Highway rest stop operations to be managed by public company, ousting KEC retiree groups

South Korea is overhauling its highway rest stop management system, moving away from a model that had been criticized for fostering cartels among former Korea Expressway Corporation (KEC) employees. The Ministry of Land, Infrastructure, and Transport announced on May 9th that a newly established public management company will directly contract with vendors operating within the rest stops.

This significant shift aims to dismantle the previous multi-layered structure, which involved KEC, intermediate operating companies, and individual vendors. For years, a KEC retiree group, known as Doseonghoe, allegedly monopolized rest stop operations through its subsidiaries. Investigations revealed that Doseonghoe charged vendors fees as high as 33% of their sales, while KEC reportedly leaked bidding information, creating an unfair advantage.

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With the start of 8 rest stops opening within the year, we will boldly dismantle the unreasonable structures and fill their place with only the convenience of the people, returning the rest stops to the public.

The new public management model is projected to reduce rental fees for vendors to approximately 8-9% of sales, a substantial decrease from the current rates. This reduction is anticipated to address long-standing issues of overpriced food and subpar services at rest stops. To ensure fairness, vendor bids will be evaluated by an external review committee. Furthermore, current KEC employees, those who retired within the last three years, and their immediate family members will be barred from participating in the bidding process.

The public management company is slated for establishment in early next year. Hong Ji-sun, the Vice Minister of Land, Infrastructure, and Transport, stated that about 100 of the 200 highway rest stops are expected to be managed by this new entity within the year. "We will exclude KEC alumni from top management positions, bringing in individuals with proven expertise from the private sector," Hong added. The ministry plans to implement this reform starting with eight rest stops that are either newly built or whose contracts are expiring this year.

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About 100 of the 200 highway rest stops are expected to be managed by the public management company within the year. We will exclude KEC alumni from top management positions, bringing in individuals with proven expertise from the private sector.