The Korea Railroad Corporation (Korail) has integrated its five subordinate subsidiaries into three specialized companies, with expectations for various service improvements.

The Ministry of Land, Infrastructure and Transport and Korail announced on the 23st that they have concluded the subsidiary integration procedures and will operate under a three-specialized-company system focusing on customer service, distribution & logistics, and maintenance & management starting today.

Specifically, Korail Networks and Korail Tourism Development have been merged into Korail Tourism Networks (a tentative name), a customer service specialized company. Meanwhile, Korail Distribution and Korail Logistics have been integrated into Korail Distribution & Logistics (a tentative name), a distribution and logistics specialized company. The official names of the integrated subsidiaries will be finalized within this year after gathering employee feedback.

Korail Tech stated that it will maintain its existing organization while strengthening its expertise in maintenance and management.

This integration is the result of structural reorganization efforts that have been underway since last December. It was finalized at the Public Institutions Operation Committee last June following discussions by a tripartite consultative body involving labor, management, and the government.

The Ministry, Korail, and each subsidiary announced 10 public-perceptible service improvement tasks resulting from the integration. Representative measures include expanding "1+1" and "2+1" discount events at station convenience stores, Storyway. Additionally, price competitiveness will be enhanced by reducing distribution steps through direct transactions with overseas manufacturers and suppliers for certain imported goods.

Vending machines with low utilization rates inside KTX trains will be replaced with luggage storage spaces. Starting in late October, a 30% parking fee discount will be provided to all users of Korail Tourism Networks railway tourism products. Korail Tech will also strengthen its restroom cleaning capabilities by introducing artificial intelligence (AI)-based cleaning equipment.

Korail and its subsidiaries plan to draw up a roadmap for functional adjustments by the first half of next year, complete consignment contracts by the end of next year through consultations with related organizations, and pursue the integration under the principle of succession of employment. Pending issues such as wages, personnel administration, and working environments are scheduled to be discussed in the tripartite consultative body.

Meanwhile, workers at Korail's subsidiaries entered a three-day general strike starting on the 21st, demanding improved treatment and direct employment.

Kim Tae-byung, Director General for Railway Policy at the Ministry of Land, Infrastructure and Transport, stated, "This subsidiary integration is intended to clarify the roles of each subsidiary, enhance expertise in each field, improve convenience for railway users, and strengthen safety."

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