LH to be split in two; Korail and SR to merge — airport integration put on hold

The government plans to split Korea Land and Housing Corporation into two separate entities — a tentatively named Housing and Urban Development Corporation to handle land development and housing construction, and a Housing and Urban Asset Corporation to oversee residential welfare and land reserves. Korea Railroad Corporation, known as Korail, and SR, which operates the Suseo high-speed rail line, will be merged to unify the high-speed rail operating system. A previously proposed integration of Incheon International Airport Corporation, Korea Airports Corporation and the Gadeokdo New Airport Construction Authority has been deferred, with the government opting to first pursue measures to revitalize regional airports before revisiting the plan.

The government announced the measures Thursday after they cleared deliberation and approval by the 11th Public Institutions Operation Committee. The overall reduction target covers 109 public institutions. The plan calls for strategic restructuring of agencies managing national infrastructure — including power generation, ports, energy, coal, airports, land and housing, and railways — while consolidating overlapping functions and merging subsidiaries and smaller bodies.

The most significant change is the reorganization of Korea Land and Housing Corporation. The government proposed separating its land development and housing construction functions into the Housing and Urban Development Corporation, while assigning residential welfare and asset reserve functions to the Housing and Urban Asset Corporation. The split reflects a diagnosis that having a single agency handle both development projects and residential welfare has slowed housing supply and increased the burden of managing rental housing, creating inefficiencies.

Even after the split, a financial link between the two entities will be maintained so that revenue from development projects can continue to fund residential welfare. A portion of the Housing and Urban Development Corporation's profits will be deposited into a dedicated account within the Housing and Urban Fund, which will then transfer the funds to the Housing and Urban Asset Corporation — a structure designed to help the welfare arm escape chronic deficits.

The LH restructuring plan unveiled Thursday is preliminary, however. The Ministry of Land, Infrastructure and Transport will release a separate "LH Reform Plan" at a later date, covering the detailed allocation of functions, personnel, assets and liabilities across the two organizations, as well as proposals for restructuring their financial frameworks.

The high-speed rail operating system will also be overhauled. The government plans to merge Korail and SR to expand seat availability, improve fare and mileage systems, and enhance convenience for passengers. The consolidation is also intended to eliminate overlapping functions between the two operators and strengthen overall efficiency. The Ministry of Land, Infrastructure and Transport will work out the specific terms and timeline of the merger, which will then go through the Public Institutions Operation Committee for approval.

The integration of Incheon International Airport Corporation and Korea Airports Corporation will not proceed immediately and has been partially put on hold. The government will instead form a tentatively named Airport Strategy Council — bringing together the Ministry of Land, Infrastructure and Transport, Incheon International Airport Corporation, Korea Airports Corporation and the Gadeokdo New Airport Construction Authority — to coordinate inter-agency cooperation, divide responsibilities and develop a plan to revitalize regional airports.

After implementing tailored strategies for individual regional airports, measures to promote mutual growth between Incheon Airport and regional airports, and financial restructuring plans, the government will assess the results before deciding whether to proceed with merging the two airport corporations. Plans to expand Incheon-to-regional routes, increase direct international flights from regional airports, and develop specialized airports linked to local industries are also expected to be discussed.

In the meantime, aviation security functions currently split between the two airport corporations will be consolidated into a dedicated specialist agency. Security divisions from Korea Airports Corporation and Incheon International Airport Corporation, along with Korea Aviation Security and Incheon Airport Security, will be merged to establish a tentatively named Aviation Security Authority.

Subsidiaries and smaller agencies under the Ministry of Land, Infrastructure and Transport will also be reorganized. Five Korail subsidiaries — including Korail Tourism Development and Korail Networks — will be restructured into three functional units: one for customer service, one for distribution and logistics combining Korail Logistics and Korail Distribution, and one for maintenance covering Korail Tech.

The Korea Spatial Information Industry Promotion Institute and the Korea Spatial Information Quality Management Institute will be merged into a tentatively named Spatial Information Promotion Institute to oversee the entire lifecycle of spatial data, from production through distribution and application. The Construction Technology Education Institute and the Construction Industry Information Institute will be combined into a tentatively named Korea Construction Industry Promotion Institute, consolidating data analysis, workforce development and policy support functions for the construction sector.

The functions of the General Taxi Workers' Welfare Foundation, the Taxi Reduction Compensation Fund Management Agency and the Korea Parking Safety Technology Institute will be absorbed into the Korea Automobile Liability Insurance Promotion Institute. The Korea Aviation Safety Technology Institute will be merged into the Korea Transportation Safety Authority, while the National Aviation Museum and the National Saemangeum Reclamation Museum will be grouped under a tentatively named National Land and Transport Hall.

The government plans to convene the Public Institutions Operation Committee on a rolling basis as individual ministries finalize their agency-specific reform proposals. Cases requiring new legislation or amendments will be coordinated with the National Assembly and local governments, and employees at affected institutions — excluding executives — will in principle have their employment guaranteed through the transition.