Airport privatization plan hits more roadblocksThe government’s decade-long plan to sell some of its shares in the Incheon International Airport Corporation is losing steam as lawmakers continue calls to abandon the move to privatize the nation’s No. 1 airport.
On Tuesday, the National Assembly’s Land, Transport and Maritime Affairs Committee adopted a resolution to remove a clause from next year’s budget for the Ministry of Land, Transport and Maritime Affairs.
The clause refers to the revenue collected by selling 49 percent of the airport to the public and foreign investors, and its omission puts the deal, at least for now, on hold.
Initially, the ministry submitted to the National Assembly its budget proposal of both estimated revenue and expenditure for next year. This included a substantial income stream of 431.4 billion won ($3.86 million) from selling the publicly owned airport.
The committee’s ruling and opposition party members agreed to take it out to block the government’s privatization plan and it is currently under review by the legislature’s Special Committee on Budget and Accounts. A final decision is expected to be made next week.“It’s very rare for lawmakers to take out the whole revenue clause,” said an official from the Ministry of Strategy and Finance.
If the budget and accounts committee passes the resolution and the clause stays out of next year’s budget, the government’s plan could be delayed indefinitely.Lawmakers have been opposing the government’s move to sell off its shares to public and foreign investors as they see no need given that business at the airport is thriving.
Last year, the corporation earned 324.2 billion won in profit - its seventh straight year of positive returns - and the government received 68.1 billion won in dividends. The airport was also named the best in the world for the sixth consecutive year in 2011 by the Airports Council International.
Additionally, as of last year it ranked as the world’s eighth-largest international airport in terms of passenger traffic. London’s Heathrow and Paris’ Charles de Gaulle airports filled the top two spots.
But in August, Grand National Party Chairman Hong Joon-pyo proposed that the government should sell off 15 percent of its stake at a discounted price to the public to help low-income households and to redistribute national wealth. Instead of being well-received, the proposal got a cold response from other ruling and opposition lawmakers. Some who opposed the idea claimed the government was merely trying to earn money to fill budgetary gaps.
“Though the National Assembly proposed a resolution to cut 431.4 billion from the land ministry’s total budget revenue for next year, the resolution has not yet passed the Special Committee on Budget and Accounts,” said an official from the ministry.
“So it is too early to say that the plan has failed.”Meanwhile, the conflict rages on. “In order to boost the competitiveness of Incheon International Airport, new and large-scale investments are needed from the private sector,” said another official from the finance ministry.
By Lee Eun-joo [firstname.lastname@example.org]
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