Government to Provide Support for Passenger Ship Damage Traveling Between Japan and China

Ministry of Oceans and Fisheries Prepares and Implements 'Additional Support Measures for Shipping and Port Sector Related to COVID-19'

(Photo) [Image source=Yonhap News]

[Sejong=Asia Economy Reporter Joo Sang-don] The government has decided to provide support to passenger shipping companies operating the Korea-Japan route amid the spread of the novel coronavirus infection (COVID-19).

On the 2nd, the Ministry of Oceans and Fisheries announced that it has prepared and will implement the "Additional Support Measures for the Shipping and Port Sector Related to COVID-19."

Earlier, on the 17th of last month, the Ministry of Oceans and Fisheries, together with related ministries, announced the "Emergency Support Measures for Aviation and Shipping in Response to COVID-19." However, as the infectious disease alert was raised to the "serious" level and the COVID-19 situation worsened, damage across all areas of shipping and ports has been expanding and deepening. Accordingly, the Ministry of Oceans and Fisheries has expanded the support included in the previous measures and prepared additional measures reflecting support plans for Korea-Japan passenger shipping companies and coastal passenger shipping companies, which have recently seen increased damage, as well as industry requests.

First, for Korea-Japan passenger shipping companies whose passenger numbers have sharply declined due to the spread of COVID-19, the damage period will be phased, and port facility usage fees and terminal rental fees will be reduced. For four domestic companies transporting passengers only, port facility usage fees and terminal rental fees will be reduced by up to 100% until the infectious disease alert is lifted. For ferry companies transporting both passengers and cargo, port facility usage fees and terminal rental fees will be reduced by up to 30% until the alert is lifted.

Support will also be promoted to minimize damage to the coastal shipping industry, which is experiencing passenger declines due to travel restraint. Coastal passenger shipping companies will receive reductions in port facility usage fees. For the three months directly affected by COVID-19 (February 1 to April 30), port facility usage fees will be reduced by 50%. The Ministry of Oceans and Fisheries plans to review additional reductions in port facility usage fees based on passenger transport performance if the situation does not improve thereafter.

Operational fund support for shipping companies using funds from the Shipping Association will also be provided. First, financial institutions that have received deposits from the Shipping Association will offer low-interest loans for emergency management funds totaling 30 billion KRW, with up to 1 billion KRW per company. Additionally, the Shipping Association will use part of its own operating funds (2 billion KRW) to provide loans of up to 100 million KRW per company to affected small and medium-sized members.

Furthermore, various government subsidies will be advanced up to nine months to provide a total of 20.9 billion KRW in emergency liquidity support to coastal shipping companies.

The scope of support under the first measures will also be expanded. If the current situation continues for more than three months, emergency management funds totaling 90 billion KRW will be provided to foreign cargo shipping companies (including both irregular and regular). This support plan, in which financial institutions that have received deposits from the Korea Ocean Business Corporation use the funds for loans to shipping companies' operating funds, will be implemented in the same manner as the previous measures. Companies wishing to receive funding will be supported up to 5 billion KRW per company.

Additionally, for vessels calling only within the China-Japan region centered on Busan Port (regular container ships), the Busan Port Authority will provide operational incentives totaling up to 5 billion KRW. The support amount will be allocated to each shipping company based on the ratio of the number of calls by individual companies to the total number of calls by all eligible vessels entering Busan Port.

The deadline for installing eco-friendly equipment on vessels selected for the second compensation support, which was initially deferred until the end of March, will be extended by three months from the end of the infectious disease alert. Also, 50% of the support budget (about 5.7 billion KRW) for vessels designated as national essential vessels will be expedited for execution by June.

Along with this, port usage fees and rental fees paid by port transport operators and ancillary businesses to port authorities will be temporarily reduced by 50% for six months. The scale of the win-win funds operated by four port authorities?Busan, Incheon, Yeosu-Gwangyang, and Ulsan?will be expanded from the current 14.7 billion KRW to 28 billion KRW to increase the number of beneficiary companies. In a spirit of sharing the pain with Korea-China passenger shipping companies whose passenger transport has been suspended, the Pilots Association has voluntarily decided to offer a 10% discount on pilotage fees at Incheon Port and Pyeongtaek-Dangjin Port from the 20th of last month until passenger transport resumes.

Minister Moon Sung-hyuk of the Ministry of Oceans and Fisheries said, "These additional support measures are proactive responses to minimize the damage to shipping companies caused by the spread of COVID-19," adding, "We will ensure smooth cooperation with related ministries and agencies so that the support measures are implemented without any setbacks and will closely monitor whether shipping and port companies face any difficulties."

This content was produced with the assistance of AI translation services.