South Korea’s state-backed ship finance institution Korea Ocean Business Corporation (KOBC) is set to help compatriot liner operators to acquire port and terminal assets.
On 12 December, lawmaker Ahn Byung-gil introduced a bill to amend the Korea Ocean Business Corporation Act so that the finance institution can add port development and port hinterland development projects to its portfolio.
Ahn, member of the National Assembly’s Agriculture, Food, and Rural Affairs, Oceans and Fisheries Committee, said that the amendment enables KOBC to participate as a financial investor in domestic and overseas port and logistics park development projects.
Local industry observers have suggested that South Korean shipping lines should strive to acquire ports and terminals and logistics facilities worldwide, in response to their European and Chinese counterparts that are already actively investing in such infrastructure to secure new growth engines.
“However, as ports and logistics parks are high-risk and capital-intensive investments, we have difficulties attracting investors and procuring private finance,” Ahn explained.
The amendment also provides grounds for KOBC to support ports and transportation-related businesses, including physical bunker supply operations, reflecting the situation in which it has been pointed out that the size of the domestic marine fuel market needs to be expanded and improved.
Ahn added, “Recently, the size of ships is rapidly progressing, and we have seen more 24,000 TEU ships deployed. Due to the low credit rating and small size of physical bunker suppliers, and in the absence of policy finance, it is difficult to achieve large-scale modernisation by one’s own efforts.”
Ahn also proposed an amendment to the Harbor Transportation Business Act to introduce a standard contract relating to workers providing support services, such as supplying ship spares and sundries and container repair.
Ahn said that having a standard contract would establish safety standards while preventing workers from having to perform duties beyond their job scopes.
Martina Li
Asia Correspondent
