World Bank

1. The 10th Meed Rail and Metro Summit
Oct. 20-22, 2014
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Korean Railways Development Case

2. Agenda
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Implication for MENA Region : Egypt Case
Key Success Factors of Korean Railways
Question & Discussion
Korean Railways Development Case

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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

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Korean Railways
Development Case

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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

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Past
Present
Korean Railways

7. 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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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

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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

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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

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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)
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
Independence
Korean War
Railway development event
Major historical event
Entering Modern Era (1945-1955)
Government leadership
Leverage of partnerships
Capacity Building
Established 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)

19. 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(1989)
Public Railroad Construction Promotion Act(1984)

20. 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

21. 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

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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

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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

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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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