Rail Hegemony Competition Advantage Strategy
Achieved 20 Billion KRW in Sales Last Year
25 Times Growth Compared to First Year of Overseas Business
7 Projects in 4 Countries: Philippines, Mongolia, Myanmar, Bangladesh
Dedicated Departments Expanded and Reorganized into 2 Units
Korea Railroad Corporation (KORAIL) is accelerating its efforts to pioneer overseas markets. Based on the accumulated K-rail operation technology and know-how, KORAIL's strategy is to secure a leading position in the global 'railroad hegemony' competition.
According to KORAIL on the 21st, last year KORAIL achieved annual sales of 20 billion KRW in overseas business. This is 25 times the sales amount (800 million KRW) when KORAIL first stepped into overseas business in 2007, marking an all-time high. Last year's overseas business sales nearly doubled compared to 2022.
This increase in sales is significant as a barometer of the opportunity for KORAIL to diversify its business by pioneering new markets in the long term. It is in the context that K-rail operation technology has already proven its excellence in overseas markets.
KORAIL has diversified its overseas business by winning orders such as maintenance consulting for electric trains in Malaysia in 2007 and the refurbishment and export of used locomotives in Pakistan. Currently, a total of seven projects are underway in four countries: the Philippines, Mongolia, Myanmar, and Bangladesh.
Last month, Korail officials visited the Manila MRT construction site in the Philippines to review the project implementation plan. Photo by Korea Railroad Corporation
For example, KORAIL entered the Philippines in 2012 with the LRT-1 (light rail transit) railway facility improvement project and is currently managing the ‘Manila Metro Rail Transit Line 7 (MRT-7)’ project, for which San Miguel is the concessionaire. This project focuses on constructing and operating 14 stations over a 23 km section connecting Quezon City and Bulacan in Manila.
Since 2016, KORAIL has played the role of ‘railway system design and construction consulting’ in the MRT-7 project, and in April last year, it succeeded in winning the MRT-7 operation and maintenance consulting project (worth 17 billion KRW) again. The contract period is 45 months, and KORAIL will consult on system verification and testing, trial operation, and reliability management of MRT-7 until its opening next year. KORAIL is making efforts to expand its business scope locally by directly performing operation and maintenance of MRT-7 in the future.
KORAIL's overseas business is also actively progressing in Mongolia. As a result, in 2021, KORAIL (as the lead company) formed a consortium with the National Railroad Corporation and Korea Railroad Research Institute and succeeded in winning the ‘Mongolia Railroad Traffic Control Center (RTCC) Master Plan Establishment and Project Management Service’ project.
This project focuses on building a ‘railway operation management system’ suitable for the local environment centered on the railroad traffic control center to support increased transportation capacity, improved transportation service quality, and enhanced safety.
Last month, Korail officials conducted an on-site inspection of the control room at Ulaanbaatar Station in Mongolia, exploring directions for establishing a local railway operation management system. Photo by Korea Railroad Corporation
In addition, KORAIL is strengthening its overseas business capabilities in Asian countries such as Myanmar and Bangladesh. In Myanmar, KORAIL is responsible for technical consulting including bidding, contracting, design, manufacturing, and trial operation for the purchase of 100 new passenger cars, as well as design support and construction supervision necessary for the refurbishment of the Mandalay?Myitkyina section.
In Bangladesh, KORAIL focuses on transferring vehicle maintenance technology. A representative case is winning the ‘Locomotive Maintenance Technology Transfer Project’ in September last year as a linked project after completing consulting for the purchase of 20 locomotives won in 2018.
Building on this momentum, KORAIL has drawn a blueprint to achieve annual sales of 100 billion KRW by 2026 by completing and applying the full-cycle ‘KORAIL Overseas Business Standard Model’ overseas, ranging from exchange and training, construction and technical consulting, operation and maintenance consulting, to direct operation and maintenance.
To activate overseas business entry and produce visible results, KORAIL expanded and reorganized its dedicated overseas business departments into two in December last year and reorganized the organization to focus institutional capabilities on Asia and Africa. A development department for discovering new overseas projects has also been newly established.
Kim Won-eung, head of KORAIL’s Overseas South-North Railroad Business Group, said, “Based on 20 years of stable KTX operation experience, know-how, and technological capabilities, we will continuously expand our overseas business areas beyond Asia to Africa and Europe. To this end, KORAIL will strive to gain an advantage in the global ‘railroad hegemony’ competition by fostering talent in the railroad field and developing a digital-based safety management platform.”
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