Gwangyang needs reconsider terminal fee system

The Korea Container Terminal Authority (KCTA) has had to postpone collecting investment money from terminal operating companies until they get out of the red and succeed in securing more shipping lines and cargoes.
Mr. Donghee Han, Gwangyang branch manager at Hanjin Shipping, reported on how subleasing according to a company’s profitability has influenced activities in Gwangyang recently.
He said in the report that Gwangyang terminal operating companies signed with the KCTA to introduce a profit-sharing system where charges would vary with profitability on top of the basic charge for subleases during the period from 2002 to 2007. Then, a fixed rates system will come into force from 2008. After yearly terminal handling amounts were released in mid-March, the KCTA charged terminal operating companies that handled cargoes over the base amount according to the profit-sharing system.
The profit-sharing charges were determined based on the number of cargoes above a base level. They included total import and export cargoes but exempted transit and coastal ones.
However, in the course of paying profit-sharing charges, the terminal operating company handled domestic import and export cargoes of 295,000 TEUs, but had to pay an additional 1.56 billion won as it handled 397,000TEUs in transit cargoes, for which it could not levy additional charges.
He explained that this was caused by the government policy to exempt profit-sharing charges for transit cargoes to foster Gwangyang port by drawing more cargoes.
This policy will harm shipping companies that handle more local cargoes than transit cargoes until 2008 when the fixed rates system is introduced. He claimed that it is unfair to give benefits to shipping companies that handle transit cargoes.
Surrounded by countries that draw cargoes to themselves by offering benefits to shipping lines, Mr. Han said that most urgent thing is to change the methods of calculating subleases in order to stimulate activity in Gwangyang. On the KCTA side, it will try to collect its investment earlier than scheduled, but terminal operating companies won’t draw cargoes over the basic quotas under this system, i.e. it won’t work to help the port of Gwangayang to draw cargoes.
“The KCTA needs to take care of terminal operating companies in Gwangyang to stand on its own feet and then to draw cargoes to its terminals and reclaim its investment within 2-3 years,” asserted Mr. Han.