First direct-contract tender for rest areas; fees to fall at 8 sites

[Financial News] The first tender allowing highway rest-area tenants to contract directly with the Korea Expressway Corporation, without going through an intermediary operator, has begun.
According to the Korea Expressway Corporation on the 30th, it finalized a pilot-operation plan for directly contracted rest areas in line with the “Plan to Reform the Rest-Area Operating Structure” released by the Ministry of Land, Infrastructure and Transport on July 9, and posted a tender notice on its electronic procurement system that day. Direct contracts between the corporation and tenants will significantly reduce the average fees paid by businesses. The corporation aims to ensure that the savings go toward better service and price stability, so visitors can feel the benefits.
The pilot rest areas are Yeoju (Incheon-bound), Daecheon (Seoul- and Mokpo-bound), Jangyu (West Busan-bound) and Gunwi (Busan-bound), where existing contracts are expiring, as well as the newly opening Wolchulsan and Hapcheon Lake (Hamyang-Ulsan-bound). The outlets open for bids include food courts serving meals, open retail outlets selling snacks, cafes and convenience stores. Cafe contracts will be offered for both regular cafes with seating areas where visitors can take a break and value cafes charging no more than 2,000 won.
The biggest change is in how operators are selected. Until now, the outcome hinged on how high a rental rate bidders offered. From now on, the contract will go to the highest-scoring bidder based on combined scores for contract performance capability, service operations and price. Contract performance capability will be assessed based on factors such as credit ratings and operating experience. Price, service, hygiene and safety are central to the service-operations assessment. Both corporations and individual businesses can bid as long as they meet the sales requirements for each tender lot.
The service assessment focuses on changes visitors can notice right away. For meal and snack options, it will consider selling prices and whether domestic ingredients are used. For value cafes, it will assess how cheaply they sell coffee; for convenience stores, it will look at benefits such as buy-one-get-one-free deals, loyalty points and partner discounts. The prices and customer benefits proposed by bidders, along with their quality-control and operating plans, will continue to serve as benchmarks for service evaluations after contracts are awarded, helping ensure that promised improvements are actually delivered.
The tender is divided into 10 concession packages. Meal and snack outlets have been combined, and, depending on sales volume, multiple rest areas in the same business category have been grouped into a single package where necessary. When preliminary specifications were first released on July 13, the corporation considered splitting the tender lots into smaller units. After consulting experts, however, it redesigned the packages to ensure a stable supply of quality services. In particular, value cafes and convenience stores—which must keep prices low and require careful management of product supply, logistics and inventory—are being tendered in packages of four rest areas each. The winning bidders must operate the outlets themselves. Subcontracting any part of the operation to a third party, or handing it over through product-supply or consignment-sales arrangements, is prohibited. Violations will draw severe measures, including contract cancellation.
New safeguards have also been introduced to prevent former officials from influencing the process and to address concerns about fairness. Companies whose representatives are people who retired within the three years before the tender notice, current employees, or their spouses or immediate family members may not bid. Companies established by retirees’ organizations will have 25 points deducted from their technical-capability score. The evaluation committee will be made up entirely of outside experts.
This tender is the first step in the government’s effort to dismantle the multilayered operating structure at highway rest areas. Under a plan announced by the Ministry of Land, Infrastructure and Transport in July, tenants had paid an average of 33% of their sales in fees—and as much as 51%—because of the structure linking the Korea Expressway Corporation, operating companies and tenants. The government said it would bring fees down to around 8–9% and charge management costs separately. A specialized public company for operations management, set to launch early next year, will handle direct-contract work; until then, the Korea Expressway Corporation will do so. Doseonghoe, an association of the corporation’s former employees, and its subsidiaries have also been required to leave the rest-area business.
Yoo Jeong-hoon, president of the Korea Expressway Corporation, said, “This tender notice is the first step toward reforming the rest-area operating structure, with public convenience as our top priority.” He added, “Given the high level of public interest, we will conduct the operator-selection process fairly and transparently and make thorough preparations to ensure that people can experience service improvements at eight rest areas.”

[email protected] Jeong Gyeong-su Reporter