South Korea's bullet-train on target
By Andray Abrahamian
There's something eminently satisfying about watching a bullet train smoothly
glide into a station; of cleaving a straight line through a blurry countryside;
of disembarking in a city center, rather than at an airport outside town.
It is an experience becoming more and more common for South Korea, given its
strong commitment to high-speed rail (HSR). Korea is now competing to export
high-speed rail technology to the United States, which might be awakening from
its HSR slumber.
The descriptively named Korea Train Express, or KTX, opened a third line to the
public on Monday. The first train from Seoul to travel the new line had the
usual dozing businessmen in suits, but
also a handful of train enthusiasts, taking pictures and video. Each of the
gleaming new stations on the way had special Korea Railroad greeters and
journalists on hand to welcome both the sunrise and passengers.
Since 2004, two lines have been in operation, together attracting over 100,000
riders a day. One goes down the spine of the country from Seoul to Busan,
linking Korea's four biggest cities. The other branches west down to the port
city of Mokpo, through Gwangju, rather than the more populous and developed
southeast. This was an attempt to compensate for the uneven economic
development of the 1960s and 1970s, when the southeast - the late president
Park Chung-hee's home region - received most of the country's investment and
industry.
The new line also runs from Seoul to Pusan, but swings through this
southeastern industrial heartland on the way. It will shave the travel time
between Seoul and Busan from 2 hours 45 minutes to 2 hours 22 minutes, and will
provide businesses and organizations in the region with far easier access to
the capital. One-day business trips will become more common and efficient. The
first phase of KTX increased the phenomenon of week-commuters going home on
Friday night, returning to work Monday morning. This will likely become more
common, as will long-distance commuting.
It will also knit together the area's cities. For example, the citizens of the
country's wealthiest city, Ulsan, often bemoan the lack of culture or shopping
choices in their city. For them, the new line means the hour-plus drive to
Busan becomes a 15.5 minute train ride. The 90-minute drive to Daegu becomes a
25-minute ride.
Korea's best preserved historical city and number one destination for cherry
blossom admirers, hikers and reluctant groups of school kids on educational
trips, Gyeongju, is also now connected to Korea's major urban centers by the
KTX. There is the wide expectation that there will be a ''tourism renaissance''
for the whole region, anchored by Gyeongju, but supported by a new
accessibility to Ulsan's mountains, beaches and (somewhat meager) cultural
offerings.
The expansion of the KTX system is far from over, however. The administration
of Lee Myung-bak unveiled an ambitious KTX expansion plan in September. This
plan will upgrade speeds on current lines, create new lines so that 80% of the
population will have access to high-speed rail and will eventually make 95% of
the country accessible from any other point in under two hours. Korea, while
not a large country, is not tiny, either- about the size of Portugal.
After aborted plans to dig a ''Grand Canal'' and an attempt to resurrect a
tunnel-to-Japan plan, Lee has found an audacious construction project that
satisfies the polity and his inner builder alike. So far various KTX lines have
received from 35% to 50% of their funding directly from the government, but
unlike the United States, there is little debate about the cost here: it is
accepted that high-speed rail is a crucial 21st century technology and a
hallmark of a modern society. It provides employment, solves current and future
transportation problems, is environmentally friendly and makes commercial
activities more efficient.
However, without strong political backing high-speed rail cannot happen: the
price tag is just too high. Furthermore, it often takes longer than anticipated
to pay off the high construction costs of such projects. Japan, for example, is
still far from recouping its investment in its HSR expansion of the early 1990s
.
It is here that Korea's model of government-conglomerate relations is an
advantage. Japan's colonial legacy and industrial model has for almost 50 years
been used to great effect in South Korea: the government identifies key
industries in which it wants to be globally competitive and creates incentives
for Chaebol (conglomerates) to rapidly move into those industries.
It happened with steel and cars, then semiconductors and now high-speed rail.
Japan is the progenitor of this political-economic model and has a world famous
train system. China meanwhile is developing HSR faster than any country ever.
In 2013, one will be able to travel between Shanghai and Hong Kong - 1,200
kilometers apart - in only 3.5 hours.
It is no coincidence that the two wealthiest countries with the most feeble
high-speed passenger rail systems are the ones that were the most fervent about
reducing state intervention in the commanding heights of the economy. The
Margaret Thatcher-Ronald Reagan era has left both Britain and the United States
with very few high-speed lines (only one in the United States) and those that
do exist meet only the low end of definitions of ''high-speed''.
South Korea, which had to import technology from France just six years ago, now
finds itself poised to export its homegrown HSR technology abroad - and in no
small part competing with neighboring Japan and China.
The first test for South Korean technology is Brazil's plan to connect Rio de
Janeiro, San Paolo and Campinas by high-speed rail, bids for which are being
taken next month. Brazil's first HSR line is projected to cost $19 billion and
is driven by the political will to demonstrate that it can upgrade its outdated
transportation system apace with its economic growth. The original hope was
that it could be ready in time for the 2014 World Football Cup, but the project
has been fraught with problems. Brazil's determination to continue regardless,
however, highlights the need for consistent political support to overcome
technical and financial hurdles.
Next year, the $45 billion prize of California's HSR is up for grabs.
California received $2.25 billion in federal grants to start the project and is
expecting competitive bids from France, Italy, Germany and the three Asian
nations. It was in part for this reason that governor Arnold Schwarzenegger led
a California trade mission to Asia in September, riding trains in Japan, China
and Korea.
Schwarzenegger's California is in financial turmoil and he is keenly aware that
America's reluctant approach to high-speed rail will not provide the investment
needed to get the project moving. Indeed, Washington's ambivalence to
supporting rail development has created something of a paralysis after the
initial burst of stimulus funding to various states for HSR projects. Without
substantial government commitment, private sector participation is difficult to
secure. So it is that the wealthiest state in the world's biggest economy is
forced to go abroad to seek financing and know-how to build a high-speed rail
system.
So what are Korea's chances? By all accounts, quite good. First, Korea's
technology is competitive on price. Furthermore, Hyundai-Rotem, a key member of
the South Korean consortium bidding in California already has a working
relationship with the Southern California Rail Authority, having exported 131
multi-level train cars for use in the Los Angeles area earlier this year. Also,
Hyundai Motors just invested $150 million to upgrade its North America
headquarters in Orange County.
California's Korean presence could be a factor. Los Angeles alone is home to
the world's largest Korean population outside Korea, at over 300,000 and
Korean-American business leaders will function as both an overt and
behind-the-scenes lobbying group. A high-profile hotel renovation in Los
Angeles by Korean Air and Hyundai Motors' recent increase in US market share
only helps Korea's brand image in the state.
The Hyundai-led consortium can also tout Korea's quick recovery and robust
projections for economic stability and growth to help its bid. Again, one sees
the roots of this recovery in the close working relationship between the state
and private sector: Korea's stimulus package was broad and sufficient.
Crucially, it was implemented with speed and with comparatively little
pork-barrel haggling.
Finally, the Korean government can emphasize both in the Californian capital,
Sacramento, and Washington the geopolitical importance of projecting a close,
cooperative alliance between the two countries. Peninsula tensions have risen
to their highest for more than a decade. Stability in the Asia-Pacific will be
aided by boosting the South Korea-US alliance through this deal, Korean leaders
could argue - something that the Japanese would find harder to do, and the
Chinese impossible.
Competition for the project will be extremely fierce, however. Japan's
consortium has offered to take on a huge part of the California HSR project's
debt, around $40 million. China has also proposed a similar package. As
assistance with financing will be a huge factor in California's choice, Korea's
bid will have to find a way to match the loan offers of its neighbors. The
Korean consortium will also have to convince California that it can match far
more experienced European manufacturers like Siemens on quality and system
adaptability.
Korea's development state has decided that air and automobile travel, with
their reliance on imported and increasingly expensive fuel, are the not the
future. High-speed rail runs on the electrical grid from domestically produced
nuclear power and will knit the country together in a rapid-transit web over
the coming decades. If Schwarzenegger gets his way, and possibly with Korean
help, California may soon be on the forefront of an American high-speed rail
future.
Andray Abrahamian is a doctoral candidate at the University of Ulsan,
South Korea.
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