Pusan suspends container tax until end of 2006

To keep Pusan Port internationally competitive, Pusan is pushing for exemption from container taxes and tolls for container carriers for paid roads.

The City of Pusan decided August 14th to suspend tolls for container carriers through Bunyoung?no (the first intra-city expressway) and the Tongsu overpass (the second intra-city expressway) starting September 1st in order to avoid a crisis and save logistic costs in the Port.

The city also settled on exempting container carriers from tolls through Kwanmun-ro (the third intra-city expressway) and Kwangan-no, which connects the Sujung and Baekyang tunnels, both to be build with private capital with the budget being secured beginning next year.

However, exemption for these four paid city expressways will only run until the end of 2006 when container taxation will resume.

The city revealed that it may well lose as much as 4.5 billion won as 2.88 million container carriers per year won?t being paying. An insider from Pusan City Hall explained that this exemption was introduced as the Port of Pusan is confronting its worst crises, or in other words, the Cargo Federation and Rail Way strikes and the strength of the Port of Shanghai surpassing Pusan is taking its toll. To make matters worse, container cargoes in Pusan are decreasing.

Container carriers have paid 800 won for two tollgates, Bunyoung-no (400 won for each toll gate), 800 won for the Tongsu overpass, 1,000 won for Sujungsan-tunnel, 900 won for Baekyang tunnel and 1,500 won for Kwangan-no.

The city is also considering doing away with container taxes through discussions with the central government as it demonstrated that high logistic costs are seriously adversely affecting Pusan Port?s competitiveness. Container tax was introduced in 1992, and scheduled to be collected until the end of 2006.

Pusan City Hall evaluated abolishing container taxes, which have been used to build 10 Pusan Port back roads with central government financial assistance.

A high official from Pusan said that the earlier exemption of container tax in addition to toll exemptions for container carriers will help improve and consolidate competitiveness at the port.