Infrastructure Policies and
Private Participation in Investment
Oct. 22, 2004
Heung-Soo Kim
Managing Director
Private Infrastructure Investment Center of Korea Korea Research Institute for Human Settlements
Private Participation in Infrastructure in Korea
Prepared for KOICA Program KRIHS, 22 October 2004
History of Korean PPI Policy Direction Key Features of Korean PPI Introduction of PICKO Korea PPI Market Outlook
CONTENTS CONTENTS
Before PPI System( ~’94)
From 1968 to 1994, 93 infrastructure projects valued at USD 2.7 billion were implemented with private investment Withouta comprehensive legal system, each project was promoted based on individual laws such as the Road Act, Harbor Act, etc. This ad hoc approach was limited in scope and had less than satisfactory resultsHistory of Korean PPI History of Korean PPI
Introduction of PPI System (’94~’98)
1994 : Legislation of Act 45 projects promoted Initial success less than anticipated Concessionaires designated in only 10 projects Little significant progress shown in other projects No foreign capital invested Financial Crisis in 1997History of Korean PPI History of Korean PPI
PPI under New Framework (’98~Present)
1998 : Amendment of Act Cancellation of 22 out of 45 projects 1999 ~ 2002 : Progress Total 37 projects under central government •14 new projects promoted / 7 were unsolicited Total 92 projects under municipal government Foreign Investment •USD 300 mil. in contracts has been signed •USD 3.2 bil. is expected to be signed soon 2001 : Publication of the 10-Year Plan for PPIListing of all projects of high investment need and priority to be promoted as PPI
History of Korean PPI History of Korean PPI
Comparison - B efore / After 1998
26.8 mil.- 90% - 9.05 8.06 Tunnel B
- - 90% - 9.71 7.17 Tunnel A
416 mil.
- 90% 80% 9.5 7.4 Port A
350 mil.
- 90% 80% 9.24 6.81 Road B
- - 90% 80% 9.7 8.89 Road A
Gov ’t Subsidy
*Revenue Guarantee
IRR (real)
*USD
History of Korean PPI History of Korean PPI
C ontract A warded P rojects Central Central Gov Gov ’ ’ t t : USD 14.3 : USD 14.3 Bil Bil in in 19 projects( 19 projects( ’ ’ 03.6) 03.6)
zMunicipal Gov’t: USD 3.9 Bil. in 79 projects (’03.6)8.3 (11) 2.7 (4)
3.0 (2) 0.3 (2) RoadHarborRail & LRTLogistics
Units : USD Bil.
P rojects u nder N egotiation y Central Gov ’t : USD 5.4 Bil in 14 projects( ’03.9)
2.9 (6)
0.6 (3) 1.6 (4)
0.3 (1)
RoadHarborRail & LRTLogistics
Units : USD Bil. yMunicipal Gov’t: USD 935 Million in 15 projects(’03.6)
Foreign Investment Statistics
(Unit : USD Million)14 4 10 # of
Projects704 515 189
Confirmed
883 179 Total
615 100
Debt Finance
268 79 Equity
Total
Under Nego
Change in Policy
Government PlanningPrivate Initiative •Policy Oriented Project Development •Government Led Project Development•Biz Needs Oriented Project Development •Facilitation of Unsolicited Projects
Policy Direction Policy Direction
Change in Policy
Restrictive RegulationSupportive Regulation •Approved methods of promotion : BTO, BOO •Classification of types of infrastructure Unequal Treatment•Approved methods of promotion : All Types •Elimination of classifications Equal Treatment
Policy Direction Policy Direction
Eligible Facilities
RoadRoad3 3
RailwayRailway2 2
HarborHarbor3 3
EnergyEnergy3 3
EnvironmentEnvironment
6 6
DistributionDistribution
3 3
CultureCulture
& Tourism& Tourism
7 7
AirportAirport
1 1
Water Water ResourceResource
4 4
CommuniCommuni --cationcation2 2
34 types of infrastructure facilities in 10 categories
Key Features of Korean PPI Key Features of Korean PPI
Unsolicited Projects
Project DismissalProject Dismissal
Project Preparation & SubmissionProject Preparation & Submission
Evaluation of ProjectEvaluation of Project
Public Notification of ProjectPublic Notification of Project
More Proposals Tendered)((More Proposals Tendered)
Evaluation of all ProposalsEvaluation of all Proposals
Contract Award to Winning BidderContract Award to Winning Bidder Negotiation of Concession AgreementNegotiation of Concession Agreement
No Alternative Proposals)((No Alternative Proposals) Contract Award to Initial BidderContract Award to Initial Bidder
UnqualifiedUnqualified
ProjectProject
Qualified ProjectQualified Project
Key Features of Korean PPI Key Features of Korean PPI
Solicited Projects
Public Notification ofPublic Notification of Instruction for ProposalInstruction for Proposal
Evaluation of ProposalsEvaluation of Proposals Engineering Plan ApprovalEngineering Plan Approval
Submission of Project Submission of Project
ProposalsProposals
Negotiation of ConcessionNegotiation of Concession Agreement & Designation ofAgreement & Designation of ConcessionaireConcessionaire
Confirmation of Confirmation of Project CompletionProject Completion
Project ImplementationProject Implementation
Selection of Private Selection of Private
Investment Project Investment Project
PBCConcerned Ministries/ (PICKO) Concerned Ministries Concerned Ministries
Concerned Ministries/ (PICKO) Concerned Ministries/ (PICKO)
Key Features of Korean PPI Key Features of Korean PPI
Project Financing Criteria
FIRR (relative to) •Borrowing rates •Risk premium •Competitive rates Guideline : 12~15% (Nominal) •Type of project •Level of riskKey Features of Korean PPI Key Features of Korean PPI
Land Acquisition
Use of public land wherever possible Government acquisition of private land prior to concession Use of eminent domain where necessary to enable project concessionaire to complete land acquisitionKey Features of Korean PPI Key Features of Korean PPI
Revenue Guarantee
Negotiated as part of Project Agreement Based on Annual Projected Revenues as follows:Solicited Solicited < 90% < 90% < 80% < 80% > 110% > 110% Proponent Proponent Rebate Rebate > 120% > 120%
Government Government Subsidy Subsidy
Unsolicited Unsolicited
Key Features of Korean PPI Key Features of Korean PPI
Revenue Guarantee Revised in 2003
Guarantee up to 90%(80%) of revenue for first five years, 80%(70%) for second five years, and 70%(60%) for third five years Symmetric rebate arrangement Self Responsibility Limit of 50% is introduced : Difference between 50% and upper limit is guaranteedKey Features of Korean PPI Key Features of Korean PPI
F/X Risk Sharing
Allowable fluctuations of ±20% Mitigation measures Adjustment of tariffs Direct operating subsidies Contract re-negotiationKey Features of Korean PPI Key Features of Korean PPI
Tax Incentives
No acquisition and registration taxes : BOT Application of 0% for value-added tax on facilities and construction services : BOT, BTO Tax reduction for infrastructure bonds Reduction and exemption from various appropriation chargesKey Features of Korean PPI Key Features of Korean PPI
PICKO’s Functions
Review and evaluate solicited and unsolicited project proposals Assist foreign investment Negotiate to conclude concession agreements Research & formulate PPI policies •Covers 2-3 research topics each year •Assists MPB in policy makings Provide educational programs •1~2 programs a year •Private sector individuals and government officialsIntroduction Introduction of PICKO of PICKO
Organization
Introduction Introduction of PICKO of PICKO
Director Advisory Committee Project Team 1 (Roads and Harbors) 15 staffProject Team 2 (Environmental facilities, etc.) 15 staff
Performance by Function
Introduction Introduction of PICKO of PICKO
3068461697220Total264-1084Feasibility studies, etc.
112292523323Negotiation & Contract review
18-7821Project proposal valuation
108392219235Project proposal review42127977RFP preparation/Review
Total‘03‘02‘01‘00‘99Function
Performance by Project Type
Introduction Introduction of PICKO of PICKO
222010990322598Total3534288627’03
6--1252621’02
33312411717’01
91241911323’00
1--24-310’99
OtherAirportTourLogisticEnvironHarborRailRoadYear
PPI Presentations in Korea
Oct 1999, Seoul Organized by PICKO Co-sponsored by MPB, MOCT, MOMAF, World Bank Participants: Finance professionals, consultants, engineers, and contractors from over 10 countriesIntroduction Introduction of PICKO of PICKO
PPI Presentations Overseas
First Road Show •March 2000, Milan, Paris, Frankfurt Second Road Show •June 2000, Tokyo Third Road Show •March 2001, New York, Chicago, LA Fourth Road Show •June 2002, Sydney, Tokyo, London, Hong Kong Fifth Road Show : November 2003, Singapore, Hong KongIntroduction Introduction of PICKO of PICKO
Korean Economy
1,2506.63.06.0‘02 1,2917.14.13.0‘01 1,1319.42.39.3’00 3.110.9-6.75.0%Growth rate
1,1931,1901,399951KRW/USD
5.48.915.113.4%
Interest rate
3.60.87.54.5%
Inflation rate
‘03’99’98’97
Korea PPI Market Outlook Korea PPI Market Outlook
Estimate of Needed Investment in Infrastructure
Estimated infrastructure investment demand in the 10-year plan:
USD 153 Billion (USD 13 -15.3 Billion annually) Anticipated government expenditure in infrastructure over the plan period: USD 122.5 -138.8 Billion
Korea PPI Market Outlook Korea PPI Market Outlook
Private Infrastructure Investment Needs
Shortage of USD 14.2 -30.5 Billion (USD 1.5 -3.0 Billion annually)Korea PPI Market Outlook Korea PPI Market Outlook
Active participation by private sector is urgently needed to mitigate this shortage of public fundsProjects Listed in the PPI Plan Total Project Cost : USD 48.4 Billion
36.012.448.4179Total14.70.715.420Other Facilities
1.71.33.089Environment Facilities
3.22.15.329Harbor6.24.010.223Rail10.24.314.518Road
Private InvestmentGovernment SubsidyTotal Project Cost
No. of Projects
Classification
(USD : Bil.)
Korea PPI Market Outlook Korea PPI Market Outlook
Major Changes in 04 Annual Plan for PPI (1)
•Induce pension funds and insurance companies to invest more in the PPI projects ㅇIncrease equity participation of pension funds and insurance companies in the infrastructure funds in the future ㅇIf financial investors' share of equity is over 50%, minimum equity requirement will be reduced from 25% to 20%Major Changes in 04 Annual Plan for PPI (2)
•Diversify eligible projects to include not only large transportation infrastructure but also public buildings, cultural/sports facilities, energy related facilities, etc. ㅇDiversify delivery methods from BTO, BOO to cover BTL, RTL alsoMajor Changes in 04 Annual Plan for PPI (3)
•To intensify competition, ㅇWhen no competitive bidding is made, the concerned authority must invite rebidding at least once ㅇIf preferred negotiator is chosen through competition, the reviewing process by National Procurement Office will be exempted ㅇThe weight given to quality and price factors of project proposal will be increasedMajor Changes in 04 Annual Plan for PPI (4)
•For optimal implementation of PPI projects, pre- feasibility study will be carried out before accepting unsolicited proposals exceeding 300 billion won •Improve the accuracy of traffic forecast ㅇSurvey regional origin-destination traffic flow in 2005 and provide the DB by 2006 ㅇProvide manual for traffic forecastMajor Changes in 04 Annual Plan for PPI (5)
•Simplify PPI implementation process and shorten the time period ㅇRespect business conditions if the proposal undergoes effective competition to minimize negotiation time, start environment impact analysis earlierContribution to National Balanced Growth Contribution to the Low Income Group Which Facilities Opened to PPI Why PPI? Finance vs Efficiency Other Comments and Questions
Issues for Discussion Issues for Discussion
Thank You Very Much
Building a Globally Building a Globally Competitive Competitive Transport Network Transport Network T ran sp o rtatio n S e c to r (2 0 0 0 T ran sp o rtatio n S e c to r (2 0 0 0 - - 2020) 2020)
The Fourth National Comprehensive Territorial PlanThe Fourth National Comprehensive Territorial Plan Prepared for KOICA Program by Heung SooKim KRIHS, 22 October 2004KRIHSKRIHS
Cont ent s Cont ent s 1. Trends and Prospects 2. Outlook for Change 3. Major Goals and Implementation Plan
KRIHSKRIHS
1. 1. Trends and Prospects Trends and Prospects 1) Current Status and Problems
Shortage of transportation facilities due to lack of investment ÆRoads, rails, harbors, airports : all experiencing bottlenecks, impeding national economic growth ÆSupply of infrastructure has fallen behind fast-growing transport demand In the 80’s absolute investment amount was small (2% of GDP) In the 90’s investment allocation was inappropriateKRIHSKRIHS
Weak interactive consideration of regional development, transport network, transport modes ÆInvestment centered around metropolitan areas and Seoul-Pusancorridor ÆTransportation network along East-West axis is relatively weak compared to South-North axis ÆInstead of a comprehensive solution, a point specific remedy was prescribed, creating new bottlenecks ÆSector-specific investment resulted in weak coordination among transport modes
KRIHSKRIHS
Deteriorating environment and safety
Æ38% of large city air pollution is vehicular ÆSurge in human and property losses from auto accidents (1997: 12,000 deaths) CDeaths per 100,000: U.S. 15.6, Japan 8.5, Korea 27.7 Ineffective operation and regulations
ÆInsufficient use of traffic information, etc. to optimize facility use ÆFacility provision from supplier point of view ÆRegulations that complicate efficient supplyKRIHSKRIHS
2) Outlook for Change Continuing increases in traffic demand
ÆCar ownership expected to climb to developed country standards (1 car per 2 persons) ÆRising incomes, industrial diversification increase passenger, cargo demand ÆIncreasing N/S Korea exchanges expected to raise traveling distances and traffic Domestic passenger1 Domestic cargo 2 International passenger 1 International cargo 2236,943 138,189 74,570 4,180,272
408,545 269,480 324,595 9,347,833
2.4 2.9 6.6 3.6
19972020Annual growth (%)Traffic type Traffic Demand Projections 1 millions of passenger miles2 millions of ton miles
KRIHSKRIHS
Globalization of Economic activities
ÆInternationalization of industry, liberalization ÆGrowth in Northeast Asian cooperation Demand for Upgrading, “greening ” of facilities
ÆNew technology developments: ITS, mag-elev trains, STOL planes, etc. ÆReduction of work traffic through informatization and increase in leisure travel ÆEnergy conservation, pollution controlled development of new modes of transportKRIHSKRIHS
Increasing recognition of aging society and Consideration for the Handicapped
ÆRise in demands for traffic information and door-to-door service for elderly ÆProjected growth in demand for facilities and services for handicapped, childrenKRIHSKRIHS
2. 2. O u tlook for C hange O u tlook for C hange
1) Rational modal allocation of traffic demand 2) Nationwide integrated transportation system 3) International transport infrastructure to become “Gateway to Northeast Asia” 4) Safety-oriented, environment-friendly facilities 5) Lower cost transport network to increase investment efficiencyAim For Globally Integrated Comprehensive transport network
KRIHSKRIHS
3. 3. M a jor G oals and M a jor G oals and Im pl em entation Plan Im pl em entation Plan 1) Rational Modal Allocation of Traffic Demand Demand allocation recognizing characteristics of different modes of transport
ÆEmphasis on roads for short passenger trips, railways for long-haul cargo ÆPriority to main road network completion, then later stage of the plan, expand railway network ÆIncrease in airport investment to handle medium and long-distance demand in the interimKRIHSKRIHS
2020 Domestic Transport Demand Sea Air Rail Road< Key >
Passenger
1997
Passenger-Km or Ton-Km (%) Cargo
2020 4.0% 88.2 %
0.2% 7.6%
5.1% 75.1 %
0.3% 19.5 % 0.1%
56.6 %
32.8 % 10.5 %11.3 %
47.1 % 41.2 % 0.4%
KRIHSKRIHS
Hierarchial development of airports and harbors to form “Gateway to Northeast Asia ”
ÆIncheonInternational Airport handle global demand, regional hub-spoke airport system support medium to short distance overseas travel ÆPusan-Gwangyangmega-hub ports handle transit cargos and major import/export, regional ports for medium-and short-haul domestic and int’l cargoKRIHSKRIHS
Increased investment for intermodal transport linkages and high-efficiency facilities
ÆIntegrated transport systems at key transport facility points such as ports and industrial complexes ÆMetropolitan transport network linking road and rail networks Phased preparation for N-S Korea exchange
ÆInitially harbor/airport linkages, then road links ÆUltimate goal of Eurasia linking networkKRIHSKRIHS
Nationwide 30-minute access to core transport network
2) Nationwide integrated transportation system Roads
ÆIntegrated road network plan for expressways and national roads to provide basis for long- term development of national territory ÆExpressways 7 south-north and 9 east-west expressways to reflect transport demand and balanced development Integration of metropolitan beltways into core national road networkKRIHSKRIHS
ÆNational roads Reduction in logistics costs and passenger discomfort through continuous construction of national roads and alleviation of bottlenecks In particular, construction of over 2,000 km of alternate roads for towns, townships, and counties to reduce interaction of local and pass-through traffic ÆCompletion by 2020 of national road network: 87,000 km (current) to 200,000 km Expressways -1,900 km →6,100 km National roads -12,500 km →19,000 km
National Highway Network Plan
Key Existing PlannedKRIHSKRIHS
Main Network Access Roads (1999)Main Network Access Roads (2020) KRIHSKRIHSNo Expressways w/i30 minutes distance
KRIHSKRIHS
Railways
ÆGradual increase in use of railroads through expansion and improvement ÆHigh-speed rail network expansion Seoul-PusanHigh-Speed Line completion in 2010 Steady progress on HonamHigh-Speed Line to accommodate West Coast development needs Double-tracking and electrification of existing lines, connection to high-speed network In the longrunconnect to Northeast Asia rail networkKRIHSKRIHS
ÆExpansion of regular rail network Straightening, double-tracking, electrification of existing lines to increase capacity, usefulness Double-tracking, electrification of Gyeongbu, Honam, Jeolla, Jungang, Choongbook Renovation and extension of Gyeongjeon, Gyeongchun, Janghanglines Linkage of NE Capital Area and GwangyangPort through construction of Asan~ Capital Area line Construction, expansion of East Coast lines, Gyeongui, Gyeongwon, Mt. Keumganglines for North – South relations
KRIHSKRIHS
ÆDevelopment of Wonju~ Gangneungand other east-west lines for East-West transaction, balanced regional development ÆConstruction of industrial rail network for DaebulIndustrial Complex; and Asan, Gunjang, Gwangyang, and Busanports ÆBy 2020, expand rail extension by 40% to 4,200 km double-tracking increased by 2.6 times to 74% electrification increased by 4 times to 85%
Regular Electrified High-speed
NewModificationKey
KRIHSKRIHS
Rail Network Plan
KRIHSKRIHS
Ports
ÆDevelopment of Pusan, GwangyangPort into large-scale hub port Consider combined administration of the two ports to increase competitiveness, facilitate ease of use ÆExpand Incheon, Asan, Gunjang, Mokpo, Masan, Ulsan, Pohang, Gangwonports as regional hubs Construction of North Incheon, MokpoNew Outer, UlsanNew, PohangYeongilNew ports Ongoing construction of Pyeongtaek(Asan) and Gunjangports, renovation of IncheonSouth, Mokpo and other ports to improve efficiencyKRIHSKRIHS
ÆExpansion of local ports Construction of BoryeongNew Port, renovation of existing ports (East Sea, Jeju, etc.) Study possibility of SaemangeumNew Port in relation to Saemaengumreclamation project ÆRaise effectiveness of harbors by functional differentiation ÆTransformation of ports into Third Generation logistics centers by integrating transport, logistics, and information networks
Harbor Map
Key Local port Hub port Main port New portKRIHSKRIHS
KRIHSKRIHS
Airports
ÆIncheonInternational Airport, opened in 2001, to become NE Asia hub by 2020 ÆConstruction and expansion of local hubs to meet demand for shorter international flights Capital Area Busan Daegu Central Honam Yeongdong JejuGimhaeAirport new runway andinternational passenger terminal CheungjuAirport enhancement through foundation construction YangyangNew Airport construction GimpoAirport upgrade and use as main domestic hub DaeguAirport new mooring field and international passenger terminal MuanNew Airport construction JejuAirport major facility expansion to handle international tourists
KRIHSKRIHS
ÆExpansion of local airports Ulsan, Sacheon, Pohang, Yecheon, Yeosu, etc. airport expansions Current feasibility study on demand for Cheonju Airport, construction of light plane airfield at Uljin ÆDevelopment of short and medium-haul routes for small and medium planes, helicopters to enhance intercity transport, coastal tourism ÆExpansion of flight and air traffic control functions, and major overhaul of flight safety ÆPlanning to enhance facility convenience
Key Local airport Hub airport Main airport New airport
KRIHSKRIHS
Airport Map
KRIHSKRIHS
Logistics
Æ“National hubs => Local hubs => Consumer” network construction(Hub& Spoke) ÆBuilding of key national logistics hubs Capital Area, Busanand GwangyangPorts are national logistic hubs : Expand ICDsand integrated cargo terminals, cargo handling facilities Central·Yeongnam·Honaminland hub expansions ÆConstruction of inland ~ coastal network Logistics center network of 10 regions, 38 hubs Competing, complementing ICDsand integrated cargo terminalsKRIHSKRIHS
ÆLinking of hub ports and hub airports to handle Northeast Asia traffic through Sea- Air integrated transport system IncheonPort & Airport, BusanPort ~ Gimhae Airport, etc. ÆInformatization, modernization of logistics industry Reduction of logistics costs from 16.5% of GDP to developed country level of 10% by 2020
Key Main facility Logistics center
KRIHSKRIHS
Logistics Facilities Map
KRIHSKRIHS
Transportation network supporting development strategy for new territorial axes, balanced regional development, etc.
ÆConstruction of road network linking major transport hubs to spur local development ÆActive support of regional development plans ÆCreation of East -West transport network East -West hubs, East -West coastal linkages Wonju~ Gangneungrail line, E-W axes of 7 x 9 road networkA transport network to lead regional development
KRIHSKRIHS
Local cultural and nature development
ÆImproved access to historical, tourist, traditional, cultural sites ÆSouthwest coast islands development through bridges, rail lines, heli-pad, etc. Strategic industrial area support
ÆTransport network system enhancement for Special Economic Zones ÆSupport for transport facilities to promote development of disadvantaged regionsKRIHSKRIHS
Road and rail enhancement plans
ÆMajor increase in high-speed transport capacity for large cities through construction of circulatory expressways, arterial road lattice networks ÆIncrease in urban railway capacity through introduction of diverse services such as express trainsA better transport system to reflect metropolitan growth of large cities
KRIHSKRIHS
New facilities to handle transfer demand
ÆIncrease in construction of transfer parking lots and integrated transfer centers More effective implementation system through metro traffic administration
ÆCooperative systems with neighboring local governments ÆStrengthening of countermeasures for facilities that greatly increase traffic demandKRIHSKRIHS
3) International transport infrastructure to become “Gateway to Northeast Asia ” Cultivation of Incheon International Airport as central NE Asia airport
ÆDevelopment of Incheon’sintegrated port, IT, logistics, business and leisure facilities Large-scale container port development
ÆBusan~ Gwangyangports developed into central ports for NE Asia Plan for NE Asia-linked rail network
Æ2 N-S (Mokpo-Seoul-Shinuiju, Busan-Seoul- Cheongjin) routes linked to TCR, TSR, TARKRIHSKRIHS
Russia China Japan The Pacific
Road network expansion for N-E relations
ÆPriority connection of 6 severed National Roads including #1 (Freedom Bridge - Panmunjeom) and #7 (Goseong-Hyujeonseon) ÆEventual plan for 7 North-South arterial roads, connection to Asian Highway Coastal transport network with NK ports
ÆInternational marine transport network with main ports of neighbors such as Russia, ChinaKRIHSKRIHS
Long-term plans to become sea and land- linked transport center of NE Asia
HLogistics center for Europe (pop. 320 million) HRotterdam Port (containers), SchipholAirport (passenger and cargo) connect to roads, rail, coastal and inland transport to all parts of Europe H20% of cargo is transit cargo to England and Scandinavia, 80% is imports to continental EuropeNetherlands: European Gateway
KRIHSKRIHS
NE Asia Logistics Center Plan
KRIHSKRIHS
4) Safety -oriented, environment-friendly facilities Traffic systems to raise citizen safety
ÆHighest priority consideration for safety in planning transport systems ÆDesignation of hazardous material transport prohibited zones, transport guidelines ÆDevelopment of emergency disaster relief systemsKRIHSKRIHS
Transport policy for elderly, less mobile
ÆDevelopment of new systems such as traffic information facilities for older drivers ÆExpanded facilities such as crosswalks, elevators for handicapped and elderly Environment-friendly traffic systems
ÆConsideration of environment, scenery, bio aspect when constructing roads, railroads ÆPollution reduction through increased use of railroads, development of cleaner fuels, etc. ÆLong-term strengthening of pollution discharge standards through new Clean Air ActKRIHSKRIHS
Stronger traffic demand management
ÆShort-term policy reduction of passenger car use through traffic taxes, congestion fees, etc. ÆPublic transportation-centered system Expansion of high-speed transport alternatives to reduce passenger car use Support for “green”transport (e.g. bicycles) for short trips ÆIn the long-run, minimize daily traffic by city land use plan, etc.KRIHSKRIHS
5) Lower-cost transport network to increase investment efficiency Transport technology R&D and support
ÆRoad use maximization through informatization of transport facilities, maintenance cost minimization through ITS ÆStandardization of traffic information ÆSupport and development of Korean high- speed trains, maritime traffic control system, satellite navigation systemsKRIHSKRIHS
Transport facility investment efficiency
ÆIntegrated investment management Unify government facility investment plans for each mode of transport Investment priortizedconsidering both efficiency and balanced regional growth ÆRaising effectiveness of facility investment Preparation of investment priority evaluation and fund allocation systems for project selection Focus on investment offering largest benefits Evaluation and consideration of current project results in fund allocation processKRIHSKRIHS
ÆResearch into expanded financing methods such as gasoline taxes, adjusted user fees, privatization, construction cost savings, etc.
Total Investment ( %)344 (100.0)
Mode of TransportRoadRailAirPortLogisticsTotal 196 (57.1)73 (21.3)16 (4.5)38 (11.1)20 (6.0) >Including operation, maintenance, R&D, etc., total projected KRW 378 trillion (~2.6% of GDP) >Government contributions under KDI growth projections amount to KRW 344 trillion, with the balance to come from increased budgetary effort or private investment
<Table> Projected Investment Demands for 4th Plan (2000-2020) Unit: KRW trillion
KRIHSKRIHS
Transport restructuring, privatization
ÆIntroduction of private sector creativity, efficiency into transport facilities Partial privatization policy of government construction, private sector operation, administration and maintenance In some cases, full privatization through sale ÆRegulatory reform, deregulation Introduction of fair competitive systems by removing regulatory barriers to promotion of private participation, market entrance of new industries, price and service standardsKRIHSKRIHS
ÆAttraction of private capital Priority study of private capital for high-profit projects Active promotion of private investment for roads, metro subways, hub airports, port facilities, public transportation, etc. Establishment of bidding, concession systems incorporating international best practice
•Seamless transport system with rational traffic partitioning •Nationwide interconnected transport network •International transport infrastructure to become “Gateway to NE Asia” •People-centered, environment- friendly policy •Lower cost models to increase investment efficiency
•Seamless transport system with rational traffic partitioning •Nationwide interconnected transport network •International transport infrastructure to become “Gateway to NE Asia” •People-centered, environment- friendly policy •Lower cost models to increase investment efficiency ROK, Korean Peninsula, NE Asia ROK, Korean Peninsula, NE Asia Supply, safety, environment, efficiency Supply, safety, environment, efficiency Traffic·Logistics/ IT Traffic·Logistics/ IT
44thth
National Territorial PlanNational Territorial Plan
““GlobalGlobal
--villagevillage
””--
integrated integrated
transportation networktransportation network
•Decentralization and enhanced quality of life through traffic system •Support for constant economic growth and reduction of bottlenecks through facility expansion •Faster, standardized transport to increase transport efficiency and prepare for globalization
•Decentralization and enhanced quality of life through traffic system •Support for constant economic growth and reduction of bottlenecks through facility expansion •Faster, standardized transport to increase transport efficiency and prepare for globalization Primarily South Korea Primarily South Korea Supply, efficiency, demand control Supply, efficiency, demand control Traffic / Logistics / IT Traffic / Logistics / IT
Comprehensive highComprehensive high
--speedspeed
transportation networktransportation network
rd National Territorial Plan33rd National Territorial Plan
SubjectSubject
GeographyGeography
GeneralGeneral DirectionDirection StrengthsStrengths
CompositionComposition
Comparison with 3rd Territorial Plan Comparison with 3rd Territorial Plan
KRIHSKRIHS