Research Reports

Since the enactment in 1994, the PPP(Public-Private Partnership) of Korea has made a great contribution to economic growth and social welfare. However, it has come under big social criticism. In particular, excessive government subsidies due to the Minimum Revenue Guarantee(MRG) and inadequate demand forecasts became the main cause of criticism. Another criticism came from the higher user payment level of PPP compared with government owned facilities. But, detailed improvement plans have not been sufficiently researched. In addition, since private investment projects require large investment resources, a small number of construction companies and financial institutions maintain an oligopoly system, which may have created distrust and concern about excessive profit. In recent years, bankruptcy of the Uijeongbu light-transit has deteriorated the perception of PPP even more negative. Under these circumstances, Korean government is trying to strengthen the management and supervision and publicness of PPP, which policies lead to the reduction of private investment. The examples are the transition of the PPPs’ into government owned projects, and the amendment of the Toll Road Law. Under this background, this study searches the issues to secure the 'publicness' of PPP and sought strategies to solve these issues through benchmarking overseas PPP experience. The suggested strategies are 1)levying PPP user fees similar level to the government owned facilities; 2)Improving the limited participation opportunities and concentrated governance; 3)easing information asymmetry; 4) improving financial stability of project company; and 5)expansion of applicable facilities. Finally, the research proposes nine implementation plans to execute the above mentioned strategies based on case studies of UK, Spain, Portugal, and Japan.