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[Herald Interview] Korail CEO Son Byung-seok maps out new future

Korail eyes overseas markets, continental railway project, while helping fight COVID-19 and nurture solar energy business

Korail CEO Son Byung-seok (Korail)
Korail CEO Son Byung-seok (Korail)
Could South Korea’s railroad network one day be connected all the way to Europe? It’s a vision the country has long hoped for, after its railroad tracks were severed at the 38th parallel border line during the 1950-53 Korean War that now divides the North from the South.

The war has left South Korea “an island,” Son Byung-seok, CEO of Korea Railroad Corp. said in an interview with The Korea Herald.

That’s why a railway link from Northeast Asia to Europe would play a huge role not only for the reunification of the North and the South, but also one that would boost business and cooperation between nations, he said.

While Son said he still holds out hope for a Eurasia railway network, it remains a difficult journey that is complicated by international politics.

In this wide-ranging interview, Son explained Korail’s preparation for a railway connection across Asia and Europe to the company’s overseas strategic businesses that has drawn attention even as the COVID-19 pandemic shut down international travels. 

Q: The interest and expectations for a Eurasia railway has always been high. It may be too early, but what preparations are underway?

A: I think the idea that the Korean railway network should be connected to Asia and Europe is not only the desire of the people working in railways but also everyone in the nation.

In order for our railway to be a continental railway that crosses North Korea, the government has to join two agreements under the Organization for Cooperation of Railways (OSJD) -- the Agreement on International Passenger Transport by Rail and the Agreement on International Goods Transport by Rail.

OSJD is an international organization that plays a role in establishing and coordinating systems and standards for operating a continental railway. Korea is an active member of the continental railway as it also has held a presidential board meeting in Seoul in 2019.

Since the agreements are international treaties, the process of ratification by the National Assembly is underway. In accordance with the government’s policy, Korail is preparing to join the agreements in which railway operators are members.

In order to fulfill the government’s plan for the East Asian railway community, Korail is establishing a cooperative system with related ministries while preparing the foundation for the operation of an inter-Korean railway.

Even while the inter-Korean railway connection project was delayed, we worked on the International Railway Operating Procedures last year. At the end of the year, with the Ministry of Land, Infrastructure and Transport, the Ministry of Unification, and logistic firms, we conducted a joint mock drill at Obong Station to check the international freight train operation processes related to exports of domestic cargo.

In an effort to discover international railway routes and secure competitiveness of continental railway transportation, we are making efforts to promote test operations of international freight trains passing from South Korea, through North Korea to Russia as well as routes from South Korea, through North Korea to China.

In accordance with government policies, Korail is conducting additional examinations to modernize the North Korean railways in preparation for an inter-Korean railway, as well as training up experts to handle international railway operations.

In addition, in order to support the productive operation of the East Asian railway community, we are promoting the establishment of the cooperative council of railway operators, a multilateral consultative body between railway operators, as a model for permanent-basis cooperation between railway operators of countries involved in the continental railway.

Q: How is Korail responding to the ongoing COVID-19 pandemic?

A: Right after the occurrence of the first confirmed case of COVID-19 in Korea last year, Korail has established an emergency disease control headquarters and maintained the highest level of response system to this date.

Preemptive disinfection is the only way to protect the safety and lives of everyone, including employees.

First, we are conducting intensive disinfection at every station and train more than twice a day. We frequently disinfect areas that passengers access daily, such as escalators’ handrails, door handles, and ticket vending machines.

As for Korean Train Express, or KTX, we disinfect the trains four to five times a day, and operate the cabin ventilation system at a higher level than what the government has recommended. In cooperation with local governments, Korail is thoroughly disinfecting facilities and mobilizing all its resources, including operating thermo-graphic cameras in major stations.

To reduce congestion on trains, Korail has stopped sales of standing seats. We have proactively implemented anti-virus measures much stronger than what the government and disease control authorities require at the Level 2.5 social distancing, selling only half of the seats.

We will continue to persevere with the resolution of “First in, Last out,” and focus all our efforts on disease prevention and control until the very end of the COVID-19 pandemic so that passengers can continue to take trains with ease.

Q: How has Korail’s response against curbing COVID-19 infections drawn attention overseas?

A: Just like how Korea’s response against COVID-19 has drawn global attention for its disease prevention and control measures, the case of Korail’s response is also receiving positive overseas feedback.

While railway-advanced countries, such as France and Germany, also reduced or halted the train operations due to a sharp drop in number of passengers, Korail, through K-quarantine, maintained normal train operations without reducing the operations, receiving international attention for securing people’s right to travel and its pro bono activities in the midst of outbreak.

It first began last April when the International Union of Railways was sharing the responses different railway networks around the world were taking against COVID-19. It spoke highly of Korail’s preemptive and effective responses as a model case.

Later, many international organizations, including the World Bank, the Asian Development Bank, and the United Nations Economic and Social Commission for Asia and the Pacific also introduced Korail as a model case to follow.

Especially, last month, the OSJD, the “UN” of continental railways, announced an adoption of recommendations to restore international transportation between its member states under the COVID-19 situation, and included Korail’s responses against COVID-19 as an exemplary case.

In the future, we will let the world know about the excellence of K-quarantine as we actively share the COVID-19 response process and know-hows with any overseas institutions wanting to cooperate with Korail.

Q: Due to the grave circumstances of the COVID-19 pandemic, the transportation industry at home and abroad has taken a hit. How has that affected Korail?

A: Korail is putting up a fight against COVID-19.

Last year, due to the outbreak of COVID-19, the number of passengers on KTX trains decreased by about 40 percent compared to the previous year with sales falling by nearly 1.3 trillion won ($1.2 billion). For this year, more than 300 billion won in operating losses occurred in the first quarter.

With intensive structural reforms and company-wide cost reduction, we are pushing for 200 billion-won worth of administrative improvements for two consecutive years, but sustainable management is still very difficult.

Even if vaccination is to be completed, demand for railway will not recover in a short amount of time.

Just as other countries are offering large-scale financial support to railways and various damage relief to other transportation systems here at home, a reasonable level of support is urgently needed in the domestic railway sector.

We are keeping a close eye on the financial situation, considering the COVID-19 situation. As extreme situations could arise, we are struggling to come up with special measures, such as extreme cost-cutting measures.

Q: This year marks the 17th anniversary of KTX’s launch. Please explain the achievements KTX has made so far.

A: KTX is Korea’s representative express train which began operations in April of 2004.

Starting from the Gyeongbu Line (Seoul-Busan) and Honam Line (Yongsan-Mokpo), to its central line, KTX-Eum Line (Cheongnyangni-to-Andong), which started its operation this year, KTX is a high-speed and extensive railway connection across the nation.

So far, KTX has traveled a distance that is equivalent to 12,500 times around the globe and carried 820 million people. In other words, each person in the entire nation has used it at least 16 times.

KTX, which has grown into one of Korea’s leading brands, is more than just a means of transportation.

As many socioeconomic resources, including in the culture, business, and information sectors, are concentrated in the capital area, KTX aims to serve as a catalyst for balanced regional development across the nation. I’m confident that KTX has helped reshape the concept of time and space in Korea.

In the future, Korail will continue to make efforts for the sustainable development of our society by connecting people with people and cities with supplies.

Q: The government is enthusiastically pushing for the Korean version of the New Deal. What plan does Korail have for the New Deal?

A: Korail is promoting its own ‘Korail-type New Deal,’ which comprises of our own versions of the Digital New Deal, Green New Deal and the Regional Balance New Deal.

Under the Digital New Deal, we are pushing for a ‘Korail-type Data Dam’ project to make vast amounts of information, such as ticket reservation data, into big data that can be made public. We are also preparing a Real-time Smart Maintenance System utilizing the Internet of Things and big data.

Under the Green New Deal, along with the introduction of KTX-Eum, a low-carbon and eco-friendly railway vehicle, we are promoting the expansion of renewable energy, such as solar energy. To reduce fine dust in subway stations, we will introduce a “smart fine-dust management system.”

Korail is pushing to vitalize the local economy by supporting the Regional Balance New Deal for balanced national development, such as development of a subway station area and urban regeneration projects, and promoting railway-linked tourism in cooperation with local governments.

Q: Could you please elaborate on reports on Korail’s plans for a large-scale solar energy business?

A: In short, the company plans to turn railway infrastructures, such as railway stations and vehicle garages across the nation into “solar power plants” producing eco-friendly energy.

To promote the solar energy business, Korail signed a “Solar Railroad Green New Deal Cooperation Project” with the Ministry of Land, Infrastructure, and Transport and the Seoul Metropolitan Government in March.

By next year, the project involves building solar energy facilities with a capacity of 25 megawatts at 13 railroad sites that span 370,000 square meters across the country, including Seoul Station, Ulsan Station, and KTX Goyang garage. It is capable of producing 32 million kilowatt-hours of electricity, which can be used by 10,000 households annually.

In the future, we plan to continuously discover unused railway sites that can be equipped with solar energy facilities, such as railroad tracks and soundproof walls.

By 2030, railway facilities across the country will produce 456 MW of eco-friendly energy, the amount that normal thermal power plants would generate.

Q: Korail is also working hard to enter overseas markets. Please introduce Korail’s overseas business strategy.

A: Based on accumulated know-hows on railway operations, such as high-speed railways, and technical skills, Korail is seeking to secure new growth engines through overseas projects.

We have branches in China, Russia, and France to strengthen exchanges and cooperation with local railway corporations, and operate branches in the Philippines and Tanzania to carry out overseas projects.

We also dispatched employees to UIC and OSJD to further international railway cooperation, including paving the way to connect with continental railways.

To target overseas markets, Korail has formed “Team Korea,” a unit that encompasses not only operation and construction but also design and financing arrangements for railway public-private partnerships worldwide. It is our strategy to play a pivotal role in railway operation and maintenance with Team Korea.

Currently, our main projects are technical advisers on construction and operation of Metro 7 in Manila, Philippines as well as the Central Railway in Tanzania. As for Manila Metro Line 7, we are not just staying as a technical consultant, but also are focusing all our capabilities on winning bids for operational maintenance projects after construction. (The railway is scheduled to be opened in 2022).

Also, to drive domestic carmakers to export overseas and to expand the markets, Korail is participating as a consultant to import countries, such as the Bangladesh locomotives project.

When participating in new projects, such as the project of establishing a master plan for Costa Rica’s railways and establishing a strategy for modernizing the Mongolian railway, Korail is actively working with small and medium-sized Korean companies to develop the entire Korean railway industry and achieve mutual growth.

Moreover, in compliance with the government’s policy, we are preparing for an inter-Korean continental railway, such as laying the foundation for operations of international trains.

Q: Korail is known to put safety as its top priority. What kind of investments are being made in this area?

A: With safety being the top priority of management, we are focusing on spreading safety culture on site and expanding investments in safety.

We have established and laid out a mid- to long-term safety investment roadmap with a budget of 8.7 trillion won over five years until 2023. The main target is the replacement and improvement of old vehicles and facilities, which are often pointed out as the root cause of accidents.

As of last year, we have invested a total of 2.8 trillion won. In particular, although Korail is tightening its belt in overall management due to the pandemic, we are planning to carry out investments worth 1.8 trillion won to improve safety this year.

As the results of active investments in safety are showing little by little, the number of railway accidents last year was only half of that of 2019, with operational problems and industrial accidents falling by 26 percent and 16 percent, respectively.

Based on the administration policy of “If it is not safe, we do not operate. If it is not safe, we do not work,” we will do our best to create a railway that the people can use with confidence. 

By Yoon Chae-won & Lee Kwon-hyoung
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