Ongoing railroad strike is the longest ever, with no end in sight

Posted on : 2013-12-18 15:23 KST Modified on : 2019-10-19 20:29 KST
Basic rail services being maintained as government continues to deny moves toward privatization
 Transport and Maritime Affairs Committee
Transport and Maritime Affairs Committee

By Im In-taek, staff reporter

On Dec. 18, the strike being held to oppose rail privatization and subsidiaries entered its tenth day, making it the longest strike in the 65-year history of the railroad union.

Differences between labor and management were so wide that workers were not convinced by the government’s insistence that the Korea Railroad Corporation, or KORAIL, would not be privatized.

Korail said that the Suseo KTX line would not be privatized and that it had decided to make it a KTX subsidiary. This plan is completely different from the railroad privatization pursued by the administration of former president Lee Myung-bak, Korail claims.

Indeed, since the Park Geun-hye administration came to power, the plan has been for the operator of the Suseo KTX line to be a subsidiary of Korail, with the rail company holding a 30% share in its subsidiary. In October, after Choi Yeon-hye became Korail president, a new plan appeared that would increase Korail’s share to 41%.

“Korail’s share may have changed, but this remains the original plan that the Ministry of Land, Infrastructure, and Transport devised with the assumption that the company would be privatized,” said Park Heung-su, visiting professor at the Public Policy Institute for People.

“The forces in the previous administration who were pushing for privatization are currently the main bureaucrats in the Ministry of Land, Infrastructure, and Transport,” said a representative for the Korean Railway Workers’ Union on condition of anonymity. “The articles of the Suseo KTX Line can be changed at any time to allow the private sector to purchase shares in the company.”

Observers from various areas are suggesting that a framework for dialogue among civic groups, management, the union and government be created to resolve this “basic mistrust.”

But at a meeting with Blue House secretaries on Dec. 16, President Park Geun-hye criticized the strike as having no justification and being harmful to the people’s livelihood. The government, she said, had announced over and over again that it was not privatizing the railroads, but the strikers did not trust these announcements.

If what Park said was true, there would have been no reason for Choi Yeon-hye to have corrected the original government proposal for Korail to have a 30% stake in the subsidiary.

“Since Korail has a monopoly in the market, there is nothing to compare it to. If there were a subsidiary, it could lead to positive competition between the two companies,” Choi said. This is the argument that a subsidiary could be a method for improving Korail through internal competition. But the labor union rejected this argument, arguing that the nature of railroads means that competition is not effective.

“If there were two Suseo KTX lines, then there could be competition between them. Structurally speaking, railroads require a monopoly on region and tracks, which means that competition doesn’t work. Effective regulations are better than competition,” said Hanshin University economics professor Lim Suk-min. “If Korail splits KTX - its only profitable operation - in half, it will put Korail in the red. This will increase the burden on the public.”

This is the third time that the railroad workers union has gone on strike over possible privatization of the railroads. The first time was when the Korean National Railroad was converted to the Korea Railroad Corporation and facilities and management were separated in 2002 and 2003.

Those strikes did not last more than three of four days. The reason was that, until the implementation of the essential services agreement in 2008 (which meant a minimum numbers of workers had to be on duty at all times), they were full strikes and thus had a much stronger effect.

Paradoxically, one reason that this strike may have dragged out longer was that Korail rashly brought in replacement workers to increase services. Since the railway union’s strike is the first public sector strike that Park’s government has confronted, it is expected to provide insight into how the administration might handle strikes in the future.

 Dec. 17. (by Lee Jeong-woo
Dec. 17. (by Lee Jeong-woo


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