Lawmaker queries privatization at Incheon Port
Published: 15 Sep. 2009, 23:49
The incumbent administration has been outspoken in its efforts to privatize public companies in the name of “raising efficiencies,” but a lawmaker from the ruling Grand National Party has questioned the plan’s validity, citing the example of a possible corruption case involving a firm recently spun off from the Incheon Port Authority, a public entity.
According to Rep. Huh Cheon, a slew of workers from Incheon Port Authority were simply relocated to Incheon Port International Passenger Terminal, a private firm launched in tandem with the June 30 shutdown of a public company named Port Management Corp. under the control of the Incheon Port Authority.
The government decided to remove Port Management Corp. for efficiency’s sake and had Incheon Port International Passenger Terminal take over all job-related responsibilities.
However, it turned out that the private company’s head used to work for a unit under the Land, Transport and Maritime Affairs Ministry, a watchdog of Incheon Port Authority.
He was appointed chief executive as the largest shareholder of the private firm with a 30.2 percent-stake.
Two executives of the company worked at Incheon Port Authority and six former workers of the authority also joined the private firm, according to Rep. Huh.
He said those workers submitted letters of registration to their former employer only a week after a meeting to set up the company. The private firm has 30 employees at present.
The firm’s five-year contract signed with Incheon Port Authority stipulates that the authority will provide the necessary government subsidies if the company gets into trouble.
“I suspect that those ex-workers of the Incheon Port Authority who knew every detail of the privatization process conspired with the authority to set up the terminal operator,” Huh said in a report. “If this is the case, this is a huge example of moral hazard for government officials and public company employees.”
But two executives of the terminal operator refuted the lawmaker’s claim in a phone interview with the JoongAng Ilbo, the JoongAng Daily’s sister paper. They claimed they were simply making personal investments in the company.
“I think it would be more reasonable for a person well aware of port-related operation to assume the top post,” the chief executive also said.
By Seo Ji-eun. Sun Seung-hye [[email protected]]
According to Rep. Huh Cheon, a slew of workers from Incheon Port Authority were simply relocated to Incheon Port International Passenger Terminal, a private firm launched in tandem with the June 30 shutdown of a public company named Port Management Corp. under the control of the Incheon Port Authority.
The government decided to remove Port Management Corp. for efficiency’s sake and had Incheon Port International Passenger Terminal take over all job-related responsibilities.
However, it turned out that the private company’s head used to work for a unit under the Land, Transport and Maritime Affairs Ministry, a watchdog of Incheon Port Authority.
He was appointed chief executive as the largest shareholder of the private firm with a 30.2 percent-stake.
Two executives of the company worked at Incheon Port Authority and six former workers of the authority also joined the private firm, according to Rep. Huh.
He said those workers submitted letters of registration to their former employer only a week after a meeting to set up the company. The private firm has 30 employees at present.
The firm’s five-year contract signed with Incheon Port Authority stipulates that the authority will provide the necessary government subsidies if the company gets into trouble.
“I suspect that those ex-workers of the Incheon Port Authority who knew every detail of the privatization process conspired with the authority to set up the terminal operator,” Huh said in a report. “If this is the case, this is a huge example of moral hazard for government officials and public company employees.”
But two executives of the terminal operator refuted the lawmaker’s claim in a phone interview with the JoongAng Ilbo, the JoongAng Daily’s sister paper. They claimed they were simply making personal investments in the company.
“I think it would be more reasonable for a person well aware of port-related operation to assume the top post,” the chief executive also said.
By Seo Ji-eun. Sun Seung-hye [[email protected]]
with the Korea JoongAng Daily
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