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KORAIL emerges as test case for public sector overhaul Updated: 2013-12-26 21:55:53 KST

  KORAIL emerges as test case for public sector overhaul
The overhaul of KORAIL, the operator of Korea's railway monopoly, has emerged as a test case for the government's determination to rein in the lax management of debt-ridden state companies.
That's because the state-run railroad operator saw its debt triple in the past eight years,.. to over sixteen-billion U.S. dollars.
Despite the piling debt, however, Korail has continued to pay out bonus payments and raised wages of its employees by more than five-percent every year since 2005.
The wage increases came during a period when the company was posting an average annual operating loss of 470-million U.S. dollars.
Critics say Korail symbolizes the inefficient and lax management that pushed the finances of state companies and other public organizations to dangerous levels.
The government says it is determined to tackle the issue as it fears that the snowballing debts in public institutions have emerged as a serious risk to Korea's economy.
Korail, government officials say, urgently needs to improve its efficiency, and that a competition with a subsidiarly will be the first step.
But unionized workers, which is on a longest-ever strike in the nation's railway history, is vehemently opposing the idea of setting up a subsidiary, calling it a scheme to eventually privatize the company.
There's no sign when the railway strike will end but how the conflict will be resolved will certainly set the course for future restructuring of the nation's public sector.
Yoo Li-an, Arirang News.
KOGL : Korea Open Government License
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