PPI (PRIVATE PARTICIPATION IN INFRASTRUCTURE) STATUS OF SOC (SOCIAL OVERHEAD CAPITALS) AND ITS IMPROVEMENT IN KOREA

The infrastructure in korea has been improved drastically since July 7th, 1970 which was the first highway completed date in Korea (Seoul-Pusan). This is one of the major factors for the competitiveness of a country. Now the total length of highway in Korea is more than 2000km. However Korea is 11th in the trade volume in the world, the SOC level of Korea is around 20th at most in the world (IMD 2004). The infrastructure in Korea comparing other developed countries is far below, which gives the impact of cost of goods, even twice expensive in transporting goods through highways, railways and ports etc. Now the government budget is gradually spending more for welfare and health care side. The most of additional expense of welfare is increasing rather than SOC budget is decreasing or staying as it is as 2003. The government may think that the level of SOC is enough in point of view of preference input of budget such as welfare and health care etc. However the SOC level in Korea is far form the competitiveness of the country. The main points of this paper is to show that where Korea is in point of SOC level to go for developed country, and what to do to facilitate BOT, BTO and BTL projects. Korean government has tried to improve the practice of PPI (Private Participation of Infrastructure) with the Act on Private Capital Inducement in 1994 and the Act on Private Investment in 1997.