The Korea Railroad Corporation (KORAIL) has come under scrutiny for signing an additional contract with Daewon Systems in 2024, despite being aware of the company's delivery delays and management issues. KORAIL President Kim Tae-seung acknowledged that the decision was a result of poor judgment.
During a National Assembly audit on October 13, independent lawmaker Jang Kyung-tae raised concerns about KORAIL's vehicle contracts with Daewon Systems and the ongoing delivery delays. Jang pointed out that KORAIL signed a third contract on April 26, 2024, even though deliveries from the first and second contracts were already delayed.
KORAIL had previously contracted for 150 vehicles in the first batch and 208 vehicles in the second batch, with an additional 116 vehicles contracted for 2024. Reports indicate that 30 vehicles from the first batch and 184 from the second batch have yet to be delivered, meaning approximately 88% of the second batch remains outstanding.
Jang criticized KORAIL for conducting a site inspection before the third contract, during which it was determined that Daewon Systems could produce about 240 vehicles annually. He questioned the basis for this assessment given the company's failure to fulfill existing contracts.
In response, Kim Tae-seung admitted, "I acknowledge that we made a poor judgment." He noted that when the initial vehicles were not delivered on time in early 2023, the seriousness of the issue was not fully recognized. He also mentioned that only four out of the 40 vehicles scheduled for delivery in 2024 had arrived, indicating a lack of awareness regarding the severity of the situation.
Jang pointed out that KORAIL's internal monthly progress reports had repeatedly highlighted Daewon Systems' management difficulties and production delays. According to the documents he presented, a September 2023 report indicated that the company's financial struggles made it difficult to secure funding, leading to delays in obtaining key components due to unpaid debts to subcontractors. Similar issues were reported in November 2023 and January 2024, citing problems with parts inspections and production delays due to the company's circumstances.
Jang asserted, "Given that management and production issues have been reported multiple times, we need to investigate whether there were any problems in the process of signing the third contract through audits and investigations."
KORAIL responded, stating, "We will verify the relevant facts."
* This article has been translated by AI.
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