[Teheran-ro] Rail Innovation Australia Has but Korea Lacks
- Input
- 2026-03-30 19:20:12
- Updated
- 2026-03-30 19:20:12

President of the Republic of Korea Lee Jae Myung recently rebuked Dawonsys over its delivery delays, saying the situation was "tantamount to a large-scale fraud case." The Ministry of Land, Infrastructure and Transport has asked the prosecution service to investigate, suspecting that Dawonsys diverted advance payments to build its office building and for other purposes instead of manufacturing rolling stock. Unfortunately, this case vividly exposes in the rail sector the downside of the lowest-bid system, which fails to fully reflect technological capability and quality. It is also one of the reasons why it has been so difficult to see Hyundai Rotem Company’s latest trains running in Korea.
Of course, rolling stock procurement is carried out through tenders based on the specifications requested by the client. However, if a bidder cannot meet the price, it cannot even get to the starting line. Delivery delays and quality problems only become apparent after the contract is signed.
Recently, the National Assembly Research Service (NARS) pointed out in a report that the lowest-price competition method needs to be improved. As an alternative, it proposed a full lifecycle performance management system that would turn data such as on-time delivery rates and initial failure rates into metrics and reflect them in subsequent bid evaluations. Even so, people in the industry do not expect a smooth transition. They worry that work will become concentrated in large companies such as Hyundai Rotem Company.
Not long ago, I learned something unexpected. Parts suppliers in the rail sector were saying they wanted Hyundai Rotem Company to be allowed to bid on projects that had been handled by Dawonsys. A representative of one supplier lamented, "Because of the Dawonsys incident, trust in the technical capabilities of partner companies has been shaken, and the loss of orders is putting a heavy strain on our management."
The lowest-bid system does have advantages: it reduces costs through price competition and can enhance transparency. For mid-sized firms such as Woojin Industrial Systems, it also lowers barriers to market entry. However, this latest case shows that the damage the public must bear is far too great. I hope Korea can introduce a bidding system that both supports coexistence with mid-sized companies and makes it possible to see the kind of new trains I saw in Australia running here at home.
hoya0222@fnnews.com Reporter