The Ministry of Land, Infrastructure and Transport said on the 13th it will review a plan to have Korea Expressway Corporation (KEC) sign direct contracts with businesses entering highway rest areas nationwide. Currently, KEC signs contracts with intermediary operators, which then contract with rest area tenants. Contracts between KEC and intermediary operators are set to expire in stages through 2030, after which direct contracts will be put in place.
The Ministry of Land, Infrastructure and Transport (MOLIT) moved to improve rest area operations after President Lee Jae-myung raised the issue. In a work briefing with MOLIT in Dec. last year, Lee said, "Why are rest areas so expensive when the food isn't good? It turns out that as it goes through several steps, half is skimmed off in rent and fees along the way," adding, "Either make a single company manage (rest areas), or have the government do comprehensive management directly."
MOLIT on the day released findings from an emergency full-scale investigation into unfair practices at rest areas nationwide conducted for two weeks starting on the 13th of last month. The probe found that seven rest areas had delayed 5.3 billion won in payments to their suppliers. The rest areas with unpaid delivery payments were ▲ two at Giheung ▲ Chungju ▲ Manghyang ▲ Pyeongtaekho ▲ Songsan Podo ▲ Yesan Yedamho. MOLIT said 4.8 billion won has since been paid.
MOLIT said it believes the root cause of such unfair practices lies in the multi-layered contracting structure and decided to have KEC contract with and manage the tenant businesses directly. It said KEC had used intermediary operators because that made tenant management easier. MOLIT noted, "If the structure is changed to direct contracts, fees paid by tenants to intermediary operators will disappear, which is expected to help lower rest area product prices."
MOLIT said it received a report during the investigation that former KEC employees, after being hired at subsidiaries of intermediary operators, were engaging in a form of lobbying. It also said it received a report that former KEC employees were taking referral fees from small business owners seeking to enter rest areas and steering them to intermediary operators. MOLIT said, "If specific facts are confirmed regarding the reported unfair practices, we will take stern action."