Contents

1

Importance of Port in Korea

Overseas Port Development of Korea

Cooperation with ADB

Port Development in Korea

Contents

2

Importance of Port in Korea

1. Importance of Port in Korea

3

64 72 78 86 95 98 114

143 192

236 270

316 338 372

436

531 573

532

358

462

534 505

576

644

722

845

951

1,049

931

834

1,015

1,115 1,129

0

200

400

600

800

1,000

1,200

(Unit: billion dollar)

GDP

CAGR: 14

.6%

CAGR: 4.9%

Korea had enjoyed the world's fastest growing economies from the early 1980s to the late 2000s

Korea had been ranked world top 15th in terms of the size of nominal GDP in 2012

The trade dependence of Koreas economy is constantly rising from 45.6% to 94.5%(CAGR 4.1%p between 1994 and 2012)

Also, 99.7% of the international traffic volume was handled thru the port in 2012

4

1. Importance of Port in Korea

45.6 49.0 48.9

52.8

63.0 57.1

62.4 57.8

54.6 57.9

66.2 64.6 66.8 69.4

92.1

82.3 87.9

96.9 94.5

0.0

20.0

40.0

60.0

80.0

100.0

120.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

(Unit: %)

Shipping Aviation dependence upon foreign trade

In order to keep the economy growth through trade, port is the key logistics node in Korea

Total port throughputs and GDP are highly correlated as 0.98 Total volume increased 8.2% annually from 99 million tons in 1981 to 947 million tons

in 2012

5

1. Importance of Port in Korea

98,952

241,496

517,210

946,775

0

200

400

600

800

1,000

1,200

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

(Unit: thousand ton, billlion dollar)

Total volume(except liquid bulk) Cargo Handling capacity GDP

Pyeongtaek Port (West)

Busan New Port (Phase1-1) Kwangyang Port (Jungma)

Busan New Port (Phase 2-3)

6

1. Importance of Port in Korea Through sustainable port development, Korea has gained added value and vari

ous efficiency gains Container throughput increased 10.4% annually from 2.5 million TEUs in 1990 to 22.6

million TEUs in 2012 Container handling capacity increased 13.3% annually from 1.46 million TEUs in 1990

to 22.9 million TEUs in 2012

2,544

4,918

9,116

15,216

19,369

22,550

1,460 2,420

7,118

10,473

21,268 22,960

0

2000

4000

6000

8000

10000

12000

0

5,000

10,000

15,000

20,000

25,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

(Unit: Thousand TEU)

container throughput Container Handling capacity GDP

7

1. Importance of Port in Korea The share of container transshipment volume out of the total container throughp

uts reached 37.7% in 2012 compared to 5.9% in 1990 Transshipment is the high value added logistics activity that values more than 1 billion

dollars(US$) per annum

2,393

14,052

151

8,498

-

5,000

10,000

15,000

20,000

25,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

(Unit: Thousand TEU)

import/export transshipment

CAGR: 20.1

%(transshipm

ent)

8

1. Importance of Port in Korea

Port is the key infrastructure to increase the efficiencies of international trading and Nations economic growth

67Dollars as GDP per capita Beneficiary Country of Economic Assist

ance

22,708 Dollars as GDP per capita Become a member of OECD DAC(2009)

Hold the G20 Summit(2010) Reached over 1 trillion dollars as trade val

ue for the last 3 years

Port Development

Contents

9

Port Development in Korea

10

2. Port Development in Korea Port Master Plan of Korea It is a National Master Plan for Port Development Planned every ten years and modified each 5 years

Currently, 3rd Port Master Plan is applying until 2020

STAGE1: Designing Ma

ster Plan

STAGE2: Establishing M

aster Plan

STAGE3: Confirming M

aster Plan

Emerging needs for Port Development and Planning Increased demands for ports Changes in shipping patterns (Increase of container usage) Requests port development from Local residents and related agencies Needs on Port development and basic plan writing

Master Plan and Feasibility study Cargo Throughput Estimation, Site Selection, Technical Feasibility Study, Economic Feasibilit

y Study, etc.

Establish Port Master Plan(Minister approval) and consult with related agencies Review and apply comments and discussions, confirm master plan Consideration and decision of National Port Policy Council Port Master Plan confirmation notice

[Planning Process of Port Master Plan]

11

2. Port Development in Korea The Port Master Plan is being set up and promoted after considering the port logist

ics environment and the environment in the future as well International logistics center, global port Approachable Water-Friendly Port Balanced development of regional port Conversion from passive demand-met type to active demand-creative type Sustainable port development and management

Waterfront related to city function

Green Port low carbon green port

See Sightseeing Infra

Multi Functional Port (Quality Growth Strategy)

Import/Export Cargo Simple Transshipme

nt Cargo High Value added Tr

ansshipment

Cargo Handling Port (Quantity Growth Strategy)

Port Hinterland Complex

Hinterland Industrial Complex

Logistics Port (Quality Growth Strategy)

Efficient usage of port spa

ce

Create volume, high competitiv

-eness

[Paradigm Change of Port Policy]

2. Port Development in Korea

12

Promote the investments by private sector in Port development Since the IMF crisis in 1998, switched to private investment projects Regulated by Private Investment Law All kinds of Private investment can be applied

BTO, BTL, BOT, BOO, etc. From 2003 and 2011, the cumulated investment on port development by private sector acc

ounted 78.1 billion dollars

Government

Construction Company (Design + Construction)

Financial Sector

Operator (Maintenance/Operation)

Investment

Investment

Construction Investment/Loan

Dividend/ Principle &Interest

Give an authority to operate

Transfer the Ownership of Facility

Give an authority to manage & operate

13

2. Port Development in Korea

Target Business Appointed by Government

Notification of Basic Plan of the Target Development by Government

Submission of Business Plan by Private Sector

Review, Evaluation and Selection of Preferred Bidders by Evaluation Body and Government

Negotiation between Government and Preferred Bidder

Conclude the Practical Agreement and Appoint the Business Contractor

Application for the Approval of the Practical Business Plan

Approval of the Practical Business Plan

Confirmation of Construction Completion

[Government Notified Project Case] Procedures for Private Investment

2. Port Development in Korea

14

[Private Proposed Project Case]Submission of Proposal(Private Government)

Request the Review of Proposal(Government Public Private Infrastructure Investment Management Center)

Report the Review Opinion(Government Public Private Infrastructure Investment Management Center)

Public Notification for 3rd partys Proposal

Appoint the Proposer as the Preferred Bidder Review and Evaluate the Proposals

Appoint the Preferred Bidder

Negotiate & Appoint the Business Contractor

Procedures for Private Investment

No Yes

Approve the Practical Business Plan

Confirmation of Construction Completion

2. Port Development in Korea

15

Incheon port -Steel pier(3) -Multipurpose-berth(phase 2-1)

Pyeongtaek port -inner ease pier -Grain pier - International Ferry Terminal

Gunsan port -Gerneral cargo pier

Mokpo port -Multipurpose-berth(phase 1-1,1-2)

Gwangyang port -Container terminal (phase 3-3)

Masan port -Multipurpose-berth(phase 1-1)

Busan new port -Container terminal (phase 1, 2-3,2-4) - Hinterland Road

Ulsan new port -Container terminal (phase 1-1)

Pohang youngilman new port -Container terminal (phase 1-1)

[Busan New Port][Major Private Investments on Port]

Contents

16

Overseas Port Development of Korea

17

3. International Cooperation Project on Overseas Port Development

Based on the experience of port development and economic growth, the international cooperation projects on overseas port development has been implementing since 2008 Aim to share the experience and knowledge with developing countries and improve t

he national image

Ministry of Oceans and Fisheries

Aid the feasibility studies of port development master plan

EDCF loan support of non-profit facility project

Provide a training program to the public officers related to port and logistics departments

18

Since 2008, 13 international cooperation projects were carried out Currently, 4 projects are on going over the world

3. International Cooperation Project on Overseas Port Development

19

Project Procedures

3. International Cooperation Project on Overseas Port Development

Discuss recruiting investors, loan support, KOICA support after determining the Project Promotion Methods based on the result of feasibility study

Give Initiation Report of the Task Performance Plan, gather opinions through business meetings, final report to local government

Open a public competitive bidding to Korean engineering companies for making Feasibility study and Port Master Plan for the target port

Verify cooperative intentions through Exchange of Formal diplomatic letters, High-level interviews and set the range of cooperation

Prepare grounds to support Port Development cooperation between bilateral maritime departments by concluding a MOU

Prior Consultation

Conclude MOU

Order & Perform Tasks

Business Conference

Commercialization

20

To increase efficiency and effectiveness of the project, the Korean governmen

t is planning to

Establish an institute named as International Cooperation Project Manag

ement Center

Develop an Evaluation Tool for two steps(pre & post)

Diversify the method to find a project

Especially, through with ASEAN, UNDP, MDB(ADB, AFDB, IBRD

), etc.

Expand the types of project from port development to port operation,

disaster prevention facilities, ocean plants, planning & designing, et

c.

Open a regular training program

3. International Cooperation Project on Overseas Port Development

21

Korea-Philippines Cooperation Project Case

Project Overview

Project Results

1

3

Project Finding 2

Project period : 2011. 10 ~ 2012. 12 Project Objectives : Port Development Plan & Feasibility of the modernizatio

n of two ports(Iloilo and Cagayan de Oro)

Request intergovernmental cooperation through the Korea-ASEAN meeting

Cagayan de Oro (2030 basis) Traffic: containers (6.7 million TEU), General (762 tons), passengers (21

2 million) Development Scale: 5 berth & facility improvements Total Project Cost: Approximately 133 million(US$)

Iloilo (2030 basis) Traffic: containers (8.8 million TEU), General (736 tons), passengers (149 mil

lion) Development Scale: 3 berths & facility improvements Total Project Cost: 48million dollar(US$)

3. International Cooperation Project on Overseas Port Development

22

Korea-Philippines Cooperation Project Case [Location of Target Ports] [Proposed Ground Plan & Birds-Eye View for Cagayan de Oro Port]

3. International Cooperation Project on Overseas Port Development

Iloilo

Cagayan de Oro

[Proposed Ground Plan & Birds-Eye View for Iloilo Port]

23

Korea- Cambodia Cooperation Project Case

Project Overview

Project Results

1

3

Project opportunities 2

Project period : 2012. 4 ~ 2013. 4 Project Objectives : Development planning for 3 ports that dedicates to grain

in order to revitalize the grain export of Cambodia

Follow-up project of Korea - ASEAN cooperation projects

3 Port (2030 basis) Traffic: containers ( 1.4 million TEU), General (4.5 million tons) Development Scale: 1 multi-purpose berths ( Phnom Penh New P

ort Phase 3), grain terminals(Tonle Bet and Kilometer #6) Total Project Cost: Approximately 19 million dollar(US$) per po

rt Economic feasibility : NPV (-60 ~ +126 billion), EIRR (at least

6.25% , up 14.13%) Currently, looking for link plan with EDCF or ODA

3. International Cooperation Project on Overseas Port Development

24

Korea- Cambodia Cooperation Project Case [Current Situation of Target Ports]

[Proposed Ground Plan for Phnom Penh New Port Phase 3]

3. International Cooperation Project on Overseas Port Development

[Location of Target Ports]

[Proposed Ground Plan for Km #6] [Proposed Ground Plan for Tonle Bet]

Contents

25

Cooperation with ADB

26

To increase efficiency and effectiveness of the project,

Hold a Regular Meeting to share the experience and knowledge about por

t and logistics development

Request for advisory comment on the project

Perform joint implementation

Request participation for the step Country Partnership Strategy / Region

al Cooperation Strategy

4. Cooperation with ADB