology."

In the era of the climate crisis, the paradigm of the automobile industry is shifting toward the expansion of electric and hydrogen vehicles. When asked about plans to introduce trains using hydrogen and other renewable energies in line with this trend, he said, "Hydrogen trains are operating on the Osong test line and have been developed," adding, "The Korea Railroad Research Institute has already developed them, and hydrogen trains are expected to be introduced in part in the future, and we will contribute to this."

However, the demand is limited domestically, which is a constraint. Han said, "The concerning part is that although technology development has been done domestically, KORAIL is the only buyer in the market," adding, "Due to climate issues, RE100 membership, and diesel exhibition problems, we need to keep them for war preparedness, but looking at how long we will keep them, I think we must go to hydrogen."

Regarding the issue of separating railway facility maintenance work, which was also a topic at last month’s national audit, he reiterated the existing view that railway operations and railway facility maintenance are closely linked.

He said, "The government is conducting a service, and a reasonable plan will come out," adding, "In my opinion, the railway industry has a characteristic that from construction, the type of electric train and its speed are all set, so it has a higher degree of integration than other infrastructure. Considering this, it would be better to have integrated maintenance and operation."

He stated that vehicle maintenance functions will not be privatized. He said, "There could be some issues if the manufacturer handles maintenance," adding, "Hyundai Rotem does not manufacture all parts and devices to deliver vehicles, and it cannot be said that Hyundai Rotem is necessarily good at maintenance, so we have no plans to transfer our maintenance work to Hyundai Rotem."

Marking 100 days since his appointment as president recently, he said, "It has been about three months, and a lot has happened. There was a railway union strike, a national audit, and although not large, a train derailment accident occurred. Employees also worked hard responding to heatwaves and heavy rain. It feels like we have overcome a big wave."

He also said, "KORAIL envisions leading future converged transportation services and becoming the standard of Korea’s railway industry," adding, "To provide better railway services, we are determined to leap beyond a traditional transportation company to become a comprehensive mobility company."

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