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Groundless rumors about rail fare hikes

Posted December. 25, 2013 03:25,   


Most of the groundless rumors about the privatization of rail service spreading on the Internet are related to rail fare hikes. According to the rumors, the KTX train service departing from Suseo in the southern district of Seoul will be privatized unlike the government’s argument, and the rail fares will surge to a level that cannot be afforded by ordinary people. The logic behind such claims is that “a private operator will only focus on expanding profitability because its highest goal is the pursuit of profits.”

However, experts say such rumors are groundless and absolutely different from the fact. They also say that most of the rumors are similar to those about the mad cow disease that heated up Korea five years ago in that risks are exaggerated and supporting logics are twisted.

One of the rumors on the Internet is that if the KTX service departing from Suseo is handed over to a private company, the train fare from Seoul to Busan will rise to 300,000 won (207 U.S. dollars). The Korail and the Korea Transport Institute have dismissed this claim, saying that it is an “unrealistic claim.” Rail service is in competition with other transportation media such as bus and air services. No transport operator would choose a way to encourage passengers not to use its service by raising the fare in a situation that there are many other substitutes. Moreover, the government plans to lower the fare of KTX trains departing from Suseo by 10 percent than the fare of those departing from Seoul station.

Citing the case of rail privatization in the U.K., some argue that the fare will be more than doubled. However, the Korea Transport Institute explains that this argument is not based on accurate facts. Lee Jae-hun, the head of railway policy at KTI, said, “The British rail fares rose because train operators can freely set fares for prestige-class seats, which are mostly used by high incomers,” adding, “In Korea, train operators have to report train fares for all seats in advance, and the final fares are determined in accordance with the prices management guidelines prepared by the Ministry of Strategy and Finance. Thus, structurally, train fares cannot surge.”

Many say that even the concern over safety, which the privatization of rail service will lead to serious accidents because private operators may not repair old tracks in order to cut costs, lack logical basis.

In Korea, the railroad infrastructure relating to safety, such as rail tracks, is managed by the Korea Rail Network Authority. Even if “the establishment of Korail subsidiary for the KTX service departing from Suseo is a stepping stone for the privatization of the whole train service” like the Korail union’s claim, the safty-related part would still be run by a public opera/tor.

An official from Korail said, “Rumors about the privatization of rail service on the Internet misstate that privatization is the main cause of fare increases and safety concerns by exaggerating some bad practices of rail privatization in foreign nations.”