Rail merger plan sparks dispute between KORAIL, SR

An SRT train waits at a platform inside Suseo Station in Seoul, Dec. 8. Yonhap

Korea’s plan to merge its two high-speed rail operators, Korea Railroad (KORAIL) and SR Corp., has turned into a dispute between parties, with the government and KORAIL touting consumer benefits while SR questions the data behind those assertions.

SR, the state-run operator of SRT services from Suseo Station in Seoul to 29 destinations nationwide, argues that the merger would harm the country’s railway industry by eliminating competition between the two operators.

KORAIL, together with the Ministry of Land, Infrastructure and Transport, is moving ahead with preparations for the merger. The operator of KTX services, which serve 77 stations across eight routes, maintains that integration would deliver greater benefits to passengers.

Since Dec. 10, the SR labor union has issued a series of statements condemning the government’s merger roadmap. Workers at the company, established in 2016, say competition between KORAIL and SR has been a key driver of service improvements and industry growth, warning that a merger would undermine fair market competition.

The union also said that the chronic seat shortage on SRT services — cited as a main justification for the merger — cannot be resolved simply by integrating the two operators. It also pointed to KORAIL’s debts amounting to about 22 trillion won ($15 billion).

SR posted sales of 714 billion won last year and has around 680 workers. KORAIL recorded sales of 6.53 trillion won in 2024 and has approximately 32,000 employees. While SR generated billions of won in operating profit last year, KORAIL reported an operating loss of more than 111 billion won during the same period.

“The government’s merger roadmap, with a completion target set for next year, is superficial and fails to address the underlying structural problems,” the SR labor union said. “What the industry needs is not a merger but new legislation to ensure fair competition between the two operators and to build sustainable competitiveness.”

The union also rejected KORAIL’s claim that the merger would create 16,000 additional seats for passengers, saying the state rail operator has not disclosed how it calculated the figure.

“The shortage of seats on SRT services is not the result of the two companies operating separately but of the government’s flawed assessment of public demand for SRT trains,” the union said.

KORAIL's headquarters in Daejeon / Courtesy of KORAIL

The SR labor union warned that the merger could lead to an all-out suspension of train services if workers at the merged entity were to stage a walkout. It also pointed to KORAIL’s weak financial condition, saying that allowing the company to monopolize the industry through the merger would be “dangerous.”

“KORAIL has benefited from various government incentives, including priority access over SR to carriage depots and stations, rolling stock maintenance and leasing, and railway usage,” the union said. “Despite this support, the company continues to carry heavy debt. If an operator like KORAIL monopolizes the industry, safety and efficiency in train operations, as well as service quality, will be threatened.”

KORAIL, meanwhile, has kept a low profile, coordinating with the government on the timing of a detailed plan to bolster the merger’s legitimacy. A KORAIL official said the company is capable of addressing all issues raised by SR but has agreed with the government not to “provoke SR with arguments.”

The official added that the merger plan is irrevocable, agreed upon by the government and KORAIL.

Explaining how the merger could generate 16,000 additional seats, the official said KORAIL conducted simulations based on deploying KTX trains to Suseo Station. KTX-1 trains — the first KTX model introduced in 2004 and based on France’s TGV — have 955 seats, compared with 410 seats on SRT trains.

“By deploying a KTX-1 train to Suseo Station, we can operate an additional round trip departing from there,” the official said. “This would also save about an hour at Busan Station that is currently needed to clean and prepare an SRT train bound for Suseo.”

The official dismissed the SR union’s warnings of a potential walkout and a complete suspension of train services, saying emergency operations are always prepared for such scenarios.

“Railways are an essential public service in Korea,” the official said. “We are required to maintain minimum operations even during walkouts, which allows us to operate about 90 percent of regular subway services and 80 percent of high-speed rail services.”

The government announced the merger plan on Dec. 8, saying it aims to launch a unified booking platform for KTX and SRT services by next March and complete the integration of the two companies by the end of 2026.

To enable the new booking system, the authority said it will add Suseo Station as a new stop for KTX trains departing from Seoul Station. The ministry said the new link between the two major stations will increase train services on the route and improve seat availability for users of both systems.