[2020 National Audit] Eo Gi-gu "Busan Port Transshipment Incentives, 35.3 Billion KRW Paid to Foreign Shipping Companies Over 5 Years"

[Asia Economy Reporter Lee Kwang-ho] A significant amount of the Busan Port transshipment incentive payments, intended to attract transshipment cargo (cargo that must be transferred to another vessel at an intermediate port rather than the final destination during transportation), has been paid to foreign shipping companies, raising concerns about unnecessary outflow of national wealth.

The transshipment incentive system provides incentives to shipping companies handling transshipment cargo to prevent the cargo from diverting to overseas ports. This system is currently operated at Busan Port, Gwangyang Port, Incheon Port, and others.

In particular, Busan Port accounts for 95% of South Korea's total transshipment cargo and is the second-largest transshipment port after Singapore.

On the 20th, at the Busan Port Authority audit held at the National Assembly, Eo Gi-gu, a member of the National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee from the Democratic Party of Korea, pointed out, "From 2015 to last year, the incentives paid to domestic shipping companies by Busan Port to attract transshipment cargo amounted to 20.32 billion KRW, but 35.31 billion KRW, 1.7 times more, was paid to foreign shipping companies."

The transshipment incentives are funded by the Port Authority, with some budget allocated by the local government, Busan City. Since 2015, an average of 11 billion KRW per year from the Port Authority's budget has been spent on incentives, with the greatest beneficiaries being foreign shipping companies.

Some port experts have criticized the incentive system as "buying cargo with money," calling for verification of its effectiveness. On July 29, the Anti-Corruption and Civil Rights Commission recommended enhancing transparency in the operation of the transshipment incentive system and establishing provisions for analyzing and evaluating its effects on port revitalization.

Assemblyman Eo emphasized, "As the second-largest transshipment port, Busan Port should not be solely focused on securing volume but must prioritize strengthening port competitiveness to maximize transshipment cargo attraction strategies. Efforts should be made to ensure that the incentive system prevents unnecessary outflow of national wealth and that a thorough analysis of its effectiveness in attracting transshipment cargo is conducted so that Busan Port can be reborn as an optimized transshipment hub."

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