Korail Distribution 6th Bid Results: Seongsimdang Finally Selected
Monthly Commission Adjusted from 440 Million KRW to 133 Million KRW
Visitors are lining up in front of the Daejeon Seongsimdang main store to purchase bread. Photo by Heo Younghan
Famous bakery 'Sungsimdang,' which had been in dispute with Korail over the skyrocketing rent at Daejeon Station store, will continue its operations at Daejeon Station. Korail Distribution, which operates the Daejeon Station store, set the monthly rent at 133 million KRW, bringing an end to the long-standing rent conflict.
On the 27th, Korail Distribution announced that it had selected the existing Sungsimdang operator 'Rosso' as the winner of the open competitive bidding for the comprehensive bakery on the 2nd floor of Daejeon Station. Korail Distribution received proposals through a business operator recruitment announcement from the 13th to the 23rd and conducted an evaluation committee for the 33rd recruitment of specialty store operation partners. Korail Distribution had held five rounds of bidding from February to June to select an operator for the Sungsimdang location, but all were unsuccessful. Accordingly, Korail Distribution requested a preliminary consultation from the Board of Audit and Inspection in July and drastically lowered the bidding criteria from the previous monthly fee of about 440 million KRW to about 130 million KRW.
Korail Distribution stated, "Through the preliminary consultation with the Board of Audit and Inspection, we have established a new operational plan that can enhance the public value and economic efficiency of commercial facilities at railway stations," adding, "We listened to various opinions from the National Assembly, related ministries, and local governments and devised a reasonable solution that maximizes public benefits without compromising the fairness and objectivity of the procedures."
Korail Distribution is also collaborating with conflict management research institutions to review a reasonable fee system necessary for fostering local enterprises and small business owners. A Korail Distribution official said, "We will fulfill our responsibilities as a public institution more balancedly by preparing support measures that allow promising small and medium-sized enterprises to grow into regional representative companies like Sungsimdang."
Previously, Sungsimdang had a conflict with Korail Distribution over the monthly rent. When Sungsimdang's lease ended, Korail Distribution, as the 'lessor,' put the Sungsimdang location up for competitive bidding and proposed a monthly rent of 441 million KRW, which is 17% of Sungsimdang's average monthly sales of about 2.6 billion KRW. Korail Distribution claimed, "According to internal regulations, the rent range is set between 17% and 49.9% of monthly sales, and this regulation applies equally to other stores besides Sungsimdang." In response, Sungsimdang stated, "We cannot accept rent that is four times higher than the previous rent."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
