The Economics of Railways Restructuring in South Korea

Russell Pittman and Sunghee Choi

MPRA Paper from University Library of Munich, Germany

Abstract: South Korea, like many countries, is engaged in a policy debate concerning possible railways reforms. However, unlike most countries, here the focus of discussion has been the government’s proposal to open high-speed passenger train lines to a second train company that would supply on-track competition to KTX trains. While such a policy may indeed lead to lower fares and greater efficiency, worldwide experience casts doubt on the government’s hope that it would lead to such dramatic increases in ridership that the level of subsidies to the overall rail system could be reduced. We argue that a more promising reform strategy may be to introduce competition into freight rail. Based on the Latin American experience, creating independent, vertically integrated, competing freight railway companies could be expected not only to lower shipper rates and increase efficiency but also to raise considerable revenues from the private sector in franchising fees and new investments.

Keywords: railways; restructuring; competition; South Korea (search for similar items in EconPapers)
JEL-codes: L9 L92 O1 O18 R4 R48 (search for similar items in EconPapers)
Date: 2013-03
New Economics Papers: this item is included in nep-com, nep-reg and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:44992

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