S. Korea backing Busan upgrade

S. Korea backing Busan upgrade

South Korea plans to invest more than $50 billion to develop the main Port of Busan into a regional logistics hub over the next several years, to help it compete with fast-growing competitors Shanghai and Shenzhen.

The blueprint outlined by the Finance Ministry and free trade zone authority calls for faster completion of a new harbor to relieve overcrowding. The new harbor will be able to berth six ships simultaneously and should be complete by the end of 2006, ahead of the original 2008 deadline.

A spokesman at Busan said that the 61.7 trillion won ($53.4 billion) plan calls for expansion by 2011 to accommodate 30 ships at a time.

Busan is also among ports to be equipped with modern, unmanned stevedoring and additional cranes.

In addition to developing the harbor, the central government and regional administrations are planning to extend road and rail links to help move shipments throughout the country from Busan on the southeast coast.

Finance Minister Lee Hun-jai and Maritime Affairs Minister Chang Seung-woo said rents charged for companies using the surrounding support zone will be competitive with those of Shanghai, with improved power and water supplies.

Busan has been steadily losing marker share, moving 10.37 million TEUs in 2003 against Shanghai's 11.28 million, and falling to fifth among the world's container ports.

Users complained that the state-run port was inefficient, vulnerable to strikes, and slow to respond to changing demands. Officials say they are now focusing on improved logistics to promote growth, rather than simple movement of boxes.

A new Busan Port Authority was put in place to handle port management independent of central and local governments.