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Private firm to handle railroad operations

Posted February. 26, 2001 19:12,   


The operations of the Korea National Railroad (KNR) and Korea Train Express (KTX) will be suspended until 2003. Instead, the Korea Railroad Facility Corporation and Korea Railroad Co. will be established to take responsibility for railroad construction and operations. Beginning next year at the earliest, the operation of some railroad lines, including the Kyungchun Line, and several metropolitan subway lines, will be managed by the private firm. The Ministry of Construction and Transportation announced Tuesday that it had included these initiatives in the ``Basic Law on Railroad Industry Structural Reform.``

After gathering opinions from the Railroad Structure Reform Screening Committee in March, the ministry will finalize a draft and launch the Railroad Industry Structural Reform Planning Body to enact relevant laws and regulations. According to the basic law, the ministry will set up Korea Railroad Facility Corp. to take responsibility for the construction and management of general railroads until 2002. In the initial stage of the plan, the KNR will take charge of all railroad operations but will later turn over this right to Korea Railroad Co., to be established in 2003.

After conducting appraisals of the value of properties held by KNR and KTX, the buildings, tracks and land held by the two companies will be turned over to Korea Railroad Facility Corp., and rolling stocks and machinery and equipment to Korea Railroad Co., for management on commission. Korea Railroad Facility Corp. will take over the KNR`s 1.5 trillion won debt and 4.4 trillion won out of the 6.8 trillion won deficit accumulated by the KTX. Korea Railroad Co. will take over 2.4 trillion won in rolling stock purchasing expenses from KTX.