Phase 2-4 of the Busan New Port development is getting back on track, with the submission of application documents to commence reclamation works, South Korea’s Ministry of Oceans and Fisheries (MOF) announced on 24 September.
Work on Phase 2-4 ran into financial difficulties as it tried to take off through private investment.
In November 2004, a consortium led by SsangYong Engineering and Construction submitted proposals to develop Phase 2-4, with a budget of KRW566 billion (USD473.6 million).
The group was appointed to develop Phase 2-4 in March 2007, but backed out in February 2009 as the global financial crisis took its toll on the South Korean economy.
MOF consequently began negotiations with the next in line for the job, a consortium led by Hyundai Development. A provisional contract was signed in December 2010.
However, the main founder of the consortium left the company and the finalisation of the contract was delayed with the group itself being restructured in April 2013 with Hyundai Development and Hyundai Merchant Marine each having an equal share.
The consortium was renamed Busan Container Terminal and although the contract was finalised in July 2013, the group members had difficulties raising the funds needed for the investment. Consequently, the submissions of designs for the port were delayed.
Eventually, the government came to the rescue, through its investment stimulation programme. The KRW30 trillion programme, which was introduced early this year, encourages the private sector to reduce its risks in investing new growth industries.
According to the plan, the government will invest KRW15 trillion through state-owned policy bank Korea Development Bank (KDB), with the other funds coming from the private sector.
In April, MOF signed a memorandum of understanding to collaborate with industry and KDB in port development, opening a path to tap on the investment stimulation programme for funds.
MOF hopes that with the funding resolved, reclamation works for Phase 2-4 can start within this year and that the berths would be completed by 2020.
Of the 45 new berths in Busan New Port 23 were completed in earlier phases. Phase 2-4 would provide three of the berths.
The entire Busan New Port development is slated for completion in 2020. There will be 34 container terminals, four feeder terminals, one ro-ro terminal, and one multipurpose terminal.