Public-Private Partnerships in Republic of Korea: Experience and Results

Abstract

The Republic of Korea came to realize the acute necessity of launching the public-private partnership (PPP) at the turn of the 90s, the country happened to fall short of such infra facilities as roadways, railroads, sea ports and airports and the government found itself unable to fully finance their construction works. Although the PPP institutional framework started to get purposely and mostly formed in the first half of the 90s in Korea the PPP itself actually came into occasional practice even before, owing to some legislation, covering roadways and sea ports. There are four main stages to be noted in the development of PPP, consecutively ranging from 1968 to 1994, from 1994 to 1999, from 1999 to 2004 and since 2005 till now. The PPP periods are much related to various amendments to the basic PPP law, initially adopted in August 1994 as the Act on Promotion of Private Capital Investment in Social Overhead Capital which was transformed into the Act on Private Participation in Infrastructure (briefly called the PPP Act) in December 1998. Along with this Act, Korea's PPP institutional basis currently laid by the Enforcement Decree of the Act on Public-Private Partnerships in Infrastructure, the PPP Basic Plan and the PPP Implementation Guidelines. It is the PPP Act that determines 49 types of PPP project-eligible infra facilities, categorized into 15 groups such as roads, railroads, ports, airports, communications, water resources, energy, environment, forestry, logistics, welfare, public housing, military housing, education, culture/tourism. In the aspect of the globally-recognized types of PPP procurement methods, the PPP Act primarily determines the use of such mechanisms as BTL, BTO, BOT, BOO.