Vice Minister of Land Says "High-Speed Rail Integration to Benefit the Public"... Fare Hikes Unlikely for Now

March 5 Press Briefing

Hong Jiseon, Vice Minister of the Ministry of Land, Infrastructure and Transport, stated on March 5, "We will address various issues, including fares, while operating a tripartite consultative body for the integration of high-speed railways," adding, "We will review the integration in a way that ensures the benefits are returned to users." She also mentioned, "We plan to comprehensively review the issue of fare increases."

At the press briefing held that day, Vice Minister Hong explained, "There are many issues to resolve regarding the integration of high-speed railways, such as labor-management and inter-union conflicts, and if we try to address each one before integrating, it will never happen. That is why we have decided to establish a roadmap first."

KTX, which is operated by Korea Railroad Corporation (KORAIL), and SRT, operated by SR, are set to be integrated by the end of this year. Since last month, the formal integration process began with a pilot cross-operation. The cross-operation is a measure to deploy KTX trains, which have more seats, on the SRT line, which suffers from chronic seat shortages.

Jiseon Hong, Vice Minister of the Ministry of Land, Infrastructure and Transport, is speaking at a meeting with correspondent reporters held at a restaurant near the government complex in Sejong on the 5th. Provided by the Ministry of Land, Infrastructure and Transport

User interest is focused on fares after the integration. SRT has maintained fares that are about 10% lower on average than KTX, and there are concerns that fares could be raised after the competitive structure disappears with the integration. KORAIL has argued that due to the approaching replacement period for its trains' service life, fares need to be increased. The company has also pointed out that with accumulated debt exceeding 21 trillion won and chronic deficits, it is difficult to replace trains under the current fare system.

As the integration process has just begun, nothing has been decided yet. However, based on Vice Minister Hong's remarks, it is likely that fares will be maintained at current levels, as a fare increase would reduce consumer benefits. On this issue, an official from the Ministry of Land, Infrastructure and Transport added, "The integration process requires a corporate merger review by the Fair Trade Commission, and during this process, we will review how the future fare system should be operated."

Railway fares are determined by setting an upper limit through a consultative body (Railway Industry Committee) in accordance with relevant laws and regulations. The Minister of Land, Infrastructure and Transport serves as the chair of this committee, and the decision-making process also involves consultations with fiscal authorities. Just as competition authorities restricted fare increases for a certain period during the merger of Korean Air and Asiana Airlines, it is expected that a similar approach will be taken for high-speed railways.

SRT, which stops at Suseo Station on the 3rd, is stopped after arriving at Seoul Station. Yonhap News

Regarding the supply contract with Dawonsys, which was raised during last year's presidential work report, contract termination is under consideration. Vice Minister Hong said, "For the third contract, termination is the basic policy, and for the first contract, if supply is not made by the end of June, and for the second contract, by the end of the year, we are considering termination." She added, "There may be concerns that if the originally scheduled rolling stock is not delivered, it will be difficult to replace aging vehicles. However, we are preparing to minimize passenger inconvenience by conducting thorough safety inspections and remodeling of the currently operating Mugunghwa trains."

Regarding the 5th National Railway Network Construction Plan, Vice Minister Hong explained that the focus is on projects located in regional areas. She stated that due to budget constraints compared to local government demands, the ministry is also consulting with fiscal authorities about increasing the overall budget. Vice Minister Hong said, "In the previous 4th plan, newly included projects amounted to 43 trillion won, but in the process of establishing this 5th plan, the total scale of projects requested by local governments reaches 600 trillion won. We are requesting the budget authorities to raise the limit as much as possible to accommodate these demands."

She continued, "While the Seoul metropolitan area is found to be feasible through benefit-cost (BC) analysis, regional areas are not, so we conduct Analytic Hierarchy Process (AHP) for policy evaluation. The basic framework is to prioritize regional projects in the overall plan."

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