The 10th

Meed Rail and Metro Summit

Oct. 20-22, 2014

1

Korean Railways Development Case

Agenda

2

Implication for MENA Region : Egypt Case

Key Success Factors of Korean Railways

Question & Discussion

Korean Railways Development Case

3

Korea has achieved outstanding economic growth. Railway infrastructure

has played a significant role.

Total 3,560km railways connect industrial parks, cities and ports, becoming blood vessels of the country.

Korea railways carry over 40% of non-urban passengers on five main routes.

In 2014, Korea has a high-tech railway system, localizing most of signaling technology.

Korea has developed its railway infrastructure within past 50 years.

Identified key success factors are;

Government leadership and staged planning

Leveraging external partnerships

Focus on capacity building and localization of technology

Implication for MENA countries for successful railway development

Strengthen regional cooperation to plan railway development

Leverage funding from multiple partners, World Bank can help

Research and cooperate with Korea, other railway leader countries, World bank can

connect

Executive Summary

4

Korean Railways

Development Case

5

Item Detail

Area 100,210 km²

Capital Seoul (10.2 million)

Population 50.22 million (2012)

Population Increase rate 0.18%(2013)

Unemployment Rate(%) 3.4% (2013)

GDP $1,305 billion (2013)

GDP per capita $25,976 (2013)

Per Capital GNI $25,920 (2013)

GDP Growth Rate 2.0% (2012)

National Independence 1945.8.15

Trade Volume (2012) Export $548 billion

Import $520 billion

Major Industry products Semiconductors,

automobiles, ships,

electronics, mobile telecoms,

equipment, steel, and

chemicals

S. Korea Country Overview

6

Past Present

Korean Railways

Major railway lines (as of Sep 2014)

Railway Development of Korea

Korean railway networks

connect industrial parks, cities

and ports, becoming blood

vessels of the country.

Korean railway network is

3,650km long, 60% electrified and

55% double-track.

Maximum speed of Korean

railway system of 300km/h

(targeting 430km/h), connecting

Seoul-Busan(450km) in 3 hours.

Korean rail started operation in

1899. Since 1963, Korail became

a single government-owned train

operator(55,000 staff) except for

urban metro lines.

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8

Railway Development of Korea

Korea has achieved outstanding economic growth. Railway infrastructure has

played a significant role.

Rails’ share in non-urban passenger transport is 40% on main routes.

Korean railway carries 39.8M tons of freights and 27,107M passengers per year.

Between 1995~2011, passenger traffic increased 1.7 times and freight 3.8 times.

Freights volume of railways

(000s)

Passengers volume of railways

9

Railway Development of Korea

Korean government showed strong leadership and laid legal foundations for

railway sector framework and role of public corporation.

Started as Railroad Administration Bureau of the Ministry of Transportation.

In 1963, the bureau became an agency named Korean National Railroad (KNR).

In 2004, KNR was split into Korea Railroad Corporation, railroad operation company

and Korean Rail Network Authority, whose main function is maintaining tracks.

Revenue Expense Net Profit

(Annual Business Result)

($17.5 billion) ($2.5 billion)

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Key Success Factors of

Korean Railways

11

Government

leadership

Leveraging

partnerships

Focus on

capacity

building

Success factors of Korean Railways can be summarized as well-aligned

government leadership, leveraging external partnerships, and focus on internal

capacity building.

Details

Based on clear legal frameworks

Planning aligned with Nat’l Development Strategy

Staging and fast execution of projects

Leveraging external funding such as WB

Early adoption of advanced railways technology

Focused on capacity building of public agency

Invested in localization of technology

Key Success Factor of Korean Railways

12

Korean government led the railway development under clear legal framework which

is aligned with the priorities of National Development Strategy. Also, realistic

staging of projects enabled fast execution.

Clear Legal

Frameworks

Details

Staging and Fast

Execution of Projects

Aligned with National

Development Strategy

Railroad Act(1961)

Korean Railroad Corporation Act (1989)

Korea Rail Network Authority Act (2003)

Railway Industrial Development Framework Act (2004)

Railroad Enterprise Act (2009)

5th 5yr Economic Development Plan (1983~ )

Comprehensive Development Plan of Nat’l Land (1987~ )

1st National Railway Network Plan (2006~2015)

2nd National Railway Network Plan (2011~2020)

high-speed passenger train(1994)

- 1st stage (Seoul-Busan), 2nd stage (Seoul-Mokpo)

Seoul Metro Subway(1994)

- 1st stage (Seoul-Busan), 2nd stage (Seoul-Mokpo)

ATP(ETCS-1) on board system project

- 1st phase(2003~2009) 2nd phase (2010~2012)

Government leadership

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Government Leadership

MoT started with less than 200 staff in 1948, and currently manages under 1,000

people.

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Leveraging

external funding

Details

Early Adoption of

advanced system

Jungang line(147.8km) extension financed by WB(1968)

Seoul-Busan(445km) ATS implementation financed by WB(1969)

Seoul-Suwon(41.5km) extension financed by WB(1977)

Taebaek line(126.9km) extension financed by WB (1983)

CTC from Westinghouse (1968)

CTC Computerization (1981)

CTC & ESI from Siemens (1977)

CTC & ESI from Kyunsam (1983)

TGV from Alstom (1994)

TVM-430 ATC on board system for Kyungbu Express line(2004)

Korean government maximized the leverage of both external and internal partners.

External funding like WB financing was used, and advanced railway technology and

systems were adopted early on.

Leveraging Partnerships

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Korean government invested in public agency for gradual knowledge transfer and

capacity building. It also facilitated localization of technology.

Investment for independent Korean technology (1988)

First Korean localized EIS developed & tested (1993)

EIS standard regulated (1993)

First Korean EIS product was installed in Jungang line (1994)

ATC wayside, on-board device, EIS, AF track circuit localized

(1994~1996)

KTX-STX II developed

Localization of

technology

Capacity Building

of public agency

Railroad administration bureau in the MoT (1948)

Established KNR(Korean National Railroad) (1963)

Established Korail(2004) and maintained infrastructure

authority as KR(Korea Rail Network Authority)

Details

Focus on Capacity Building

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Pre-Modern Era (1890-1940)

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Railway

development

event

1897 1899

1910~

Under Japanese

Ruling

Major

historical

event

1st phase

Construction of

the Gyeongin

Line

Opening of

Noryangjin-

Incheon Section

Government

leadership Leverage of partnerships

Capacity Building

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Jungang

Line

1943 1945 1948 1950~1953

Independe

nce

Korean

War

Railway

development

event

Major

historical

event

Entering Modern Era (1945-1955)

Government

leadership Leverage of partnerships

Capacity Building

Establish

ed

Ministry

of

Transport

Korean

government

established

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Metro

subway

(Seoul-

Suwon)

1961 1963 1967 1968 1969 1974

1977 1979

1st

localized

diesel

train

Railway

development

event

Major

historical

event

Seoul-Busan(445km)

ATS implementation

financed by WB

Jungang

line(147.8km)

extension financed by

WB Seoul-

Suwon(41.5km)

extension financed by

WB CTC & ESI from

Siemens

CTC from

Westinghouse

Established Korean

National

Railroad(1963)

Development by Others (1960-1980)

Government

leadership Leverage of partnerships

Capacity Building

Railroad Act

(1961)

Railroad Transport

Business Act

Railroad Safety

Act(1979)

1981 1982 1983 1984

1988 1989 Railway

development

event

Major

historical

event

5th 5yr Economic Development Plan

(1982~86) Comprehensive Development Plan of National Land

(1982~1991)

Initiated EIS

localization

project

Taebaek line(126.9km)

extension financed by WB

CTC & ESI from

Kyungsam

CTC

Computerization

Owned Development (1980-1990)

Government

leadership Leverage of partnerships

Capacity Building

Korail Act

Established(1

989)

Public Railroad

Construction

Promotion Act(1984)

1993 1994~1996

High-speed

Railroad

Construction

Promotion

Act(1996) Project

Railway

development

event

Major

historical

event

Seoul Metropolitan Subway

Project

First Korean

localized

EIS developed &

tested First Korean EIS installed in

Jungang line

ATC wayside, on-board device,

EIS, AF track circuit localized

TGV from

Alstom

High-speed Train (1990-2000)

Government

leadership Leverage of partnerships

Capacity Building

2nd stage KTX

(Kyungchoon-

Jeolla)

1st stage

KTX

(Seoul-

Busan)

2003 2004 2005 2008

2010~2012

Locally built

high-speed

train

KTX-II

Railway

develop

-ment

event

Major

historical

event

TVM-430 ATC on board

system

for Kyungbu Express line

Korail/KR Role

divided Railways Industry Development Framework

Act (2003) Railroad Enterprise

Act(2004)

2nd National Railway

Network Plan

U$88billion (2011~2020)

Technology Frontier (2000-)

Government

leadership Leverage of partnerships

Capacity Building

KR Network Authority Act

(2003) Railroad Construction Act

(2004)

1st National Railway

Network Plan

(2006~2015)

KTX network

plan(2010)

Railroad Safety

Act(2004)

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Implication for MENA region

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Item Detail

Area 1,001 million km²

(95% desert)

Capital Cairo (18 million)

Population 94 million (2013)

Population Increase rate 1.6%(2013)

Unemployment Rate(%) 13.4% (2013)

GDP $262 billion (2013)

GDP per capita $3,314 (2013)

Per Capita GNI $3,160 (2013)

GDP Growth Rate 1.8% (2013)

National Independence 1922. 2. 22

Trade Volume Export $24.81 billion

Import $59.22 billion

Major Export Products

Crude Oil and Petroleum

products, Cotton, Textiles,

Metal Products, Chemicals,

Agricultural goods

Egypt Country Overview

24

Railway Development of Egypt

Egypt railway was the 1st railway network

constructed in Africa with the longest line. It

started operation in 1856, and now

maintains 5,085 km route.

Egypt National Railways manage total

route of 5,085km, but only 63km is

electrified and 1,466km is double-track.

Egyptian National Railways carry 12.5M

tons of freights and 842M passengers per

year.

Maximum speed of train is 60-80km/h for

passenger train and 50-70km/h for freight

train

Operating income was 600M LE and

expenses reached 800M LE.

63,520 staff employed in ENR(Egyptian

National Railways)

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Egyptian Railways use only 20% of electric

signaling system (adopted from Alstom, Siemens,

Eliop, Thales), depending highly on mechanical

signaling system(80%).

Egypt Railway has experienced serious train

accidents from derailment, train crash or signaling

mistake in the last decade.

Egypt Railways

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Nagh Hamady ~ Luxor

section (118km)

EIS (Electronic

Interlocking system)

installations in 24

stations

Loan amount: U$114 M

Period : 2015~2017(3yrs)

Korean Government-financed Project

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Cairo ~ Alexandria Line

(217.6km)

Beni-Suef ~ Asyut Line

(210.6km)

10 EIS installations

Loan Amount : U$600M

Period

- Approved in 2009 & 2010

- Restructured in 2014

- Under implementation

World Bank-financed Project

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Item Total

1. Direct project cost 98.4

1.1. Signaling Modernization

Including Electronic interlocking

system, ATC(ETCS-1) on board

system, CTC, Communication Facility

(Network)

89.9

1.2 Consulting services &

Education/training, maintenance

support

8.5

2. Taxes and the public utilities 1.6

3. Reserve Fund (Contingencies) 16.5

4. Indirect cost (Loan handling fee) 0.1

Total project cost 116.6

Item Total

1. Direct project cost 631.0

1-1. Signaling Modernization 511.5

1-1A. Signaling Modernization

Cairo(Arab El Raml) to Alexandria

174.5

1-1B. Signaling Modernization

Beni Suef to Asyut

337.0

1.2. Renewal of 200 km track

Cairo-Aswan line renewal (60km)

106.0

1.3. Modernization of Management &

Operating Practices

13.5

2. Contingencies & front end fees 14.0

Total cost project 645.0

(Estimated, USD million)

Project cost estimates

Korean Gov’t financed (to be) WB-financed

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Geographical

factor

Socio

demographic

factor

Industry

Factor

Details

Large land and deserts require reliable land transport system

Railway networks needed for other development projects and

logistics (e.g. electricity, construction, labor, etc.)

Regional Cooperation(e.g. GCC Railway Projects) opportunities

Railway operations itself can be generating revenue.

Railway can create synergy with other industry

(e.g. tourism, agriculture or mining).

Railway can facilitate local development by providing access to

people, information and opportunities

Increasing population and high unemployment rate

Urbanization like housing shortage & road congestion

People want connected, safe and freedom to move.

Economic Potentials of Railways in the Region

30

Strengthen regional

cooperation in

planning

Leverage global

partnerships for the

best knowledge and

experience

Focus on

capacity building

Details

Review governance and establish national legal framework

Maximize regional cooperation

Own the planning process and align with industry strategy

Focus on responsible execution through staging

Collaborate with WB, regional and bilateral development

banks as partners.

Adopt the best available knowledge and technology in the

world, and learn to own and internalize it.

Invest in people and key agencies with a focus on

knowledge and know-how transfer

Expand partnerships and communicate through projects

Implication for the Region

31

GCC Railway Project

MDBs like World

Bank or Regional

Banks

Emerging partners in

other regions like

Korea and China

Details

Over 10,000km of railways worth of $200 billion investment

Best way to institutionalize “learning by doing”

Excellent source of knowledge and expertise in proximity

WB remains as one of the largest financier and committed

to provide a convening role for the region.

GCC countries and sovereign funds are active financiers

for public infrastructure projects in the region.

Bilateral financiers exist as additional sources.

Korail established International cooperation/business

department in 2013.

Korail’s cooperation track-record with Malaysia, Bangladesh,

Myanmar, Algeria, Libya, Egypt, Saudi Arabia, Oman, etc.

Expressing interests facilitate new network and capacity

building

Reaching out to Regional and Int’l Partners

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Thank you

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