British journalist warns against rail privatization in South Korea

Posted on : 2013-08-28 11:41 KST Modified on : 2019-10-19 20:29 KST
Christian Wolmar says since Britain privatized its system, prices have gone up, while safety and service have declined

By Noh Hyun-woong, staff reporter

With a head of gray hair on a frame measuring well over 1.85 meters tall, Christian Wolmar arrived at the Hankyoreh’s offices in Seoul’s Mapo district on Aug. 27 and responded to the greeting of “I’ll be your interviewer today” by grinning and holding out a business card with a photo of him on a bicycle. A transportation policy reporter for Britain’s The Independent newspaper in the early 1990s, he first rose to renown with his opposition to his country’s rail privatization push after the Conservative Party took power. He has published nearly a dozen books on railways, including “On the Wrong Line” and “Down the Tube.” Now he’s turning his attention to the privatization currently being pushed by the South Korean government. “They’re making the same mistake Britain did,” he said.

Wolmar’s deja vu started when he came upon information about the partitioning of the public enterprises in charge of the railways. When the Conservatives in Britain pushed their rail privatization plan, they started by splitting public enterprises up by area.

“They stripped down the enterprises to make them easier to privatize,” Wolmar explained. “They divided them into small units for track management, vehicles and heavy equipment, railway management, and so on, and that’s where the problems ended up starting.”

The reason given for the Tories’ privatization plan was to reduce the amount of rail subsidies being paid. With as much as 1.5 billion pounds (US$2.33 billion) a year paid to railway public enterprises, the subsidies were a major financial burden.

But the actual push, Wolmar said, was “a failure.” Public enterprises were sliced up and sold off, and the result was a frustratingly complex rail structure, with additional costs required just to keep the system going. According to Wolmar, government subsidies rocketed from 1.5 billion pounds a year to as much 6 billion. “There were a lot of unnecessary costs from the private companies taking part in bidding and fighting over railway usage rights,” he explained.

Wolmar warned that the costs of privatization will ultimately fall on the public. In Britain, railway ticket charges have outpaced the inflation rate year after year. A person traveling by rail from London to Edinburgh - roughly the distance from Seoul to Busan - now pays US$130-180, or three to four times the cost of a current KTX ticket.

“I went to Busan yesterday, and I was astonished to see the quality of service they offered for such a low price,” Wolmar said.

“If the South Korean government privatizes the system, the price is going to instantly skyrocket.”

According to Wolmar, a profit-seeking private company can’t offer a level of competitiveness similar to a public enterprise. Safety concerns have also been voiced. With so many operators using a limited number of British tracks post-privatization, there have been a number of fatal accidents. In other words, the public has suffered because of the risks taken.

“The state has an obligation to pay for the public goods that are essential for living, things like electricity and water, in the places where people live,” Wolmar said.

“I just hope that the South Korean government doesn’t make the same mistake the British government did.”

 

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