Development and Operation of

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1 Development and Operation of

2 Table Ⅰ General Situation Ⅱ Facility & Equipment Ⅲ Occupants Ⅳ Working Process Ⅴ Functions & Effects of ICD Ⅵ Consideration of PPP - 1 -

3 Korea Bhutan China Japan Myanmar Laos Thailand Cambodia Map of Asia - 2 -

4 Seoul Uiwang ICD Busan Port Map of Korea - 3 -

5 Railroad Station Highway Highway General view of Uiwang Inland Container Depot - 4 -

6 Repair Shop Gas Station Station Building Terminal 1 CFS CY Railroad Terminal 2 Auto Maint. Shop Expressway CFS Map of Uiwang Inland Container Depot - 5 -

7 Purpose of Establishment Strengthening national competitive power by minimizing logistics cost through improvement of nation s ocean-going container logistics system Found of Corporation ㅇ 91.5 : Finalization of Construction Plan of ICD (SOC Investment Committee Government body) ㅇ 92.4 : Establishment of SPC (Uiwang ICD Co.,Ltd.) Invite of Stockholders ㅇ Public Sector : 25% (Korea Railroad/Government owned corporation) ㅇ Private Sector : 75% (15 Companies) - 14 container transportation companies - 1 container repair company - 6 -

8 Secure of Land-site ㅇ Ownership of Land : Public Sector (Korea Railroad) ㅇ Period of Lease : ~ (30 years) * Pay rental charge every year Construction ㅇ Period : ~ ㅇ Total Cost : US$30Million ㅇ Financing - Public sector : Base facilities (road, railroad, electricity, water, sewage) - Private sector : Building, CY(Container Yard), CFS, Equipments * Stockholders paid construction cost by cash ratio of their shares. ㅇ Container Handling Capacity : 1.3 Million TEU/year Benefit of Investment ㅇ Obtain the right of monopolistic using of CY by paying charge * Private stockholders(15) operate their CY independently ㅇ Obtain the right of using of office room by free of charge ㅇ Type of Investment : BUILD OPERATE(30years) TRANSFER - 7 -

9 Item Description Total of Lands (Area) Container Yard C.F.S (Bonded Warehouse) Operation Building Automobile Maint. Shop Container Maint. Shop Reefer Plug Railway Gas Station 753,000 m2 417,000 m2 10,700 m2 (3 bldgs) 140,000 m2 (8 bldgs) 1,720 m2 ( 1 bldgs) 1,220 m2 (1 bldgs) 96 Unit 6,262 m (11 lines) 480 kl - 8 -

10 Transfer Crane (3EA) Reach Stacker (43EA) (RTGC type) Tractor (650EA) Trailer (1800EA) - 9 -

11 Operation Structure Uiwang ICD Co., Ltd Management of Facility Loading/Unloading of Railroad Container Public Container Yard Operation Bonded Area Operation Sales of Petroleum Shareholder Company Transportation of Container Operation of CY(Container Yard) & CFS (Container Freight Station) Container Repair Shop Automobile Maintenance Shop Government Body Name Major Function Custom House Foodstuff Inspection Plant Quarantine Railroad Station Customs clearance procedure Inspection of imported Foodstuff Quarantine of imported agri-product Railroad Transport of Container

12 Others Customs Clearance Brokers Transportation Brokers (35) Convenient Facilities : cafeteria, lodging house Working person : 1,000 (Uiwang ICD Co., Staff : 37) <Main Bldg> <Railroad Station> <Custom House>

13 Import Railroad Overland <CY> <Custom House> Unloading Report (EDI) Approval <Food Inspection Plant Quarantine> <Port> <Customs Clearance Brokers> Railroad Overland Export <Uiwang ICD System> GATE GATE <Loading> <ICD> <Shipper>

14 INCHON SEOUL UIWANG ICD GWANGYANG BUSAN RAILROAD OVERLAND

15 DFT : Domestic Freight Terminal IFT : Combined ICD and DFT Incheon Port Gwangyang Port Busan Port Major Sea Ports and Dry Ports

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17 Inland Container Terminal Perform CY(Container-Yard), CFS (Container Freight Station) function like Ports Record (TEU) Item Railroad 502, , , , ,716 Overland 493, , , , ,032 Total 995,734 1,008,776 1,079,123 1,007, ,

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19 Railroad Transportation Contract with transportation company with round-trip and daily basis Running time : 8 ~ 30 Trains per day Uiwang ICD Busan, Gwangyang Ports Record (TEU) Item Arrival 230, , , , ,143 Dispatch 271, , , , ,573 Total 502, , , , ,

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21 Customs Clearance One-stop Service Custom House, Food Inspection Office, Plant Quarantine Office station in ICD Check the customs procedure in real time on Integral Logistics Network Record (TEU) Information Network Item Korail Import 46,862 48,946 36,775 35,933 Government Customs Commodity Machinery Electric Footwear Ot he r s 25% 23% 10% 42% Shipper Uiwang ICD Shipping Line Transportation Company

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23 Inland Transportation Deliver Empty Container shortest distance Combine Transport with Railroad & Overland Flow of Transport Railroad Transport(Korail) Overland Transport [ Ports] [ Uiwang ICD] [ Shipper] Save Delivery Cost

24 Relief of Traffic Congestion by large volume of Railroad Transport Utilization as Clearance Depot for Capital Region s Container (Curtailment of cost and time) Reform the function of CY/CFS at inland as Sea-ports (Relief of accumulated cargo at ports) Operate sophisticated computer processing system (Supplying latest logistics information to the related parties at real time)

25 Background of PPP Settlement ㅇ SOC Investment Committee publish construction plan of ICD ( 91.5) - Railroad Authority (RA) : wants to construct & operate alone by the RA s budget - Private sector(transportation company) : oppose RA s plan and persuade Committee to make PPP with RA [factors of success] * If RA s union strike and the ICD shut-down, it becomes the disaster * RA does not have experience of management of ICD * Government invite Private sector s money and save the budgets Conclusion of PPP Negotiation ㅇ Railroad Authority : 25% (invest to commercial company up to 25% only) ㅇ Private Sector : 75% - transportation companies (14) : 73% (secure the area of CY by shares) - container repair company (1) : 2%

26 Benefits ㅇ Government s financial support - direct support of 25% of total construction cost - improvement and widen the road of outside ICD ㅇ Easy to go through permission procedures of central and local government - evaluation of transport effects and environmental effects according to development - construction in the development of restriction zone (Green Belt Zone) ㅇ Use of public land sites (property) at competitive cost ㅇ Sustainable operation of ICD during 30 years - according to contract with public ㅇ Get a loan(policy fund) from financial institute at a very low interest (other ICDs)

27 Challenges ㅇ Tendency toward private side, when a conflict of interests between Public and Private - Public sector : the right of nomination of CEO, - Private sector : dominant position in a board of directors and a general shareholder s meeting. ㅇ Differing view on operation and management of ICD company - Public sector : to increase freights of railroad transportation and dividend of share - Private sector : instead of dividend, to keep a low rates(charges) of operational cost. * Our company transacts business with Private sector 67% of total revenues

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