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Dong-Wook SongDong-Wook Song Sung-Woo LeeSung-Woo Lee

University of Hong KongUniversity of Hong Kong Korea Maritime InstituteKorea Maritime Institute

An Assessment ofAn Assessment ofKOREAN PORT GOVERNANCEKOREAN PORT GOVERNANCE

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World Container PortsWorld Container Ports

KOREAKOREA

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Major Korean PortsMajor Korean Ports

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Total 51 PortsTotal 51 Ports

28 International Trading Ports

9 Container ports

2 main container ports (Busan & Gwangyang)

17 General Ports

23 Local Ports Engaged in domestic trading and fishery

Korean PortsKorean Ports

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BusanBusan PortPort

Busan PortBusan New Port

Container Port

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GwangyangGwangyang PortPort

Gwangyang Port

Container Port

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Container Traffic in KoreaContainer Traffic in Korea

Container Cargo Throughputs in 2002

Busan 79.5 %

Others 4.9 %Gwangyang 9.1 %

Incheon 6.5 %

Percentage as of 2003Percentage as of 2003

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Ministry of Maritime Affairs and Fisheries (MOMAF)Ministry of Maritime Affairs and Fisheries (MOMAF)

12 Local Branches of MOMAF controlling 50 ports

BusanBusan became independent in 2003became independent in 2003

Controlled by the Busan Port Authority (BPA)

Independence ofIndependence ofGwangyangGwangyang andand IncheonIncheon underunder

discussiondiscussion Incheon is likely to be independent in 2005

Port Administration in KoreaPort Administration in Korea

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Korean Port Administration in HistoryKorean Port Administration in History

Management and development of Busans container ports Independent Corporation under the Port Authority Law

Current Busan and New container ports

BusanBusan PortPortAuthorityAuthority

(BPA)(BPA)

2003

Port management and development

Central government

Expanded to the Ministry Level (from KMPA to MOMAF)

Ministry ofMinistry of

Maritime of AffairMaritime of Affair

and Fisheriesand Fisheries

(MOMAF)(MOMAF)

1996

Operating and managing container ports in Korea

Under central government

Management and development of container port for KMPA

Korea ContainerKorea Container

Terminal AuthorityTerminal Authority

(KCTA)(KCTA)

1989

Renamed from Korea Port Authority in 1977

Under central government

Port management and development

Korea Maritime andKorea Maritime and

Port AdministrationPort Administration

(KMPA)(KMPA)

1976

Main ContentMain ContentOrganisationOrganisationYearYear

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Port Administration in KoreaPort Administration in Korea (except Busan)(except Busan)

MOMAFMOMAF

Real owner of container terminal and facilities

Local KMPAsLocal KMPAs

Regulator of container terminals

Management of general ports

Lessor of container terminals

Port Policy Committee & Board

KCTAKCTA

Corporation without capital Lessor of container terminals Container terminal development

Ulsan Port (Ulsan Container Terminal, Dongbang)

Pyengtaek Port (Pyengtaek Port Co.)

Other Ports (Small and medium size private companies)

Gwangyang Port- 1 Phase: Hanjin, Shebang,

Korea Express, Hutchison

- 2 Phase: KIT, Dongbu

Operated and Managed by Private companiesOperated and Managed by Private companies

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Port Administration in BusanPort Administration in Busan (before 2003)(before 2003)

MOMAFMOMAF

Real owner of container terminal and facilities

Busan KMPABusan KMPA Regulator of container terminal in Busan

Management of general ports in Busan

Port Policy Committee & Board

KCTAKCTA Corporation without capital Lessor of container terminals

Jasungdea container terminal (Hutchison)

Shinseondae container terminal (PECT- Private Limited Company)

Gamman container terminal (Global/Shebang, Hanjin, Korea Express, Hutchison) New-Gamman container terminal (DPCT - Private Limited Company)

Uam container terminal (UTC - Private Limited Company)

Gamchun container terminal (Hanjin)

Operated and Managed by Private companiesOperated and Managed by Private companies

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Port Administration in BusanPort Administration in Busan (after 2003)(after 2003)

Port Policy Committee & Board

BPABPA

Corporation with capital

Real owner of container terminal and facilities

Lessor of container terminals

Jasungdea container terminal (Hutchison)

Shinseondae container terminal (PECT- Private Limited Company) Gamman container terminal (Global, Hanjin, Korea Express, Hutchison)

New-Gamman container terminal (DPCT - Private Limited Company)

Uam container terminal (UTC - Private Limited Company)

Gamchun container terminal (Hanjin)

Operated and Managed by Private companiesOperated and Managed by Private companies

MOMAFMOMAF

Regulator of overall container terminal

Management of general ports

Busan KMPABusan KMPA

Regulator of container terminals in Busan

Management of general ports in Busan

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Korea Container Terminal Authority (KCTA)Korea Container Terminal Authority (KCTA)

Established in 1990

Aims to enhance the national economy through

efficient development, management and operations

of container terminals

Coverage: 12 terminals in 5 ports

From 2004, according to the Port Authority Law,

KCTA turned Busan over to BPA.

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Busan Port Authority (BPA)Busan Port Authority (BPA)

Established in 2003 under the Port Authority Law and

commenced in 2004

Aims to apply private spirit to port management and

development in Busan

Coverage: the existing container terminals and future

ones in Busan

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Port Administration &Port Administration & OwnershipOwnershipA Conceptual Model

Port Models

Port Functions

Regulator Landowner Operator

PUBLIC Public Public Public

PUBLIC /private Public Public Private

PRIVATE /public Public Private Private

PRIVATE Private Private Private

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Port Administration &Port Administration & OwnershipOwnershipThe Case of Busan Port

Port Models

Port Functions

Regulator Landowner Operator

PUBLIC Public Public Public

PUBLIC /private Public Public Private

PRIVATE /publicPublic Private Private

PRIVATE Private Private Private

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Port Administration &Port Administration & OwnershipOwnership

The Case of Gwangyang Port

Port Models

Port Functions

Regulator Landowner Operator

PUBLIC Public Public Public

PUBLIC /private Public Public Private

PRIVATE /public Public Private Private

PRIVATE Private Private Private

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ConclusionConclusion

Private business mind is in place at Korean port

sector.

Korea has tried to attract overseas investors but

achieved only limited success.

Mixed private and public hands are existed; thus,

inevitably creating a co-ordination problem.

At the same time, the public side becomes more

complex; is it a way to make the port efficient or

inefficient due to the unnecessary bureaucracy?