Container Terminal Authority needs to be rebuilt

The Korea Container Terminal Authority needs to rebuild their position to help Korea become a primary Northeast Asian Logistic Center and strong ocean country in the 21st century, said professor Ki-myoung Ahn from Korea Maritime University.

Professor Ahn predicted in the policy discussion held by the Korea Port Economy Society that the role of "public corporations" would gradually increase, even if port management systems changed in the future. He anticipated that the Container Terminal Authority would be in charge of developing the hinterland, North Korean port developments preparing for inter-Korean business, hub port developments, and ocean developments.

This type of business requires long construction periods and offers obscure profitability. It will be difficult for private corporations to attend to it directly because of its basic nature. So the Korea Container Terminal Authority, a kind of state-run company will be suitable to undertake this work. He also suggested that to prepare for all of this, the Korea Container Terminal Authority would need to restructure their organization.

Meanwhile, the Korea Container Terminal Authority is showing favorable numbers in their analysis of profitability, maintaining a 150-160% level. In this analysis, the Korea Container Terminal Authority showed total investment efficiency at a low state, but value added ratio and capital-intensivity at a high level.

After the Korea Container Terminal Authority was established, it built 13 berths in the Kamman quay, the first quay in the Port of Kwangyang, Uam quay, HBCT (Hyundai Busan Container Terminal), and PECT (Pusan East Container Terminal) as a dedicated container terminal over 9 years. However, government efforts to industrialize Korea in the post occupation years up to the early 1990`s resulted in nearly 7 berths at container only terminals in HBCT and PECT.

Container cargoes will multiply 1.7 fold by 2006 over 1999 and 2.6 fold by 2011. According to this, 104 berths are needed to handle cargoes in 2011. The Korea Container Terminal Authority will assume the bulk of the workload, and is currently planning to develop 66 berths according to these figures.

Professor Ahn stressed that the Korea Container Terminal Authority will draw on a fund to support financial resources for port facilities and will be capable of reinvesting income from berthing and quay rentals for the port in the future.

Regarding government policies aimed at smaller government, business diversity, localization and deregulation, the Ministry of Maritime Affairs and Fisheries should put its main focus on the port policy and deliver regional offices or private port handling operations. But professor Ahn also said that it is too early to hand port operations over to regional offices. It might need public cooperation to run a part of port management and development.

Kwangyang, hoping to be a hub port in the Pacific, needs to gear up container ports continuously, and so does the Korea Container Terminal Authority, he added.

In conjunction with North Korean port developments, he expected that North Korea would speed up its open economy after the Inter Korean summit, and it would urgently need port facilities for sea transportation to move a lot of cargo. Now North Korea is reported to have no basis for manpower, financial resources, or know-how for port development.

He suggested that with the character of this work in mind, there is no other more suitable body than the Korea Container Terminal Authority.