• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.61
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• pp.273-302
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• 2014

Project finance ("PF") is a method of raising long-term debt financing based on lending against the cash flow generated by the project alone. Project finance is a nonrecourse or limited recourse financing structure against the sponsors(or the investors). The debt terms in a project finance are not based on the creditor's credit support or on the value of the assets of the project. Lenders rely on the future cash flow to be generated by the project for debt repayment and interest, rather than the value of the project or the credit ratings of the sponsors. The non-recourse or limited recourse financing usually prompt potential project finance lenders to assess carefully all possible risks that might arise in a project to ensure that those risks are mitigated and controlled. In this respect, project finance is a opposite financing method of corporate finance. Project finance has rapidly grown over the last 20 years due to the worldwide process of privatization of public sector and development of natural resources. Global project finance volume reached the record USD 406.5 billion in 2011. In 2012, however, Global project finance volume dropped 6% to USD 382.3 billion. Infrastructure overtook Energy to lead all sectors with USD 113.6 billion. It is generally recognized that there are more and higher risks in project finance compared with corporate finance. Project finance is exposed to commercial risks as well as political risks. The main commercial risks are completion risks, environmental risks, operating risks, input supply risks, revenue risks, etc, and the main political risks are currency convertibility and transfer risks, expropriation risks, war and civil disturbance risks, risks of breach of government concession agreement, etc. Completion risks include permits risks, risks relating to the EPC Contractor, construction cost overrun, delay in completion, inadequate performance on completion, etc.

• Proceedings of the Korean Institute Of Construction Engineering and Management
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• 2004.11a
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• pp.51-58
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• 2004

The input-oriented project promotion system private participation in infrastructure projects currently in use in Korea has encountered difficulties in securing the primary benefits of private sector creativity problem solving and inflow of private capital. As such, the performance (or output)-oriented procurement process implemented in England and other developed countries should be evaluated for introduction. In Korea, private participation projects are currently identified as either solicited or unsolicited projects, each with different promotional procedures, the problem with these procedures is that competition is not pre-activated, the private sectors creativity is under utilized, and the rationality of project evaluations is inconsistent. Korea should, in order to raise the level of private sector creativity and efficiency, go beyond the currently applied Input Specification project promotion system to a Performance-oriented system similar to those implemented in England and other countries. To achieve this, we mate several proposals for the introduction of the performance-oriented system. We divide the main features of our proposals into three categories, including a reformed concessionaire selection system, a performance orientation in preparation of the concession agreement, and a performance orientation in contract management, and discuss each. 1'his study describes performance-oriented promotion systems in an output-focused way As this is an initial study on the introduction of performance orientation in private participation, various key points and proposals were identified. However, in the future, detailed research in technical fields and systems, legal research, and practical projects will be needed for implementation

• Journal of Korea Trade
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• v.23 no.8
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• pp.110-131
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• 2019

Purpose - This paper investigates the implications for facilitating trade in the products of Industry 4.0. To identify the issues caused by the conflicts of policy objectives such as applying the tariff concession under the ITA and imposing the export control, by exploring the case of classification of drones. Design/methodology - We adopted a single case study method to gain a deeper understanding of the complex and multifaceted issues of Customs classification in the context of facilitating trade in the products of Industry 4.0. This study employs the case of drones to explore how these issues of Customs classification affect trade facilitation. We ensured the internal validity of the study by confirming the pattern of the results with the existing theories. Findings - Our main findings can be summarised as follows: the intrinsic nature of the products that converge several technologies causes issues in the classification. The inconsistency in product classification delays customs clearance by hindering the Customs risk-management system that pinpoints products subject to controls. To address the issues, therefore, we proposed fundamental reforms of Customs to empower themselves with management roles. Facilitating trade in the products of Industry 4.0 requires more enhanced Customs capability. Therefore, the reforms should include comprehensive capacity-building activities, such as changes in staff-trainings, promotion system, organisation and culture. Customs also need roles in robust designing of cooperative systems to compensate for the lacks of controls and to ensure concrete risk management for expedited Customs procedures. As well, by equipping the Single Window of Customs with crucial control functions of other ministries, Customs need to support the cooperation. The role of harmonising various preaudits of other ministries with its own is another essential role that ensures predictability of clearance procedure. Originality/value - There are scanty studies in the field of knowledge about what obstacles exist and what solution is available in the course of transforming to 'Industry 4.0'. In filling out the gap of knowledge, this paper is of academic significance in that it applies the research theory on trade facilitation for the specific cases of classification of the product of Industry 4.0 to verify its effectiveness and to extend the subject of the studies to the scope of Industry 4.0. It also has practical significance in that the results have provided implications for reforms of Customs procedures to facilitate trade in the products of Industry 4.0.

• KSCE Journal of Civil and Environmental Engineering Research
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• v.44 no.4
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• pp.519-529
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• 2024

Vehicle toll discounts on private roads are categorized into two types: non-sunset and sunset. Sunset types refer to provisions in which all or part of a law loses its effect upon a specific legislator-set deadline. Vehicles eligible for 'sunset' discounts include cargo vehicles operating late at night and eco-friendly vehicles powered by electricity or hydrogen. Korean government has subsidized all reduced toll fees for vehicles classified as non-sunset types on private roads to operators, but no subsidies have been provided for toll reductions on sunset vehicles. The rapid increase in electric hydrogen vehicles escalates the burden of reduced toll revenue on private road operators. This study analyzed traffic volume and toll reduction data from eight private road operators nationwide as of the end of 2023 to propose the necessity and method of supporting sunset-type toll reduction subsidies. In 2022, the subsidy for non-sunset types amounted to 87.5 billion won, or 18.6 % of total traffic revenue. The toll exemption and reduction ratio under the concession agreement ranged from 4.0 % to 5.65 % of total traffic volume for each operator. Although the proportion of vehicles exempted from sunset traffic increased from 0.85 % in 2017 to 2.79 % in 2022, the reduction amount ratio reached 4.2 % (KRW 25.5 billion) of total traffic revenue in 2022. The escalating number of registered eco-friendly vehicles is gradually causing operating profit losses on private roads. In alignment with the government's policy to expand eco-friendly vehicles, it is imperative to consider including vehicles eligible for toll reductions listed under the sunset category for subsidy payments. The study established a minimum ratio for toll reduction assistance at 4.0 %, agreed upon between the road authorities and private operators. Three policy alternatives were proposed to ensure preservation of amounts exceeding this threshold for sustaining adequate toll revenue for private road operators.

• Journal of Korean Society of Transportation
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• v.35 no.4
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• pp.360-373
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• 2017

The BTO-a projects is the types, which has a demand risk among the type of PPP projects in Korea. When demand risk is realized, private investor encounters financial difficulties due to lower revenue than its expectation and the government may also have a problem in stable infrastructure operation. In this regards, the government has applied various risk sharing policies in response to demand risk. However, the amount of government's risk sharing is the government's contingent liabilities as a result of demand uncertainty, and it fails to be quantified by the conventional NPV method of expressing in the text of the concession agreement. The purpose of this study is to estimate the value of investment risk sharing by the government considering the demand risk in the profit sharing system (BTO-a) introduced in 2015 as one of the demand risk sharing policy. The investment risk sharing will take the form of options in finance. Private investors have the right to claim subsidies from the government when their revenue declines, while the government has the obligation to pay subsidies under certain conditions. In this study, we have established a methodology for estimating the value of investment risk sharing by using the Black - Scholes option pricing model and examined the appropriateness of the results through case studies. As a result of the analysis, the value of investment risk sharing is estimated to be 12 billion won, which is about 4% of the investment cost of the private investment. In other words, it can be seen that the government will invest 12 billion won in financial support by sharing the investment risk. The option value when assuming the traffic volume risk as a random variable from the case studies is derived as an average of 12.2 billion won and a standard deviation of 3.67 billion won. As a result of the cumulative distribution, the option value of the 90% probability interval will be determined within the range of 6.9 to 18.8 billion won. The method proposed in this study is expected to help government and private investors understand the better risk analysis and economic value of better for investment risk sharing under the uncertainty of future demand.

• The Korean Journal of Air & Space Law and Policy
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• v.32 no.1
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• pp.83-138
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• 2017

Korea-China FTA entered into force on the 20th of December 2015, and one year elapsed after its effectuation as the FTA with China, our country's largest trading partner. Therefore, this study looks at the trends of air transport trade between Korea and China, and examines the contents of concessions to the air transport services sector in Korea-China FTA, and analyzes the impact on the air transport sector by Korea-China FTA, and proposes our country's aviation policy direction in order to respond to such impact. In 2016 the trends of air transport trade between Korea and China are as follows : The export amount of air transport trade to China was 40.03 billion dollars, down by 9.3% from the last year, and occupied 32.2% of the total export amount to China. The import amount of air transport trade from China was 24.26 billion dollars, down by 9.1% from the last year, and occupied 27.7% of the total import amount from China. The contents of concessions to the air transport services sector in Korea-China FTA are as follows : China made concessions to the aircraft repair and maintenance services and the computer reservation system services with limitations on market access and national treatment in the air transport services sector of the China Schedule of Specific Commitments of Korea-China FTA Chapter 8 Annex. Korea made concessions to the computer reservation system services, selling and marketing of air transport services, and aircraft repair and maintenance without limitations on market access and national treatment in the air transport services sector of the Korea Schedule of Specific Commitments of Korea-China FTA Chapter 8 Annex. The impact on the air transport sector by Korea-China FTA are as follows : As for the impact on the air passenger market, in 2016 the arrival passengers of the international flight from China were 9.96 million, up by 20.6% from the last year, and the departure passengers to China were 9.90 million, up by 34.8% from the last year. As for the impact on the air cargo market, in 2016 the exported goods volumes of air cargo to China were 105,220.2 tons, up by 6.6% from the last year, and imported goods volumes from China were 133,750.9 tons, up by 12.3% from the last year. Among the major items of exported air cargo to China, the exported goods volumes of benefited items in the Tariff Schedule of China of Korea-China FTA were increased, and among the major items of imported air cargo from China, the imported goods volumes of benefited items in the Tariff Schedule of Korea of Korea-China FTA were increased. As for the impact on the logistics market, in 2016 the handling performance of exported air cargo to China by domestic forwarders were 119,618 tons, down by 2.1% from the last year, and the handling performance of imported air cargo from China were 79,430 tons, down by 4.4% from the last year. In 2016 the e-commerce export amount to China were 109.16 million dollars, up by 27.7% from the last year, and the e-commerce import amount from China were 89.43 million dollars, up by 72% from the last year. The author proposes the aviation policy direction of Korea according to Korea-China FTA as follows : First, the open skies between Korea and China shall be pushed ahead. In June 2006 Korea and China concluded the open skies agreement within the scope of the third freedom and fourth freedom of the air for passenger and cargo in Sandong Province and Hainan Province of China, and agreed the full open skies of flights between the two countries from the summer season in 2010. However, China protested against the interpretation of the draft of the memorandum of understanding to the air services agreement, therefore the further open skies did not take place. Through the separate aviation talks with China from Korea-China FTA, the gradual and selective open skies of air passenger market and air cargo market shall be pushed ahead. Second, the competitiveness of air transport industry and airport shall be secured. As for the strengthening methods of the competitiveness of Korea's air transport industry, the support system for the strengthening of national air carriers' competitiveness shall be prepared, and the new basis for competition of national air carriers shall be made, and the strategic network based on national interest shall be built. As for the strengthening methods of the competitiveness of Korea's airports, particularly Incheon Airport, the competitiveness of the network for aviation demand creation shall be strengthened, and the airport facilities and safety infrastructure shall be expanded, and the new added value through the airport shall be created, and the world's No.1 level of services shall be maintained. Third, the competitiveness of aviation logistics enterprises shall be strengthened. As for the strengthening methods of the competitiveness of Korea's aviation logistics enterprises, as the upbringing strategy of higher added value in response to the industry trends changes, the new logistics market shall be developed, and the logistics infrastructure shall be expanded, and the logistics professionals shall be trained. Additionally, as the expanding strategy of global logistics market, the support system for overseas investment of logistics enterprises shall be built, and according to expanding the global transport network, the international cooperation shall be strengthened, and the network infrastructure shall be secured. As for the strengthening methods of aviation logistics competitiveness of Incheon Airport, the enterprises' demand of moving in the logistics complex shall be responded, and the comparative advantage in the field of new growth cargo shall be preoccupied, and the logistics hub's capability shall be strengthened, and the competitiveness of cargo processing speed in the airport shall be advanced. Forth, in the subsequent negotiation of Korea-China FTA, the further opening of air transport services sector shall be secured. In the subsequent negotiation being initiated within two years after entry into force of Korea-China FTA, it is necessary to ask for the further opening of the concessions of computer reservation system services, and aircraft repair and maintenance services in which the concessions level of air transport services sector by China is insufficient compared to the concessions level in the existing FTA concluded by China. In conclusion, in order to respond to the impact on Korea's air passenger market, air cargo market and aviation logistics market by Korea-China FTA, the following policy tasks shall be pushed ahead : Taking into consideration of national air carriers' competitiveness and nation's benefits, the gradual and selective open skies shall be pushed ahead, and the support system to strengthen the competitiveness of air transport industry and airport shall be built, and entry into aviation logistics market by logistics enterprises shall be expanded, and the preparations to ask for the further opening of air transport services sector, low in the concessions level by China shall be made.