Jung
lim H
ahm
Wor
ld B
ank
Inst
itute
Por
t Ref
orm
for P
olic
y M
aker
s an
d P
ract
ition
ers
Bra
silia
Apr
il 1~
3, 2
008
Fina
ncia
l Im
plic
atio
n of
Por
t R
efor
m
Con
tent
s
1.Fi
nanc
ial i
mpl
icat
ion
to th
e pu
blic
sec
tor
2.Fi
nanc
ial i
mpl
icat
ion
to th
e pr
ivat
e se
ctor
3.R
isk
Man
agem
ent
4.Fi
nanc
ial A
naly
sis
Why
are
we
conc
erne
d w
ith th
e fin
anci
al
impl
icat
ion
of p
ort r
efor
m?
It’s
priv
ate
inve
stm
ent.
Why
the
publ
ic s
houl
d w
orry
??
1.O
ne o
f the
obj
ectiv
es o
f the
refo
rm –
To c
reat
e fis
cal
spac
e2.
Pub
lic s
uppo
rt3.
Pub
lic c
omm
itmen
t-Not
eas
y to
can
cel
4.O
nce
done
, not
eas
y to
redo
–C
ost m
oney
.5.
Fisc
al im
pact
-> ta
x pa
yers
’mon
ey6.
Any
unn
eces
sary
risk
to th
e pr
ivat
e se
ctor
com
es
back
to th
e us
er
Driv
er 1
: Cre
atin
g Fi
scal
Spa
ce
800
mill
ion
US
D
800
mill
ion
US
D
1 P
PP
Por
t20
0 m
il U
SD
100
Sch
ools
200
mil
US
D
Pub
lic
hous
ing
200
mil
US
D
Soc
ial w
elfa
re20
0 m
il U
SD
Driv
er 2
: Effi
cien
cy
•W
orki
ng w
ith th
e pr
ivat
e pr
oved
to b
e m
ore
on
budg
et a
nd m
ore
on ti
me.
–U
K •P
PP
: 80%
on
time
79%
on
budg
et
•C
onve
ntio
nal:
70%
tim
e ov
erru
n &
70%
cos
t ove
rrun
–S
outh
Afri
ca•
3 to
ll ro
ads,
two
pris
ons,
thre
e ho
spita
ls: A
ll on
tim
e &
on
budg
et•
Con
vent
iona
l: 17
% ti
me
over
run
& 2
1 %
cos
t ove
rrun
(199
0~20
00)
Driv
er 2
: Effi
cien
cy
Con
cess
ion
L/A
EPC
con
tract
s
Deb
t Fin
anci
ngD
ebt F
inan
cing
Civ
il C
ontr
acto
r &
E&
M C
ontr
acto
r
Civ
il C
ontr
acto
r &
E&
M C
ontr
acto
r
Fina
ncia
l In
vest
ors
Fina
ncia
l In
vest
ors
Advisors
•Traffic
•Financial
•Legal
•Insurance
•Technical
Advisors
•Traffic
•Financial
•Legal
•Insurance
•Technical
Gov
’tG
ov’t
SPV
SPV
Shar
ehol
ders
Agr
eem
ent
Spon
sors
Spon
sors
O&
M c
ontr
acto
rO
&M
con
trac
tor
O&
M
cont
ract
Driv
er 3
: Off-
bala
nce
treat
men
t
•N
o cl
ear i
nter
natio
nal g
uide
line
on a
ccou
ntin
g th
e P
PI
•U
sual
ly tr
eate
d as
off-
bala
nce
to th
e go
vern
men
t•
Not
a h
ealth
y dr
iver
-why
?
Issu
e 1-
Rep
ortin
g
•Th
ough
PP
Ps
do n
ot h
ave
publ
ic b
orro
win
g th
at re
quire
re
porti
ng, m
any
cont
ract
ual f
orm
s of
PP
P c
reat
e de
bt-
like
stru
ctur
es
•C
ontin
gent
liab
ilitie
s of
ten
not r
epor
ted
•W
hen
repo
rting
con
tinge
nt li
abili
ties,
for t
rans
pare
ncy,
it
is im
porta
nt to
pro
vide
det
ails
on
met
hodo
logy
of
calc
ulat
ion
and
inpu
ts, r
epor
t on
full
rang
e of
obl
igat
ions
•P
ublic
acc
ess
to c
ontra
cts
(orig
inal
and
as
rene
gotia
ted)
w
ould
als
o be
impo
rtant
Issu
e 1-
Rep
ortin
g
•E
uros
tat
–A
sset
s in
volv
ed in
PP
P s
houl
d be
def
ined
as
non-
gove
rnm
ent a
sset
s if
the
priv
ate
partn
er ta
kes
the
cons
truct
ion
risk
and
at le
ast o
ne o
f the
ava
ilabi
lity
risk
and
the
dem
and
risk
•A
vaila
bilit
y ris
k : P
rivat
e pa
rtner
failin
g to
pro
vide
the
agre
ed
volu
me
and
serv
ice
•D
eman
d ris
k : C
hang
es in
ser
vice
dem
and
caus
ed b
y th
e bu
sine
ss c
ycle
, mar
ket t
rend
s, c
ompe
titio
n or
tech
nolo
gica
l ob
sole
scen
ce
Issu
e 1-
Rep
ortin
g
•IM
F
–A
n al
tern
ativ
e ac
coun
ting
and
repo
rting
app
roac
h w
ould
be
to re
cord
PP
P a
sset
s on
priv
ate
sect
or
bala
nce
shee
ts, c
onsi
sten
t with
lega
l ow
ners
hip.
–Th
e fis
cal c
osts
and
risk
s as
soci
ated
with
PP
Ps
wou
ld th
en b
e as
sess
ed, q
uant
ified
, and
dis
clos
ed.
–It
is u
ncle
ar w
hat a
ppro
ach
will
be
take
n in
fo
rmul
atin
g a
gene
ral a
ccou
ntin
g an
d re
porti
ng
stan
dard
for P
PP
s.–
In th
e m
eant
ime,
PP
P c
osts
and
risk
s sh
ould
be
take
n in
to a
ccou
nt w
hen
asse
ssin
g de
bt s
usta
inab
ility
.
Issu
e 2-
Pub
lic in
vest
men
t
•10
0% p
rivat
e in
vest
men
t inv
olve
s–
Pub
lic in
vest
men
t for
infra
stru
ctur
e–
Opp
ortu
nity
cos
t of p
ublic
ass
ets
–O
ppor
tuni
ty c
ost o
f the
hum
an re
sour
ce–
Pos
sibl
e fin
anci
al c
ost i
n th
e fu
ture
Issu
e 3
–C
ance
llatio
n or
bai
lout
?
•Ve
ry L
ow In
cide
nce
of C
ance
lled
Con
cess
ions
…•
Tota
l Wor
ld
Infra
stru
ctur
e P
PI P
roje
cts
Can
celle
dP
erce
ntag
e
2,48
548
Com
posi
tion
19ro
ads
9 en
ergy
7 w
ater
& s
anita
tion
8 te
leco
m
2.1%
By
Sec
tor
5.8%
3.5%
Sour
ce:
Har
ris (2
002)
Issu
e 3
–C
ance
llatio
n or
bai
lout
?
Ren
egot
iate
d co
nces
sion
sA
vera
ge ti
me
to
rene
gotia
tion
All
sect
ors
42%
2.1
year
s
Ele
ctric
ity10
%2.
3 ye
ars
Tran
spor
t57
%3.
1 ye
ars
Wat
er75
%1.
7 ye
ars
Latin A
mer
ica
(1988~
2001)
Sourc
e: G
uas
ch (
2004)
Aw
ard
proc
ess
Tele
com
Ene
rgy
Tran
spor
tW
ater
and
S
anita
tion
Tota
lS
hare
of T
otal
Com
petit
ive
Bidd
ing
245
9523
112
569
678
(45%
re
nego
tiate
d)D
irect
ad
judi
catio
n15
143
374
199
22 (8%
re
nego
tiate
d)To
tal
260
238
268
129
895
100
Sourc
e: G
uas
ch (
2004)
Latin A
mer
ica
(1988~
2001)
Issu
e 3
–C
ance
llatio
n or
bai
lout
?
Fina
ncia
l im
plic
atio
n to
the
priv
ate
sect
or
Sta
ble
long
-te
rm re
venu
e
De
fact
o m
onop
oly
Pub
licD
omai
n
•Pub
lic s
uppo
rt
•Pub
lic s
ervi
ce
•Leg
isla
tion
•Reg
ulat
ion
Fina
ncia
l im
plic
atio
n to
the
priv
ate
sect
or Cos
t Ris
k
Rev
enue
Ris
k
Pub
licD
omai
n
•Pub
lic s
uppo
rt
•Pub
lic s
ervi
ce
•Leg
isla
tion
•Reg
ulat
ion
Cos
t of r
egul
atio
n : C
ost r
isk
•Te
chni
cal r
egul
atio
n ha
ve a
n im
pact
on
the
initi
al e
stim
atio
n of
pro
ject
cos
t (in
vest
men
t and
op
erat
ion)
•R
easo
nabl
e to
exp
ect t
he o
pera
tor t
o as
sum
e th
e co
st ri
sk–
Pro
vide
d th
at
–R
ules
of t
he g
ame
are
esta
blis
hed
at th
e ou
tset
–Th
ese
rule
s ar
e cl
ear,
and
clea
r
Cos
t of r
egul
atio
n : C
ost r
isk
•C
ase
1-P
ort o
pera
tor’s
ser
vice
is n
ot re
gard
ed a
s a
publ
ic s
ervi
ce–
Deg
ree
of re
gula
tion
is lo
w–
Any
risk
ass
ocia
ted
with
the
regu
latio
n w
ill b
e re
flect
ed in
the
leve
l of r
etur
n–
Cos
t will
be
pass
ed o
n th
e cu
stom
ers
thro
ugh
incr
ease
in c
harg
e
•C
ase
2-P
ort o
pera
tor’s
ser
vice
is re
gard
ed a
s a
publ
ic
serv
ice
–D
egre
e of
regu
latio
n is
hig
h–
Diff
icul
t to
refle
ct in
the
char
ge–
Ris
k be
tter b
e sh
ared
bet
wee
n th
e co
nces
sion
aut
horit
y an
d th
e op
erat
or
Cos
t of r
egul
atio
n -R
even
ue ri
sk
•D
irect
impa
ct o
n th
e re
venu
e ris
k
•R
even
ue ri
sk is
the
prin
cipa
l ris
k in
volv
ed in
a p
ort
proj
ect d
ue to
the
unce
rtain
ty in
here
nt in
traf
fic a
nd
thro
ughp
ut le
vel p
redi
ctio
n.
–Tr
affic
risk
can
be
assi
gned
to th
e op
erat
or if
the
activ
ity is
not
a
publ
ic s
ervi
ce, a
nd is
sub
ject
to g
enui
ne c
ompe
titio
n–
Sha
ring
risk
is re
com
men
ded
for a
pub
lic s
ervi
ce m
onop
oly.
•H
igh
degr
ee o
f reg
ulat
ion
impo
se c
onst
rain
s on
the
oper
ator
•O
pera
tor h
as li
ttle
mea
ns to
man
age
the
com
mer
cial
risk
•S
till,
oper
ator
sill
take
the
cost
risk
Ris
k M
anag
emen
t•
Ris
k id
entif
icat
ion
•S
harin
g of
risk
s w
ith th
e po
rt au
thor
ity, t
he s
tate
or
oth
er p
ublic
aut
horit
ies
•S
harin
g of
risk
s w
ith p
artn
ers
(spo
nsor
s,
cust
omer
s, s
uppl
iers
, sub
cont
ract
ors)
•R
educ
tion
of e
xpos
ure
to th
e re
sidu
al ri
sk o
r the
pr
obab
ility
of i
ts o
ccur
renc
e•
Red
uctio
n or
lim
itatio
n of
the
cons
eque
nces
of
resi
dual
risk
s (e
x. in
sura
nce)
•A
djus
tmen
t of t
he e
xpec
ted
rate
of r
etur
n ac
cord
ing
to th
e de
gree
of r
esid
ual r
isk
Ris
k M
anag
emen
t•
Ris
k as
sess
men
t and
man
agem
ent i
s no
t the
sol
e re
spon
sibi
lity
of th
e op
erat
or.
•W
hile
the
oper
ator
will
sta
nd re
spon
sibl
e fo
r its
bus
ines
s pl
an•
Ris
k an
alys
is o
f con
cess
ion
auth
ority
is m
ore
impo
rtant
as
it w
ill d
eter
min
e th
e su
cces
s an
d th
e fa
ilure
of t
he
proj
ects
–R
educ
e th
e ris
k un
der t
he p
ublic
con
trol b
efor
e bi
ddin
g–
Con
side
r mor
e ris
k sh
arin
g op
tions
if ri
sks
are
not u
nder
the
priv
ate
sect
or c
ontro
l–
May
wan
t to
leve
rage
the
cata
lytic
role
of s
ubsi
dy, o
r inv
estm
ent
from
the
publ
ic–
The
conc
essi
on a
utho
rity
will
not
wan
t to
keep
all
risk
unde
r the
pu
blic
con
trol
Cou
ntry
risk
•R
isks
resu
lting
from
the
natio
nal a
nd in
tern
atio
nal
fram
ewor
k w
ithin
whi
ch th
e pr
ojec
ts m
ust o
pera
te
–Le
gal r
isk
•La
ck o
f pre
cisi
on in
the
legi
slat
ion
•P
ossi
bilit
y of
the
chan
ges
•C
hang
es in
the
envi
ronm
enta
l law
s ha
s pa
rticu
larly
sig
nific
ant
impa
ct–
Mon
etar
y ris
k•
Exc
hang
e ra
te fl
uctu
atio
ns•
Non
-con
verti
bilit
y of
the
loca
l cur
renc
y in
to fo
reig
n cu
rren
cies
•N
on-tr
ansf
erab
ility
Cou
ntry
risk
–E
cono
mic
risk
•V
olum
e of
trad
e de
pend
s on
the
mac
roec
onom
ic fa
ctor
s•
Larg
e im
pact
on
the
leve
l of a
ctiv
ity•
Mar
ket s
urve
y &
reas
onab
le p
lann
ing
–Fo
rce
maj
ure:
•
Nat
ural
dis
aste
r•
Ris
k of
war
–In
terfe
renc
e or
rest
rain
t of p
rice
risk
•In
the
nam
e of
pub
lic s
ervi
ce, p
rote
ctio
n of
use
rs•
Impo
sitio
n of
new
ope
ratin
g re
quire
men
ts•
Add
ition
al in
vest
men
t•
New
con
stra
ints
•S
hort
term
con
sequ
ence
vs
long
term
con
sequ
ence
Pol
itica
l ris
k
•N
on-c
ompl
ianc
e, e
xpro
pria
tion,
nat
iona
lizat
ion
•R
isk
miti
gatio
n th
roug
h co
ntra
ctua
l arr
ange
men
t ofte
n fo
und
insu
ffici
ent
•In
sura
nce
–MIG
A
•S
ome
stra
tegi
es to
con
side
r–
Incl
usio
n of
mul
tilat
eral
org
aniz
atio
n (n
ot a
form
al g
uara
ntee
)–
Incl
usio
n of
exp
ort c
redi
t age
ncie
s (a
ct a
s a
guar
anto
r dur
ing
the
loan
per
iod)
Pro
ject
risk
•R
isks
ass
ocia
ted
with
the
inve
stm
ent t
o an
d op
erat
ion
of p
roje
ct
•M
ajor
ity o
f pro
ject
risk
s ar
e ca
rrie
d by
the
oper
ator
–C
onst
ruct
ion
risk
•D
elay
s in
sta
rt-up
•Lo
ss o
f ear
ning
from
ope
ratio
n•
Incr
ease
d in
terim
inte
rest
cha
rges
•P
enal
ties
the
oper
ator
is o
blig
ed to
pay
Pro
ject
risk
–H
and-
over
risk
•Ta
king
ove
r of e
xist
ing
faci
lity
•R
etur
ning
faci
lity
upon
term
inat
ion
of c
once
ssio
n
–O
pera
ting
risk
•N
on-p
erfo
rman
ce (p
enal
ty fo
r low
traf
fic)
•O
pera
ting
cost
ove
rrun
•Lo
ss o
f rev
enue
(diff
icul
ty in
fee
colle
ctio
n, th
eft)
–P
rocu
rem
ent r
isk
•P
oten
tial u
nava
ilabi
lity
of g
oods
and
ser
vice
crit
ical
to th
e po
rt op
erat
ion
•S
elf-g
ener
atio
n/pr
oduc
tion
•Lo
ng-te
rm p
urch
ase
agre
emen
t
Pro
ject
risk
–Fi
nanc
ial r
isk:
Ris
ks a
ssoc
iate
d w
ith•
Rai
sing
sha
reho
lder
s' e
quity
•O
btai
ning
loan
s•
Sec
urin
g st
and-
by lo
ans
•Fo
rmat
ion
and
man
agem
ent o
f SP
V•
Inte
rest
rate
fluc
tuat
ion
•G
over
nmen
t’s fa
ilure
to p
ay s
ubsi
dy–
Reg
ulat
ory
risk:
the
cost
of r
egul
atio
n is
ul
timat
ely
born
e by
the
user
Ris
kR
isk
Allo
catio
n
Item
Des
crip
tion
/ Com
men
tsS
tate
Ope
rato
rS
hare
d
PLA
NN
ING
Pro
ject
Ap
prov
alS
tatu
tory
Con
sent
for P
roje
ctX
Infra
stru
ctur
eP
lann
ing
and
com
plet
ion
on ti
me
X
Ris
k M
atrix
(exa
mpl
e)
LEG
AL
Cha
nges
in
Law
Gen
eral
Cha
nge
in L
aw,
X
Dis
crim
inat
ory
Cha
nge
in L
awX
Ris
kR
isk
Allo
catio
n
Item
Des
crip
tion
/ Com
men
tsSt
ate
Ope
rato
rSh
ared
XR
espo
nsib
ility
for d
esig
n to
the
exte
nt th
at d
esig
n ha
s no
t alre
ady
been
und
erta
ken
for c
onse
nt p
roce
ssD
esig
n
XR
espo
nsib
ility
for a
ccur
acy
of d
esig
n da
taD
esig
n D
ata
XR
espo
nsib
ility
for s
ettin
g sp
ecifi
catio
n cr
iteria
Spec
ifica
tion
XR
espo
nsib
ility
for s
ettin
g st
anda
rds
Des
ign
Stan
dard
s
DES
IGN
Ris
k M
atrix
(exa
mpl
e)
Ris
kR
isk
Allo
catio
n
Item
Des
crip
tion
/ Com
men
tsSt
ate
Ope
rato
rSh
ared
XLa
bour
, Equ
ipm
ent a
nd M
ater
ials
requ
ired
for d
esig
n an
d co
nstru
ctio
n w
orks
Res
ourc
es
XA
dditi
onal
wor
ks
Add
ition
al W
orks
XC
hang
es to
des
ign
and
cons
truct
ion
requ
irem
ents
due
to n
ew
stan
dard
s C
hang
es
XC
ost o
ver-r
un ri
sk fo
r des
ign
and
Con
stru
ctio
n C
ost
XR
espo
nsib
ility
for c
onst
ruct
ion
Con
stru
ctio
n
CO
NST
RU
CTI
ON
Ris
k M
atrix
(exa
mpl
e)
Ris
kR
isk
Allo
catio
n
Item
Des
crip
tion
/ Com
men
tsSt
ate
Ope
rato
rSh
ared
XLa
bour
, Equ
ipm
ent a
nd M
ater
ials
to c
arry
out
wor
ksR
esou
rces
XA
dditi
onal
wor
ksA
dditi
onal
Wor
ks
XC
hang
es to
ope
ratio
n an
d m
aint
enan
ce s
tand
ards
and
sp
ecifi
catio
nsC
hang
es
XC
ost o
f car
ryin
g ou
t req
uire
d m
aint
enan
ce w
orks
C
ost
XR
espo
nsib
ility
for M
aint
enan
ce w
orks
M
aint
enan
ce
OPE
RA
TIO
N &
MA
INTE
NA
NC
E
Ris
k M
atrix
(exa
mpl
e)
Ris
kR
isk
Allo
catio
n
Item
Des
crip
tion
/ Com
men
tsSt
ate
Ope
rato
rSh
ared
GEN
ERA
L / O
THER
Qua
lity
Man
agem
entC
ompl
ianc
e w
ith q
ualit
y m
anag
emen
t sta
ndar
dsX
Forc
e M
ajeu
reTe
rmin
atio
n du
e to
Ter
roris
m, R
iots
, War
, Fru
stra
tion,
nat
ural
ca
tast
roph
es (e
arth
quak
e, fl
oodi
ng e
tc.)
X
Pro
test
or A
ctio
nX
Envi
ronm
enta
lR
isk
of e
nviro
nmen
tal i
mpa
ct a
nd a
ssoc
iate
d co
sts
of m
itiga
tion
X
Ris
k M
atrix
(exa
mpl
e)
Sourc
e: A
dopte
d f
rom
Snel
son
(2007)
FAQ
1: I
RR
leve
l 2000
2001
2002
2003
2004
2005
Num
. of P
roje
ct7
23
410
8R
eal
9.54
9.67
8.93
8.67
8.75
8.09
Nom
inal
14.9
515
.15
14.3
713
.83
13.9
711
.78
5Yr K
TB6.
927.
496.
084.
684.
574.
14
Num
. of P
roje
ct2
1-
14
2R
eal
9.56
8.90
-9.
508.
858.
24N
omin
al15
.04
14.3
5-
14.9
814
.29
10.9
45Y
r KTB
6.92
5.43
-4.
414.
434.
18
Rat
e of
R
etur
nPo
rt
Rat
e of
R
etur
nTo
tal
Sourc
e: R
hee
(2007)
FAQ
2: R
even
ue G
uran
tee
110% 90
%
Act
ual r
even
ue
Rev
enue
to th
epr
ivat
e pa
rtner
Rev
enue
shar
ing
Rev
enue
subs
idy
(Exp
ecte
d re
venu
e)10
0%
Tim
e sp
an(y
ears
in
oper
atio
n)
Tim
e sp
an(y
ears
in
oper
atio
n)
1-5
1-5
6-10
6-10
11-1
511
-15
Rev
enue
subs
idy
Rev
enue
subs
idy
90%
90%
80%
80%
70%
70%
Rev
enue
shar
ing
Rev
enue
shar
ing
110%
110%
120%
120%
130%
130%
Thre
shol
d fo
rTh
resh
old
for
Sol
icite
dS
olic
ited
Tim
e sp
an(y
ears
inop
erat
ion)
Tim
e sp
an(y
ears
inop
erat
ion)
1-5
1-5
6-10
6-10
11-1
511
-15
Rev
enue
subs
idy
Rev
enue
subs
idy
80%
80%
70%
70%
60%
60%
Rev
enue
shar
ing
Rev
enue
shar
ing
120%
120%
130%
130%
140%
140%
Thre
shol
d fo
rTh
resh
old
for
Un-
solic
ited
Un-
solic
ited
Not
e: M
RG
is n
ot a
pplie
d w
ith th
e ac
tual
re
venu
e fa
lls b
elow
50
of fo
reca
sts.
Sourc
e: K
im (
2006)
& P
IMAC
Cla
ssifi
catio
n20
0120
0220
0320
0420
05
agre
emen
tvs
. tra
ffic
volu
me
46.9
%44
.6%
41%
41%
52.8
%
Rev
enue
sub
sidy
1,06
382
31,
050
1,11
476
7
agre
emen
tvs
. tra
ffic
volu
me
--
47.0
%52
.2%
-
Rev
enue
sub
sidy
--
404
386
390
agre
emen
tvs
. tra
ffic
volu
me
55.9
%65
.3%
62.9
%62
.2%
-
Rev
enue
sub
sidy
6847
6369
-
agre
emen
tvs
. tra
ffic
volu
me
--
Rev
enue
sub
sidy
8-
New
Mok
po O
utpo
rt
Gw
angj
u2n
d B
eltw
ay,
Sec
tion
1: 8
5% g
uara
ntee
d ov
er 2
8 ye
ars
(Ope
rate
d si
nce
Nov
. 29,
20
00)
Che
onan
-Non
san
Exp
ress
way
: 82%
gua
rant
eed
over
20
year
s (O
pera
ted
sinc
e D
ec. 2
3,
2002
)
Inch
eon
Intl.
Airp
ort
Exp
ress
way
: 80%
gua
rant
eed
over
20
year
s(O
pera
ted
sinc
e N
ov. 2
1,
2000
)
Sourc
e: K
im (
2006)
& P
IMAC
Rev
enue
gua
rant
ee: P
aym
ent c
an b
e ve
ry la
rge
(uni
t: 10
0 m
illion
KR
W, %
)
050100
150
200
250
300 20
01
2003
2005
2007
2009
2011
2013
2015
2017
2019
Yea
r
Billion 1999 won
Fore
cast
reve
nue
Gua
rant
eed
reve
nue
Act
ual r
even
ueSourc
e: I
rwin
(2004)
•Pay
men
t is
hard
to m
easu
re…
.
FAQ
2: R
even
ue G
uara
ntee
Janu
ary
1999
Janu
ary
2006
Solic
ited
Un-
solic
ited
Sol
icite
dU
nsol
icite
d
Per
iod
Who
le o
pera
ting
perio
d15
Yea
rs10
yea
rs
Gua
rant
ee90
% o
r le
ss80
% o
r le
ss
Firs
t 5 y
ears
90%
Nex
t 5 Y
ears
80%
Last
5 Y
ears
70%
Firs
t 5 Y
ears
75
%N
ext 5
Yea
rs
65%
Con
ditio
nN
one
No
MR
GIf
Act
ual R
even
ue
< 50
% o
f Pro
ject
ed
Rev
enue
Sam
e as
Lef
t
Abo
lishe
d
May
200
3
FAQ
2: R
even
ue G
uara
ntee
Sourc
e: K
im (
2008)
•Onc
e se
t-up,
har
d to
redu
ce.
•If s
uppo
rt is
nee
ded,
sub
sidy
cou
ld b
e a
bette
r ide
a.