The Korea Expressway Corporation (KEC) is set to implement a direct contract system with vendors at eight highway rest areas, bypassing intermediary operators. This initiative aims to reduce the average commission rate from over 37% to between 8% and 9%, thereby lowering consumer prices and improving service quality.
On September 22, KEC President Yoo Jeong-hoon revealed the company's management policies and key initiatives during a press conference. He outlined four main management keywords: public safety and service, fairness and trust, coexistence and communication, and future innovation.
The restructuring of the rest area operation model focuses on eliminating the intermediary operator step in the existing contract structure, which involves KEC, the operator, and the vendor. By contracting directly with vendors, KEC aims to reduce the burden of intermediary commissions and rental fees, translating these savings into lower consumer prices. The Yeoju rest area on the Incheon direction is targeted to begin operations before the 2027 Lunar New Year holiday.
A joint survey conducted by the Ministry of Land, Infrastructure and Transport and KEC in May found that the average commission rate for rest areas is 37.4%. KEC aims to lower this to an average of 8% to 9%, which is about one-fourth of the current rate.
To ensure that the reduction in commissions benefits consumers rather than just vendors, KEC plans to implement management measures that consider market price levels in evaluations. Regular operational assessments will be conducted to monitor improvements in pricing and service quality. Additionally, KEC will work on expanding consumer choices by lowering food prices and increasing the availability of convenience store ready-to-eat products.
The number of vendors eligible for direct contracts may increase. President Yoo stated that KEC will first assess the performance of the eight rest areas before adjusting the scope and pace of expansion. The establishment of a separate public management company has not been finalized, and options such as expanding the existing direct contract task force or utilizing subsidiaries will be considered in the future.
KEC will also revise the operational structure related to its retirees. The company will exclude the participation of the Do-seong Association's investment company in new bids for rest area operations. Currently, the Do-seong Association operates six out of 215 rest areas and four out of 226 gas stations, accounting for only 2.3% of the total. To eliminate any preferential treatment concerns for retirees, KEC will apply penalties to companies that rehire retirees within three years of their departure during the bidding process.
Renovations of aging highways are also underway. A remodeling project covering 371.3 kilometers is currently in progress, with an investment of 1.135 trillion won, and plans to invest 2.448 trillion won in 14 additional routes spanning 652.5 kilometers. KEC will also expand the use of a 'full closure' method for construction, which involves closing entire sections at once instead of piecemeal closures.
Furthermore, KEC is pursuing projects to utilize highways as energy infrastructure. The corporation is negotiating a pilot project with Korea Electric Power Corporation to establish a power grid beneath the highways and is considering joint construction of new highways and underground installations along existing routes. Plans are also in place to increase solar power generation capacity on highways from the current 162 megawatts to 260 megawatts by 2030.
President Yoo emphasized, "KEC's business direction should shift from the traditional government and corporate-centered 'B2G and B2B' model to a more direct 'B2C' approach that engages with the public. We will focus on enhancing user experience in terms of pricing and service quality at rest areas, viewing them as integral parts of the highway experience rather than separate facilities." He added that KEC plans to strengthen protective equipment and expand mechanization in maintenance processes to reduce risks for workers, stating, "Even if it costs more, we are committed to investing in safety for human lives."
* This article has been translated by AI.
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