Technology
The Republic of Korea has a long history of PPP. Its early experience consisted of individual legislation for specific projects. In 1994, the government began to formalize its process with the passing of the Act for the Promotion of Private Capital Investment in Social Overhead Capital, which provided the legal framework for the broader use of PPP. The legislation was revised in 1999 to produce the Act for Public-Private Partnerships in Infrastructure, which provided for the establishment of a PPP unit. The Korea Development Institute’s Public and Private Investment Management Center (PIMAC) currently serves as Korea’s PPP unit. From 1994 to 2015, the country implemented 684 PPP projects. PIMAC is authorized to conduct prefeasibility studies for publicly financed projects with a total project cost of at least W50 billion, where W30 billion or more is subsidized by the State. Under the PPP legal and institutional framework, PIMAC screens and appraises PPP projects during the selection process. Solicited projects costing W200 billion or more for build-transfer-operate projects, or at least W100 billion for build-transfer-lease projects, and all unsolicited proposals are subject to analysis by PIMAC. In Korea, potential PPP projects are identified by line ministries, or the private sector in the case of unsolicited proposals. As part of the feasibility assessment, projects (publicly financed and PPP) are subject to the Analytic Hierarchy Process, which includes economic, policy, and balanced regional development analyses. Following this process, projects go through project appraisal, where qualitative and quantitative (including value-for-money) analyses occur. If a project successfully completes this process, PIMAC will recommend it for procurement as a PPP.